Time is money. No phrase proves this statement better than when you own a growing business.
As you strive to achieve your business aspirations, juggling responsibilities and managing activities end-to-end sums up a typical work day. You simply cannot afford to compromise on any of the processes at hand, because it might have a profound impact on the growth of your venture. The trick is to focus your productivity on the limited resources you have in a time-efficient manner till you can confidently handover the heavy lifting to experts. Successful businessmen will tell you the same, but in two words: time management.
Here are our favorite tried-and-tested time management tips for small business owners to save you time and make running your business easier.
1. Fix a Schedule and Stick to it
The best way to accomplish a productive day is to show up at work with a clearly defined set of goals and tasks, preferably hand-written. A disorganized schedule leads to ineptness and wasted hours, eventually leading to a loss of focus on business objectives. Account for every hour of the day, from the time needed for meetings and document review to travel and shopping. Create your schedule with three categories- one for the responsibilities that need to be completed that day, another for those activities that require your attention but can be put on hold and a third with minor tasks that you can work on if you have extra time. Know your downtime- you can use this for short breaks.
2. Focus on ONE Task at a Time
Multitasking might seem like a clever way to do many things within a short amount of time, but it divides your attention among the responsibilities at hand. Being a budding enterprise, this is not a risk that you want to take now. Instead, you can try the ‘Pomodoro technique’. This involves setting your timer for a specified time and focusing wholly on one task before the timer goes off. Repeat this after taking short breaks of 5 minutes between tasks. An efficient way to structure your time, this technique ensures that you devote time for a specific activity regularly.
3. Delegate Work
All small businesses are a one-man army early into their business operations. But your growth journey to becoming a larger enterprise begins when you start delegating responsibilities to expert personnel. Hire people who are dependable to manage tasks you don’t have time for or you are not suitably skilled for. This will give you more time to work on things that you are best at and need your personal attention. Keeping in mind that most growing enterprises might not be sufficiently funded to hire the right people, Capital Float offers Unsecured Business Loans to support the recruitment needs of these businesses.
4. Avoid Distractions
Any means of distraction is harmful for the growth of your business, as the work you do is very different compared to those of your employees. If you think your team members are wasting time on social media, set up a URL blocker on your system. You can forward calls, set up caps on answering emails or designate others to perform repeated tasks, if these are causing you to deviate from your daily schedule.
As you get busier, more people demand your time. Reducing distractions implies training the people around you to respect your time. Your employees tend to consume your time with constant problems or through attempts to garner your attention. Take steps to identify the major time-wasters and keep them at bay.
5. Prioritize difficult tasks
An effective time management hack is to start your work hours with the most challenging task at hand. Despite varying individual notions of productivity, mornings are accepted as the time of the day when you are at your optimum performance levels. This leaves the rest of the day to handle repercussions or developments, and you can work on other priorities with a relaxed frame of mind.
6. Watch out for ‘Shiny Objects’
Many a small business that has just entered the economic space face the ‘shiny object syndrome’ early into their growth phase. Shiny objects, or seemingly bright opportunities, keeping popping up from time to time and they tend to distract you from your business objectives. You can eliminate such time-wasters by asking for agendas before attending any business proposition and comparing new prospects with the value of opportunities at hand.
7. Organize your Work Space
There is no bigger demotivating factor than coming to a cluttered workspace every morning. Not only does it create an unorganized mental space, but according to recent surveys, makes you stay at office longer. Documents categorized into inbound and outbound piles, color-coded filing cabinets, scanning forms onto Outlook, and similar techniques will save you the trouble of rifling through scores of paperwork to find information.
8. Evaluate and Improvise Consistently
The worst thing to do to your business is to continue implementing processes that do not benefit your cause. Most small business owners might be busy with specific projects to spend time analyzing their business models. This is where a quarterly evaluation becomes the most significant of time management tips and strategies. A quarter, or three months, is relevantly sufficient amount of time required to determine the effectiveness of a strategy or a business relationship. Carrying out evaluations at the end of every quarter gives ambitious entrepreneurs better process insights and a chance to move in the right direction.
9. Measure Big Successes & Failures
One of the critical time management skills that a small business owner must possess is goal setting. Define scalable weekly business goals with an emphasis on a particular aspect of your business that you want to focus on, and evaluate the big wins and losses at the end of the week. What makes this strategy so productive is that here, failures are treated as important as successes, as early analysis saves the time that your team might have continued working on them.
10. Leverage Technology
Most small business owners spend more time running a business than growing it. Tasks like staff rotas, invoicing, payroll and tax consume more than 30 hours of productive time every month. With the infinite number of apps and services available online, technology can be used to fill the gap in your current business processes. Automating repetitive tasks such as these will help you save a lot of time to focus on activities that directly impact the growth of your business.
