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Starting a Small Business after College Graduation

Starting a Small Business after College Graduation

Imagine this scenario: You’ve just graduated from college. You are given two options: (a) work at a well-known company, or (b) start your own business. Which would you choose?

Many new college graduates would most probably play it safe and choose option (a). Increasing numbers, though, would rather take the risk and go the entrepreneurial route to start up their own businesses.

Donna Fenn, author of Upstarts, a book about the Generation Y start-up phenomenon, says graduates are “starting businesses in droves.” This is due to a number of reasons, among which are the inspiring success stories of Internet entrepreneurs like Steve Jobs and Bill Gates; the founders of Facebook Inc.; and the founders of the photo-sharing app Instagram.

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Aside from these, graduates are also aware of regular downsizing and layoffs, meaning lack of job security at large companies.

Starting your small business

Nowadays, with advancements in technology, especially the Internet, it really doesn’t take much to start your own company. Most entrepreneur-wannabes just need a few laptop computers, a reliable Internet connection, and start-up capital.

Speaking of start-up capital, it is getting relatively easier for aspiring small business owners to get investors. CB Insights, a New York firm that monitors start-up funding, reports that investors made 1,749 seed investments, generally worth no more than $1.5 million each, in early-stage companies in 2012.

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Aside from investors, graduates can also get the capital they need by applying for a business loan. However, this may prove to be challenging if one has a poor credit score.

Fortunately, there are some things you can do to manage a bad credit rating.

First, determine the “damage” that needs to be “repaired” – check your credit score and think about what you can do to turn it around, if indeed it is in the bad credit range.

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More often than not, a person obtains a poor credit score when he or she does not manage his or her credit properly. Sometimes, though, this may not be the only reason. If you are a victim of credit scams, this can lead to bad credit as well. This is why it is important to perform regular credit checks, and to protect one’s identity as much as possible.

Managing your business credit

Once you have your small business set up, make sure that you manage your business credit as you would your personal credit. Here are a few tips:

  • Find out if you already have a business credit file.
    If you are a small business owner, determine whether or not you have a business credit file with D&B, which is the world’s leading source of commercial information and insight on businesses. If you discover that you already have a business credit file, go over it thoroughly so that you know what information it contains. If needed, make changes so that people looking at your business credit (e.g. financial institutions and suppliers) have the correct information.
  • Establish your business credit history.
    Small business owners usually use their personal credit and financial resources when they’re just starting out. However, they must establish a separate credit history for their business. This can be done by placing expenses, like a business phone line, under their business name, or opening a commercial bank account and using it to pay business-related bills.
  • Always pay your bills on time, and in the full amount as much as possible.
    One of the easiest ways to manage business credit scores well and build a good payment history is to pay your bills on time. As much as possible, pay every bill in the exact amount on or before its due date. Also, be sure to use your lines of credit carefully.
  • Keep your business credit file updated through regular monitoring.
    Monitor your business credit so that you may know if there are any changes in your credit ratings, as these may affect your relationships with customers, financial institutions and suppliers. Always make sure that your credit file is updated and accurate, and shows any changes like location, number of employees and revenue. These all have an effect on your credit rating.
  • Monitor your customers’ and merchants’ credit.
    Performing credit checks will give you an idea of the credit standing of your customers. This will in turn help you decide how much credit, and on what terms, you should extend to them.

Advantages of business credit management

Small business owners will find that managing their business credit proactively can help guarantee positive cash flow, which is, of course, something every business owner desires.

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This is because they can:

  • Obtain more financing at better terms.
    Small businesses that have good credit will be able to get financing when they need it. Conversely, businesses with poor credit ratings may be charged higher credit card and loan interest rates.
  • Get the supplies they need at the best possible terms.
    Suppliers usually evaluate the credit of small businesses before deciding on how much credit to extend to them. Having good business credit means you can get the supplies you need at the terms you can afford, which means you free up more money for other business needs.
  • Make wiser credit decisions on their customers.
    If business owners know the credit of customers, they can give better terms to credit-worthy customers. They can also avoid dealing with customers who don’t pay on time. Both of these can help improve cash flow.
  • Protect themselves against business identity theft.
    Business owners who actively manage their business credit file help ensure that false or fraudulent information is not in the file. They will always be aware of any inaccuracies and missing data so that they can address these immediately.

