As any business starts to grow, it is important to measure aspects of the business to ensure growth and profitability. One tool you can use to do this is calculating the gross profit margin and this should be done regularly. Gross profit margin is also referred to as gross profit or gross margin which measures your revenue against your cost of goods sold.
When you are starting your business or changing its structure, a common question to ask yourself is if you want to be an S corporation or C corporation. This is a very important step to take in your business because it implies how much you will pay for taxes, your ability to raise money, and how easy it will be to expand your business. We will review the differences between S corp and C corp structures to help you make the best decision for your business.
You are probably familiar with a FICO score and how important it is to stay on top of your credit. You may not be as familiar with a PAYDEX score or what it means for your business. A PAYDEX score can affect your chances of getting the best rates from your creditors. The score rates the likelihood that a business will make payments to suppliers/vendors in a timely manner. We will dive deeper into what a PAYDEX score is and how they affect the credit of your company.
Whether or not you plan to sell your business, you still need to know its value. Knowing the worth of your business and calculating the value is easy. Today we will cover the basics of small business valuation, the methods and how to use them to find out how much your business is worth.
If you have looked at your business credit report, you may have seen something called a UCC filing statement and it might be affecting your business credit score. It is important for business owners to understand what they are because if you do not, it can lead to issues down the road when you are trying to secure approval for credit.
One of the most important factors in having a successful business in any industry is having great customer experience and service. It has been on the rise for many years and continues to rise especially right now that we are living in uncertain times. Everything a business does including advertising, research, marketing, and more, all play a role in shaping the customer experience. The most important investment a company can make is focusing on customer experience management (CXM) to remain competitive in their industry. Read on to find out why customer experience is important for your business and strategies to improve it.
When you apply for a loan, lenders want to make sure your small business can repay it. One way lenders determine this is by calculating our debt service coverage ratio (DSCR). This is also referred to as the debt service ratio or debt coverage ratio. Your debt service coverage ratio is calculated by dividing your business’s net operating income by your annual debt payments. We will talk you through how to calculate it for your small business and how the ratio affects your ability to qualify for a loan.
North American Industry Classification System (NAICS) codes are six-digit codes used by the federal government to classify businesses into an industry operating in the United States, Mexico, and Canada. The main purpose of an NAICS is to collect, analyze, and publish statistical data related to the business economy. Banks, insurance companies, banks, and other financial institutions review NAICS codes to assess risk which can affect the financing terms for small businesses. There are 20 sectors and over 1,000 industries in the United Sates NAICS system.
A leverage ratio indicates the level of debt incurred by a business entity against other accounts in its balance sheet, income statement, or cash flow statement. This ratio helps provide an indication on how the company’s assets and operations are financed. We will dive in this concept in detail and look at the different leverage ratio formulas available.
If you are ready to lease a commercial space for your business, there are a few steps you must take to find the right property and get the most benefits out of it. Perhaps you a startup or in the early stages of your business so you are uncertain about the future of your business, so you are considering a short-term office lease. Read on to find out both the advantages and disadvantages of having a short-term office lease.