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The inability to provide collateral has been a major hindrance for small and medium enterprises (SMEs) seeking loans to fund their working capital needs, finance their expansion or take advantage of growth opportunities. Although the government has been taking steps to provide the necessary financing to SMEs, traditional lending institutions offer generic credit products to SMEs. When these financial institutions offer collateral free business loans, they impose stringent eligibility criteria, have long loan approval processes and the requirement of a guarantor to safeguard themselves against default.
Against this backdrop of skepticism, new-age lenders like Capital Float have emerged, using cutting-edge technology and innovative products to ease the loan approval process and support SMEs to repay loans by tying repayments with their receivables. These FinTech companies, which bring together finance and technology, specialize in business loans in India for the SME segment.
Specialized Products from FinTech Lenders
FinTech lenders aim at fulfilling the credit requirements of Indian SMEs by developing innovative and customized loan products and simplifying the process of loan application.
Realizing that the main problem faced by SMEs in securing loans is their inability to provide collateral, Capital Float offers flexible, collateral-free business loans via its online platform. These loans can be used to purchase inventory, optimize cash flows or fund any other expense. Some of these loans are provided against the borrower’s bills receivables or credit card receivables. All of Capital Float’s credit products come with easy and flexible repayment options.
Choosing the Collateral Free Loan that Best Suits Your Business
For any business loan requirement, one needs to assess the amount needed and submit an online application, along with digital copies of relevant documents. These documents may include income tax returns for a period of three years and bank statements for the last six months. The use of advanced software, with highly powerful algorithms, allows Capital Float to process the loan application and transfer the sanctioned amount to the SME in a matter of 3 days.
Small businesses can explore a variety of loan options and choose the one that best suits their business loan requirements. Here are the things one needs to consider:
If your SME has positive monthly cash flows and needs funds for the short term, you can apply for Capital Float’s Term Finance product. One can borrow an amount ranging between ₹1 lakh to ₹1 crore, with the loan period ranging from six months to three years. Term Finance loans are disbursed within three days.
The growing popularity of online shopping has propelled the growth of ecommerce companies offering a variety of products and services. On the other hand, increasing awareness of customers, shrinking lead times and the need to manage inventory effectively have posed new challenges for SMEs. Here’s where the Online Seller Finance product works best. This innovative credit option is a short-term loan provided to e-commerce sellers who are selling their products on online platforms. These companies may be looking to raise funds for purchasing stock, diversifying their operations or taking initiatives to increase the visibility of their products. Partnerships with online marketplaces, like Amazon, PayTM, Snapdeal, Myntra, Shopclues and eBay allow Capital Float to help merchants access fast and flexible working capital funding. The loan amount is decided on the basis of the monthly sales and projected revenues of the borrower. Flexible repayment options and the availability of credit of up to two times the monthly sales of the business are some of the attractive features of Online Seller Finance.
Another attractive short-term collateral free loan option is the Pay Later Finance, which works like a revolving credit facility. A credit capacity is determined, based on the prospects of the business. The total amount is not transferred in one go. The SME has the flexibility to borrow amounts as and when business loan requirements arise. The loan amounts can be repaid over a 30-60-90 day cycle. The repayment restores the sanctioned limit, making more credit available for future requirements. Interest is charged only on the amount drawn and not on the entire credit capacity.
Businesses that receive payments via credit card transactions or point of sale (POS) machines can opt for a special financial product known as Merchant Cash Advance. Partnerships with multiple POS machine vendors such as Pine Labs, Mswipe, ICICI Merchant Services, MRL Posnet and Bijlipay have enabled Capital Float to offer swift and hassle-free business loans in India to SMEs using POS machines at their establishments. This tailor-made financial product offers loan amounts of up to 200% of the borrower’s monthly card settlement. The tenure ranges from six months to a year, and a business can raise as much as ₹1 crore.
SMEs also have the option of using their accounts receivables to raise business loans at attractive rates. With the Supply Chain Finance product, an SME can liquidate its receivables immediately into cash and use the same to fund the execution of the order or the growth and expansion of the business. A company can borrow funds ranging from as low as ₹1 lakh to as high as ₹1 crore. One also has the option to repay the loan in easy instalments or in one go in case funds become available to the business.
For SMEs seeking collateral free business loans with quick approvals and disbursal of funds, Fintech lenders are a viable option. The priority for such lenders is to not only ease the process of application and disbursement, but also help SMEs repay loans easily and continue to have credit available.
