Daily Archives: January 26, 2010

Ten Tips for Business Planning and Budgeting

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It is really important when you are running a small business to know your company’s mission. Take a good look and examine your motives, and make sure that you have a passion for owning your business.

You will need to be willing to commit to long hours, discipline, and be ready for continuous learning.

It is a good idea to conduct a competitive analysis of others in your market, including their products, website, advertising and promotions, advertising, and services. Always be on the watch for the outside influences that could affect your business.Think of a budget as a useful tool – a written financial plan that helps you set goals and measure progress.

When it comes to budgeting, determine your monthly and quarterly sales revenues targets. Then based on past experience, estimate your cost of goods sold (e.g., 70 percent of sales.) Subtract that from the sales revenue, and you will be able to determine the estimated gross margin.

Take a look at the variable expenses such as commissions and travel, or vendor related monthly services, versus the fixed expenses. Those could include your taxes, supplies that are the same, utilities, etc. Subtract these expenses from your gross margin to arrive at your estimated net income. This would be the number before paying your federal taxes.

It is easier to look at your annual budget quarterly to monitor progress. A monthly budget can be a very useful tool to set goals to meet and track your financial plans. Put strategies in place like accounts receivable factoring, which can help your busienss stay on track. Don’t forget to measure your progress.

For more information on factoring companies like IFG, go to www.ifgnetwork.com

2010 Construction Outlook Includes Construction Factoring

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The 2010 Construction Outlook forecasts an increase in overall U.S. construction stated due to improvement for housing from extremely low levels and broader expansion for public works, the level of construction starts in 2010 is expected to climb 11 percent to $466.2 billion. Source: McGraw-Hill Construction

U.S. construction will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39 percent from its mid-decade peak

Stimulus act benefits should broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types.

After reaching bottom earlier this year, the overall level of construction activity projected for single family housing should see moderate improvenmenet in expansion in 2010.

Highlights of the 2010 Construction Outlook:

� single family housing to advance 32 percent in dollars.
㩒 percent increase in the number of units to 560,000
• Multifamily housing to improve 16 percent in dollars and 14 percent in units
• Commercial buildings will drop 4 percent in dollars, following a steep 43 percent drop in 2009.
• Weak employment will further depress occupancies, and this makes it difficult to justify new construction.
• Institutional buildings should begin to stabilize after losing momentum in 2009.
• Square footage will retreat another 2% after sliding 23 percent in 2010. The dollar amount of construction for this sector will increase 1 percent,
• Growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings.
• Manufacturing buildings will drop 14 percent in dollars and 3 percent in square feet.
• Public works construction is expected to rise 14 percent, given more wide-ranging strength across all project types.
• Electric utility construction will slip 3 percent, continuing to settle back after a record high in 2008.

Construction factoring can assist growing The construction industry is dependent upon economic business cycles, therefore even changes in interest rates and tax laws affect individual and business decisions related to construction. Changes in state or local regulations or budgets can result in new construction or a cancelled job.

There has been an increase in factoring among contractors during the last year, and it is helping to provide the cash flow needed to pay suppliers, meet payroll and pay for insurance, as well as workmans compensation. Construction factoring enables businesses to obtain funds based on their current accounts receivables, so they can go ahead with the next phase of a project, rather than wait till the invoices are paid.

Construction is one of several industry sectors that can benefit from construction factoring. Why? Because when factoring is used, the sub-contractor, or construction company, does not have to wait for payment before starting on the next phase of a project, or begin construction on a new project. With invoice factoring, the sub-contractor or construction firm can realize quick turnaround, from 24 to 48 hours, on accounts receivable due for completed stages of a construction project. With construction invoice factoring, the construction company, or the sub-contractor, can be paid overnight for accounts receivable invoices, which speeds up cash flow and improves the company’s ability to start immediately on the next phase of construction for each project.