Starting a small business, especially if one is still a fresh graduate, may seem challenging. But once you are armed with all the knowledge, tools and resources you need, the journey will not seem so tough anymore. So go ahead and launch that business, and reach for your dreams.

Do you have any useful tips to share with new graduates on how to set up a business? Please feel free to share them in the comments section below. If you find this post useful or know others that could use some tips, go ahead and share it with your friends.

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Published on November 5, 2020

8 Best Finance Apps For Effective Budget Tracking And Planning

8 Best Finance Apps For Effective Budget Tracking And Planning

Looking for ways to effectively track, plan, and manage your budgeting? Well, there is a multitude of apps for that! Finance apps are the best options around for tracking and planning your budget and keeping you accountable. After all, using a pen and paper can make it cumbersome to track.

The apps that we’ve listed below do a ton of the heavy lifting for you and provide a wide array of functions to help you with your financial needs.

How to Pick a Suitable Finance App

When looking at some of the best finance apps that are ideal for budgeting, we found these particular features to be important. Keep these in mind when looking for ideal finance apps.

  • User interface – Navigation is key in any circumstances of an app. This is especially true for helpful apps like finance apps. You want to be using them regularly. As such, the interface should be simple to navigate.
  • Habit building – Finance tracking is all about building money habits, and apps have unique ways of building those habits. There is the app itself but features like push notifications are also essential in some circumstances.
  • Syncing – You should be able to connect your bank account to these finance apps, and that process should also be pretty easy to do, too.
  • Usefulness – The number of features that the app has should be relevant and make it something you want to check. Sure, some of these finance apps work in the background, but those on this list help significantly when you check them regularly.
  • Data presentation – The number of reports and analytical data is a core focus for these finance apps as well since it allows you to make sound financial decisions.

1. Best Finance App Overall – Mint

    If you’re looking for an overall quality finance app, Mint is the first that comes to mind. It’s one of the most well-known personal finance apps around and for good reason. It provides you with a complete financial picture all in one place.

    By connecting your debit and credit cards to your account, Mint will provide you with a list of transactions and break them into categories, showing you exactly where you are spending your money. You can also track billing and create a budget on the app to help you stay on track of your savings goals.

    A new feature that Mint rolled out recently is the ability to see your credit score. Through this feature, you can also see the factors that are contributing to your credit score. Beyond that, you can also track investments and schedule routine utility payments.

    Download Mint here.

    2. Best Finance App for Debt Management – YNAB

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      You Need A Budget (YNAB) is an app that is built on four rules:

      1. Give every dollar a job.
      2. Embrace true expenses.
      3. Roll with the punches.
      4. Age your money.

      Based on these four rules, the app will help you build a better budget while also allowing you to gain control of your spending. You can import transactions from your checking account and apply them to each budget category to get an accurate look at your spending.

      This app also provides detailed reports to show you your spending habits while you are striving to keep a balanced budget in the various categories. YNAB will also point out other spots that you can improve your spending.

      According to YNAB, the average user will save about $600 in the first two months and can save over $6,000 in the first year. It sounds promising for a debt management app.

      Download You Need A Budget here.

      3. Best Wealth Management App – Personal Capital

        Another solid choice is Personal Capital. It focuses on wealth management but also serves as another personal finance app. Through this app, you can manage assets and investments along with setting up a budget for everyday spending accounts.

        This service integrates with over 14,000 financial institutions, allowing you to link your bank account(s) directly to the app and through it. By linking your bank account to the app, you can track your spending, too.