Oct 24, 2018
GST — the unified tax system that is set to revolutionize indirect taxation in India— is finally here. Some of its key proposed advantages are streamlining of tax payments, reduction in tax frauds, and ease of doing business. Here is a look at how these will play out in the manufacturing domain.
Make In India & Manufacturing
The manufacturing sector in India contributes a mere 16% to the overall GDP. However, the potential to make this a high-growth and high-GDP sector is huge. The “Make in India” campaign by Prime Minister Narendra Modi makes this possibility real, by giving impetus to the sector. Furthermore, PwC estimates that India will become the fifth largest manufacturing country in the world by the end of 2020. It would be interesting to know how the Goods and Services Tax or GST impacts this roadmap.
Impact of GST on Manufacturing
GST is one of the key policy changes that will have a direct impact on manufacturing establishments. So far, the existing complex tax structure has been a dampener, resulting in the slow growth of the sector. GST is expected to liberate the sector by unifying tax regimes across states.
Overall, GST is expected to have a positive impact and boost manufacturing. Here is why:
- Removal of multiple valuations will create simplification: The old tax regime subjects manufactured goods to excise duty, which is calculated differently in different states. While some states calculate excise duty based on transaction value, others calculate it based on quantity. Most manufactured goods’ excise duty is currently considered on MRP valuation. This creates great confusion in valuation methods. GST will usher in an era of transaction-based valuation, making calculation of tax much simpler for the manufacturer.
- Entry tax subsummation will reduce cost of production: The subsuming of the entry tax for inter-state transfers is a key reason for reducing cost of goods and services. For example, a supplier of cement from Maharashtra to Karnataka was earlier required to pay entry tax when the supply crossed the interstate border. For Karnataka, the entry tax rate was 5% of the value of the goods. The supplier would pass on this additional cost to the customer, resulting in increase in selling price. With entry tax being subsumed, the supplier need not pay the entry tax rate amount and consequently, not charge the customer this amount either.
- Improved cash flows: Under the new tax laws, manufacturers can claim input tax credit on input goods, which seems to be a positive sign for cash flow. SMEs are keenly observing the time difference between input tax credit and the credit being available.
- Single registration process will provide ease of registration: The old regime required manufacturers to register each manufacturing facility separately, even those in the same state. GST will simplify the plant registration process by allowing single registration for all manufacturing entities within the same state. Previously, if a brick manufacturer had factories in Bangalore, Hubli and Dharwad, each unit had to be registered separately. Under GST, all of these factories would be jointly registered under the state of Karnataka. Of course, different state-entities will require separate registrations under GST too.
- Removal of cascading will lead to lower cost-to-consumer: The old tax regime does not allow manufacturers to claim tax credit on inter-state transaction taxes such as octroi, central sales tax, entry tax etc. This results in cascading of taxes—an extra cost to the manufacturing company. Manufacturers end up passing on these extra costs to the consumer. The unified GST regime will eliminate multiple taxes and thus lower cost of production; this, in turn, will mean lower pricing for the consumer. For example, prior to 1 July 2017, SMEs in manufacturing used to pay Excise Duty, Central State Tax and sometimes VAT too at 12.5%, 2% and 5.5% respectively. With GST in effect, they are required to pay 18% in taxes.
- Restructuring of supply chain: To align with the GST law, businesses will be required to realign their supply chains. However, this is a blessing in disguise. Till date, most supply chain structuring has been designed around how to manage tax regimes. With a single tax regime, this will change, and supply chain structures will focus on driving business efficiencies. An example is that of warehousing. The old regime demands that warehouse management be based on arbitrage between varying VAT rates across states. This is expected to change to bring in economic efficiencies and more customer-centricity going ahead.
Manufacturers, however, are concerned about the following aspects:
- Increase in immediate working capital requirements: Branch transfers and depo transfers will be treated as taxable under GST; IGST will be applicable on these transfers. This increases the requirement for immediate working capital. Another reason for increased working capital requirements is that the receipt of advance is taxable as per GST rules. Also, stock transfers are treated as “supply” and hence are taxable under the GST regime.
- More stringent and elaborate transaction management: GST aims to achieve better tax compliance. To make this possible, manufacturers must work towards streamlining existing transactions; this means additional resources and costs. For example, under GST, credit in respect to an invoice can be taken only up to one year of the invoice date. Also, the provision of reverse charge means that the liability to pay tax falls on the recipient of goods/services instead of the supplier. The payment of reverse charge is dependent on the time of supply (30 days from the date of issue of invoice by the supplier in case of goods and 60 days for services).These changes will require manufacturers to carefully assess and track their supply processes, especially the timelines. This may mean hiring a better skilled compliance workforce, and better systems and software. More legal considerations will also mean more costs.
