You often hear of businesses having cash-flow problems. Put simply, when the cash going out exceeds the cash coming in, the money runs out!When you’re starting a new business, it’s unlikely you’ll have an income or positive cash flow for a while until the business starts to get established.During this time, however, you are still going to have expenses: normal living expenses plus expenses to run the business, the car, service loans, pay for advertising, etc.This is when you need to have enough funds put aside to carry you through until your income exceeds expenses. Obviously, you need to keep expenses to a minimum during this period; otherwise you could run out of money very quickly.Your Business Plan should include a schedule or timeframe of when you expect your business to become profitable. You should expect to start making at least some small amounts of income soon after commencing your business.You should also create a Cash Flow Forecast that shows the income you expect and when you expect to receive it, plus the expenses you expect to pay and when you need to pay them. This is not only useful for your business planning, it will also be required if you apply for a business loan.To create a simple Cash Flow Forecast, record the following information on a computer spreadsheet, or a calendar or diary:
the amount of money you have on the day the business starts
the income you expect to receive, and the dates on which you expect to receive it
the expenses you expect to pay, and the dates on which payments are due
your running account balance, calculated after each entry
This will give you an idea of how long you can keep paying your expenses until you start making a profit (or run out of money). It can also serve as a reality check for you regarding the viability of your business idea!Many new start-up owners are so confident that their business is going to be successful, they commit to spending unnecessarily large amounts on offices, office equipment, and other overheads.If you don’t have a large cash reserve, you NEED to think of creative ways to market, manage, and grow your business.For example, you can take advantage of “virtual” office services to receive all of the benefits of the service while paying a fraction of the price. No need to budget for a full-time receptionist when you can hire a virtual one starting from just $29 a month. And no need to pay for a fax machine, line rental, toner and paper when virtual fax services start at just $12 a month. Using virtual services allows you to present a professional appearance to customers, while saving money (and often time) that is better spent on your core business.By taking advantage of the latest technology and business services that are available these days, it is relatively easy to start your business part-time while working your normal job. Many successful businesses have started this way.Once your new business develops a regular clientele and income, you’ll soon have the confidence and cash flow to give up your regular job and work at your business full time.
Life insurance is something that many of us tend to postpone. After all it is for an eventuality that is not likely to happen today or the next day. This procrastination is what gets many people and their families into trouble. Get a life insurance quote without delay.The importance of life insurance:In the event of your untimely demise, your family still has to pay the bills, educate the kids and pay back all the liabilities ranging from short term credit card loans to mortgages. Getting Insurance quotes is the first step in ensuring your family’s financial security.Even when people get life insurance, many of them don’t buy adequate cover or the right type of insurance products for their needs. Getting the right policy requires some study of the available products in the market and then picking the right policies to meet your financial security goals. Getting a life insurance quote is the best way to start the analysis.This gives you an idea about the types of products available to you and what they mean in terms of premium payments and benefits.An overview of the options available:There are two major categories of policies, the term insurance and whole life insurance. While term insurance has just an insurance component in most cases, whole life insurance has both insurance and savings components.There are different types of term insurance policies. Each gives you an insurance cover for a certain number of years. Depending upon the policy, some of them give you the option to exit or renew the policy at fixed intervals.These intervals could range from one to a number of years. Depending upon the type of risk cover they offer, the premium of these policies could increase or decrease as the years go by. Once the policy expires, all the benefits under these policies cease.Whole life coverage on the other hand covers you for the rest of your life. These policies tend to be expensive when compared to term insurance due to two reasons. One, they involve higher risks and the risk increases with your age.The second factor is the savings component, or cash value that they include. This cash value accrues throughout the policy period and is paid upon your death to your family.The type of policy or policies that you should opt for depends upon your circumstances and goals. If you are confident that you will be able to pay all your debts and accumulate enough savings to support your family even after retirement, then term insurance may be enough.If on the other hand you have dependents needing financial support throughout their lives, like children with special needs or suffering from disabilities, whole life plans could be the best for you. Most people usually have a mix of different types of insurance policies which gives them the optimal cover with minimal premium outflows.Determining your life insurance requirements:How much insurance cover is good enough? Again, the answer to this question depends upon your current expenditure, liabilities and anticipated future expenses and liabilities. Your life style and the kind of life that you would like to guarantee to your family also plays an important role. Here are the important factors to consider:1. Your current monthly income and expenses and anticipated increases in the future. Your coverage should be able to generate funds that can be invested in safe assets to generate similar income levels.2. The period that your family will need financial support. This could depend upon other earning members in the family and the likely earning members of the future.3. Take into account your current liabilities like mortgages. Your family should be in a position to pay up the loans in case of your death.4. Your anticipated future liabilities like the education expenses of your children.Getting the optimal insurance cover:The type of insurance and the options that are available to you depend on many factors. These include your age and the amount of premiums that you can afford to pay. Several other factors could also limit your choices to some extent.The best way to arrive at the optimal mix of life insurance policies is to get a life insurance quote. Online life insurance quotes are the best because they allow you to input certain parameters and pull out the available policies for you from many different providers.This helps you weigh your options and narrow your choices.Whatever the method you use, don’t procrastinate. Start now by requesting a life insurance quote. Keep in mind two important things before you decide to buy any policy.One is the reliability of the insurance company. Check out their ratings and customer service history. The second important thing is to read the terms and conditions very carefully. Life insurance is after all a long term commitment with critical implications. You certainly don’t want to go with the wrong company or pick up the wrong policy.
People have varying reactions to the word insurance. Some are allergic to the word simply because it is associated with extra costs. Monthly insurance premiums reduce the monthly family budget. On the other hand, some see it as having a sturdy golf umbrella when it rains, giving the insured some protection against huge unexpected expenses brought about by unexpected events. As there are different types of insurances, some of the important things to consider are income, the nature of job and lifestyle. It is also important to know what they are so that one may be able to arrive at a well-informed decision before finally saying yes or no.Let us start with Health Insurance and Life Insurance, as they are usually the first that come to mind. Employers usually provide Health Insurance. If it is not available at work, you can also choose to buy one for yourself since it is one the most useful amongst the several types of insurance.Health insurance coverage will let you go see your doctor even when you do not have cash. It will also partially or fully cover any other medical expenses from treatments. Life Insurance gives lump sum amounts to the insured or the beneficiaries in cases of terminal sickness or death. It is therefore wiser to buy life insurance for whoever earns most in the family rather than the children.Homeowners Insurance, also called home insurance or hazard insurance, is insurance for the home of the insured. The most basic type will cover the property against damages caused by natural disasters; but if one chooses, the contents of the home may also be insured for a corresponding increase in the premium. Just like the other forms of insurance, the policy holder may choose to make annual, semi annual or monthly insurance payments. There is also an option for liability insurances to cover for accidents that may occur in the home.Unlike the other types of insurance, which are usually purchased only when one has extra money coming in, Auto Insurance, for most states, is a requirement. There are states that will not release license plates unless the owner has purchased the minimum insurance as required by the state law. Auto insurance will protect the car owner from damage on his vehicle and also ensures that any damage done on the property of another person which is deemed to be the responsibility of the insured, is covered.There are also other not so popular types of insurance. Appliance Protection, Crop Insurance, Mortgage Insurance and Professional Liability Insurance or Professional Indemnity Insurance are just a few. No matter what type of insurance you have, the important thing to remember is to keep monthly insurance payments up to date. Otherwise, previous payments will be forfeited and any claim will be declined.
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