        That said, the app really shines when you connect it to your investing accounts. By doing so, you have a convenient spot to track your portfolio by account, asset class, or individual security. The app can also show you opportunities to diversify, manage risk, and find any hidden fees that you could be paying.

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        You can also compare your own portfolio to the major market benchmarks to help you keep track of whether you’re on track to reaching your goals. You can also get financial advice from this app as the financial advisors here are registered and can provide you with advice tailored to your goals.

        Download Personal Capital here.

        4. Manage Your Subscriptions – Clarity Money

          One of the popular business models that companies are moving to these days is subscription-based. While this model does have its merits, one of the many problems that we face with this model as consumers is that we find ourselves subscribed to things we don’t need. Paying for a streaming service is nice, but many people often are subscribed to multiple streaming services.

          Because it’s so difficult to remember and even track all the subscriptions we’re paying for, this particular app can provide us with clarity. Clarity Money is all about bringing to light what you are paying for and providing you with a convenient way to cancel and throw away unused subscriptions you’re not using.

          Beyond removing unnecessary subscriptions, the app also looks at your spending behavior and offers suggestions for ways to improve your financial health. You can even make deposits to your savings account through this app.

          Download Clarity Money here.

          5. Best Bill Paying App – Prism

            If you’re looking for a convenient app that shows all of your bills and financial apps, this is the app for you. Prism takes pride in having 11,000 billers on this app. This is the highest amount of billers on bill-paying apps you can find. From billers like large banks to even small utility companies, chances are high that the company you’re paying for accepts this app.

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            In terms of actual function, you can add your bills to the app and the app will then automatically track it. It’ll send you date reminders to pay the bill as well so you won’t get hit with late payments. On top of that, you can schedule payments to be made the same day or several days in advance as well. Prism is a nice app that allows you to pay bills in one sitting without having to log in to several accounts.

            Download Prism here.

            6. Best Shared Expenses Management App – Spendee

              Many of these apps are focused on providing services to a single user. This is natural considering most of these apps are asking for your banking information. However, this is one of the few apps on here that allows multiple people to use it.

              With Spendee, the idea is to create shared wallets with your friends and family that you can then use to manage shared expenses for a household budget. You will need to get bank transactions for this to work, but that is fine. After that, the app will categorize all of the transactions and tally how you’re spending money every month.

              You’ll be able to add cash expenses manually as well for accuracy. Beyond those features, you’ve got bill tracker functionality to ensure you pay your bills and avoid late payments. There is also a budget component that will allow you to save and ensure you don’t overspend.

              Download Spendee here.

              7. Best Visuals on Finance App – Mobills

                Mobills is another bill management app that offers a great presentation of information. The app focuses on bill management and offers typical features you can find in these apps. These include categorizing your bills, paying them through the app, and setting up budgets to ensure you stick to them.

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                That being said, Mobills delivers these features remarkably. It presents you with charts that are completely interactive and can help you analyze your financial life. Also, moving bills to various categories is easy and smooth to do.

                Download Mobills here.

                8. Best Finance App for Budgeting Overall – EveryDollar

                  Dave Ramsey is a personal finance expert who urged people to follow a zero-based budget method. This method is the idea that every dollar serves a purpose in your budget. It’s this concept that has inspired the name of this app: EveryDollar.

                  With that in mind, the app provides a monthly expense tracker that you can connect your bank account to. This will take note of important transactions to ensure your spending is in check. You can even split expenses between multiple budget items. The tracker also provides you with an overview of how much money you’ve spent this month and what you’ve got left.

                  Staying true to the name, EveryDollar also has a money management aspect that will help you set up a money management plan. You’ve got access to money management experts who will guide you through financial planning.

                  Download EveryDollar here.

                  Final Thoughts

                  Many financial apps are available to help you achieve your financial goals. Each app has its own perks and benefits to consider. The nice thing about many of the apps on this list is that they have free trials that allow you to get a good feel of them before fully getting them.

                  More Finance Apps

                  Featured photo credit: Austin Distel via unsplash.com

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