- Lack of clarity on local exemptions: Despite GST being proposed as a unifying platform for indirect tax, all the components for manufacturing are not yet clear. One such area is localized area-based exemptions. The old structure provides certain exemptions for certain goods in specific states (for example the North East or hilly states). Under GST, most of these exemptions are likely to be removed, resulting in a negative cost-impact on these manufacturers. Such companies must reassess their financial position in view of such likely changes.
Overall, one can say that the impact of GST on the manufacturing sector is positive. It provides a unique opportunity to streamline business operations to become more compliance and profitability-oriented, rather than tax-oriented. It puts power in the hands of business leaders to bring about positive change and steer their enterprises on a growth path, powered by GST-compliance.
Read more of our content on GST by clicking here.
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Oct 24, 2018
The growth of the SME (small and medium enterprises) segment, which contributed nearly 40% of India’s exports, has been restricted by the lack of access to timely finance. Only 4% of 57.7 million small business units in the country have access to formalized finance, leaving many to rely on informal lenders, who charge exorbitant interest rates. Requirements like collateral and detailed documentation as well as the long processing and disbursement time of loans deter SMEs from approaching traditional financial institutions. Thus continues the huge gap between the need for funds by SMEs and the amount of funds actually approved as loans.
This severe shortfall needed to be addressed, especially given the importance of SMEs to India’s economy. This is where FinTech companies like Capital Float have risen to the occasion, offering new business loans that are aligned to address specific needs of the SME sector. While cutting-edge technology is being deployed to make innovative financial products available to smaller businesses, SMEs must be aware of the available finance options to take make an informed decision.
SMEs make some common mistakes when applying for secured and unsecured loans. As a result of these mistakes, their loan applications may get rejected. Here are some tips for small businesses to avoid rejection of their business loan applications.
Banks and other lending institutions would require certain documents to verify the claims made by a business. The decision to sanction a loan is taken by the lender after evaluating the prospects of a business, its ability to repay the loan amount and its previous credit record. This is done by checking various documents certifying the presence and existence of a business, its financial statements, taxes paid by it and other documents that indicate the financial standing of the business and the business owner(s). To ensure speedy approval of its loan application, a business must organize its documents and submit these in an orderly manner to the lending firm.
Any kind of delay in submitting the desired documents may be viewed negatively by the lender and could even derail the whole process. So, every business seeking a short term loan needs to be organized about its documentation. All the papers should be ready for submission when applying online for a loan. Your swiftness in providing the necessary information along with requisite documents can speed up the approval process.
Be Mindful of Your Credit Profile
The credit profile of the business owner or owners plays a key role in the ability of the SME to secure a business loan. Ensuring a good credit profile is not difficult. This is possible by ensuring that all your credit card and bill payments are made on time. The timely repayment of all due amounts including the ones relating to any existing loans helps improve the credit score.
Often business owners ignore their credit score thinking that it would not impact their ability to secure a loan for their business. They fail to understand the significant negative impact this can have on their business. It is important for business owners to regularly check their credit scores and take the necessary steps to improve them. Such efforts can ease the process of securing finance for the business in the future. In some cases, the credit scores do not even reflect the true situation. Regular monitoring can help business owners rectify the errors in the scores and boost their chances of getting loans on time.
Have A Firm Business Plan
Seeking loans without any kind of business plan may result in the loan application being rejected. A business plan is a reflection of the goals, the purpose of a business and ways to achieve them. It shows how a business intends to operate and how much funds are needed and at what time. A clear business plan not only helps a small business to ease the process of loan application, but also to determine the specific amount of funds required. This in turn enables the business to apply for a business loan well in advance besides providing the lender clarity into the purpose for which the loan is sought.
Thus, a well laid out business plan helps a business provide answers to questions like:
- How much loan is required and for what purpose?
- How quickly are the funds required and for what duration?
- What is the current financial standing of the business and when will the business be able to repay the borrowed amount?
- Does the business need secured or unsecured loans?
With FinTech lenders like Capital Float offering an array of innovative products, small businesses also need clarity to enable them to choose the loan that is most appropriate for them. A business plan would also help with this. In the absence of a business plan, the screening process may take longer and the chances of rejection of the loan application are also higher.
A business seeking a loan should not borrow from the first lender it comes across. Instead, it’s advisable to do thorough research and compare the loan terms offered.
Capital Float helps small businesses seeking loans to identify the right type of loan for their working capital needs, besides offering multiple repayment options. The use of advanced algorithms helps to underwrite businesses uniquely, check the repayment ability in absence of credit scores and develop customized lending solutions to suit the individual requirements of potential borrowers.
Oct 24, 2018