University of La Verne SBDC Small Biz Blog

by Joshua Botello Introduction Many of our small business clients who are looking to get into business, lack the fundamentals in accounting to know how to judge the health of their business. In this first episode of a new series, I will show you the basics of accounting including financial sheets and how to use them. In this video, we are covering our first financial statement, the Balance Sheet. I’ll show what a balance sheet is, the components, and stay to the end on how you can use it for your business.  What is a Balance Sheet  So let's get right to it. What is a balance sheet? A balance sheet is a financial statement that is a snapshot of your business's health. The balance sheet shows your business’s net worth and it is broken down into 3 sections: Assets, Liabilities, and Equity. These 3 sections will always be in balance when looking at this document. This formula is often associated with the balance sheet: Assets - Liabilities = Equity  Typically, you will see balance

By Joshua Botello Getting a small business loan is an integral part of many small businesses to start up or grow. The most common SBA loans offered for small businesses are 7a and 504 loans. The terms of loans may seem confusing and small business owners may not understand which one they need or qualify for. In this article, we will break down the major differences between the two loan programs and which might be right for your small business. Difference #1: Eligible Business size Each type of SBA loan has business size requirements that may impact your eligibility. Eligibility for 7a loans is determined mainly by industry. For example retail, service or agriculture businesses' sales must not exceed the range of $750,000 - $33.5 million. For 504 loans a business’ net worth cannot exceed $15 million. Meanwhile, the average net profit (after taxes) over 2 consecutive years cannot exceed $5 million. Difference #2: Program Requirements The program requirements for a 7a and 504 loans

By Joshua Botello Starting a business is difficult when it comes to finding the money to launch. Not every business owner has savings or credit for a business loan. There are many options for small business owners to get their business off the ground and they don’t always involve getting a business loan. You discover 5 ways to fund your business start-up from bootstrapping to crowdfunding find out which is right for you. So let’s get started. Bootstrapping Bootstrapping a business comes the phrase “pulling up by one’s bootstraps”. Essentially, this means you are going to fund your business yourself. This may mean you have a full-time job and your new business becomes a “side hustle” that you grow. How it works For many business owners with simple ideas or who don’t want or can’t go to a bank to fund their business, this is their option. If you are starting a consulting business or even a small eCommerce business this may be the easiest way, to begin with, the least amount of initial i

Many Small businesses struggle with their finances whether they are first starting out or if they have been in business a while. Having a firm understanding of your business finances is the key to a successful business, how do you keep track of that? Professor Rick Hasse is a professor in finance and accounting here at the University of La Verne, College of Business and Public Management. In this interview, you'll find out how finances affect your business and how to perform a financial check-up.  How important are finances to the health of the business? Well, I think it could be a very simple answer or it could be very complicated. I'll give you a simple answer. Naturally, finance is the blood of a company. You can have the best idea, the best product, the best service, but if you don't have the necessary capital to get that off the ground and get it to your customers, you ain’t got nothing. So having capital, having access and understanding of capital is key. I like to th

by Joshua Botello Many small business owners often find themselves short on cash at the most inopportune times. These businesses might have trouble with small business loans when they need them but it may be too late. A business line of credit is capital that small businesses secure when they can and use when they need to avoid cash flow issues. In this video, you’ll discover how a line of credit works and see if it's right for you; how to apply and secure a line of credit for your business; and stay until the end for some valuable tips to increase your chances of getting your own line of credit for your business.  What is a Line of Credit? A line of credit is a short-term, revolving credit (open-ended) account you borrow up to a set amount from $10,000 to $1,000,000, depending on the type of the account and institution. Similar to credit cards, the LOC can be accessed to pay for equipment, repaid, and accessed again as long as the credit limit isn’t reached. Depending on the inst

by Joshua Botello If you are starting a business and need some start up funding for you may feel limited in what is available for getting your business off the ground.  Traditionally a prospective business owner would create a business plan like we do here at the SBDC and that client would take it to a bank, angel investor or VC to get their venture funded. Unfortunately, because this method narrows your chances to a few major players, the likelihood of getting the capital you need diminishes when pitching to those few people.  Enter Crowdfunding.   What is Crowdfunding? What exactly is Crowdfunding? Crowdfunding is a way to raise the capital for your business or project through the collective efforts of family, friends and investors. The hallmark of crowdfunding is using small amounts from "the crowd" to invest enough collectively to fund the business. This is usually done through efforts in campaigns coordinated on social media and video media.  Don’t worry we’ll get to tha

by Joshua Botello Every business owner should build their business credit. Why? It gives the businesses access to loans and other capital instruments to keep their businesses financially afloat. Many new business owners have no idea how to build credit with their business and oftentimes business owners have personal credit issues themselves. While business credit is different from personal credit, many principles will be the same in building your business credit. In this article, you’ll discover the 5 simple and practical steps to building your business credit. Separate From Your Business I f you are just starting out, you want to make sure you are set up for success to build your business credit. How you do this is by separating you as an individual from the business. Why? You don’t want your business tied to your personal credit and how successful the business is should be based on the money the business makes, not your choices personally. You can easily set up a LLC or set up a corp