The amount of profit you make is due to either your success or failure and ultimately fuels the growth of your business, generates a financial support for the owners and provides for the well being of the staff.

To increase your profits you need to determine factors contributing to your gross profit and your overheads. Gross profit requires you to either expand your sales income while controlling your direct costs, or reduce direct costs to increase gross profit.

WH Smith the high street retailer has pleased the financial markets by delivering lower revenue but with a higher margin %. As they say ‘revenue is for vanity, profit is for sanity, and cash is reality’.

To do this you need to ensure the following:

• You know and understand your market/s and your competitors
• You have full product and/or service knowledge and you are technically capable in managing all aspects of the business
• Your service and/or products are of the highest quality, delivered on time and run in accordance with any legislation or other specifications.
• You apply marketing campaigns that are cost-effective but increase your sales. These include in-house promotions, leaflets, press releases and adverts.

Your business overheads also need to be kept under control and requires you to monitor, review and strategise for the following:

• Business Expenses – keep to an absolute minimum, and ensure that any additional overheads you assume result in increased profitability and/or efficiency.
• Increase Overheads – ensure that you have reviewed the market and established where the best place is to purchase your stock. Reliability and costs need to be justified.
• Assets acquired on finance – Review and check your finance options to see if you can getter a better deal elsewhere or reduce your general loan costs
• Reviews – Many businesses could benefit from a regular review of their telephone and insurance costs. Even bank charges can often be reduced through negotiation or review.
• Credit – Regularly monitor your credit account customers to avoid bad debts occurring and find the best credit card deal relating to your business.

Roger T Brown
Consultant
http://www.nuOrder.co.uk

We are still living in tough times financially throughout the UK with the emphasis falling on the small business. Finance can be hard to come by for the small business owner.

Often a small business must undertake a large capital equipment investment in order to grow. The balance sheet of the business is often not strong enough to justify a Hire Purchase or Finance Lease facility.

Without capital investment the business can not grow and become more profitable. A chicken and egg scenario.

Small Business Finance is an area in which XL Business Finance has a great deal of expertise. As an independent finance broker we understand the problems of small business finance, arranging equipment leasing and machinery finance for example.

At XL Business Finance we can provide small business finance for investments from as little as £1000. This could be useful for providing tax efficient leasing for office furniture, computer equipment and telephone systems for instance.

Do not think of us as a company who provides you with a one off service to get you up and running then disappears into the night. We work along side many clients for many years providing finance solutions such as factoring, debt factoring or factoring invoice discounting facility.

As an independent factoring broker XL Business Finance can provide you with the best Business finance to meet your specific requirements.

From time to time XL Business Finance has assets and vehicles for immediate disposal. Coming soon is a lovely 1998 Range 2.5 deisel HSE Auto. This vehicle which will be available in the next week or so has a part sevice history, is an excelllent runner and has a cool 195,000 miles on the clock. Therefore it is just been run in. Seriously though it aint bad and is relatively clean apart from a cracked rear bumber. Tyres look pretty new. If anyone is interested please feel free to give us a shout so a viwing can be arranged. PS Hope everyone had a great Easter

A business manufacturing prepaid telephone cards recently approached XL Business Finance needing funding for 3 single debtors all of which were based on the continent. Having been declined finance from their own high street bank they were delighted to find that a factoring and export finance facility was available via a specialist factoring company.

Although the provider was a substantial financial institution and one of Europe’s biggest banks this particular factoring company were not interested in taking on the clearing banking or doing the commercial mortgage. Therefore the business was able to carry on using their existing finance company for clearing which kept the overall banking relationship on an even keel.

Middle Eastern investors have reportedly purchased XL Business Finance for £300m! Due to the dwindling oil resources in the middle east a consortium of investors feel the future is with asset based lending in the UK and have teamed up with XL Business Finance as their chosen funding partner. A signing on fee of a cool £50m is reported to have been negotiated for XL Business Finance founder and owner Mark Redman. A not such a daft fee considering the fee paid recently by Chelsea Football Club for Torress. At the time of press release Mark Redman was unavailable for comment as he has apparently done one to some boiling hot holiday destination  and never to return. Dream on!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Other than a businesses own bank there are still only a few independent asset finance companies offering hire purchase and finance lease facilities. And depending upon which bank you are with you might not get offered asset finance at all. If a bank wants to deal with you then you will get some of the best deals possible. However do you really want to tie up valuable banking lines which may restrict your future ability to obtain funding. If you can get funding via a third party funder it is always advisable to spread it around a bit. You may have to jump through a few more hoops but it will certainly be worth it!

We think so but then again why wouldn’t we ! As an independent business finance specialist we are firm believers that borrowings should be spread across as many financial institutions as possible. We also believe that any form of invoice discounting is better than a bank overdraft.

The problem with a  bank overdraft means that you are at the beck and call of the bank. An overdraft is repayable on demand and at the first sign of trouble it can be withdrawn at a moments notice. No one ever thinks this will happen but believe you me, we have seen it happen and the consequences are not pretty. Another problem with bank overdrafts is that the amount you can borrow is determined by the strength of your balance sheet or the level of  security available. Bank overdrafts of any significant amount are normally secured against bricks and mortar.

Invoice discounting couldn’t be different. A facility is secured against your unpaid invoices and within reason as your business expands so does the size of the facility available. Providing you are looking for standard trading terms borrowings of 80% of debtor book are the norm without the need to provide additional security.

Directors warranties are the normal comfort obtained from the invoice discounting company which provides an indemnity against any fraudulent activity. Fair enough one thinks

XL Business Finance has been helping the SME market for over 10 years sourcing the right kind of funding for a business’s particular needs. Give us a call today to see how we can help you

We have come across a very interesting scenario in the last week or so whereby another broker had bee quoting a very very cheap rate on a hire purchase deal. Not wishing to criticise my fellow broking colleagues I suggested to the customer that maybe  not all is at it should be.

 Most finance companies have the same funding costs and they have the ability to link it to fixed rates or variable rates. At the time of writing this article the cost of fixed funds for most finance companies is around 4.o%. I would suggest that a margin of 2.5-3% would be a fair return giving a nominal rate to the customer of about 6.5-7%. Therefore when a customer was being quoted 5.5% on a hire purchase deal one can only deduce that the broker was about to sign the deal up on a variable rate. Most finance companies on a variable are taking a min base rate of around 3% so this would seem to stack up.

At a time when interest rates are really low it would make sense to go for the slightly more expensive fixed rate because rates are only going to go up but maybe not in the immediate future. At the end of the day it must b the customers choice and as such the customer must be aware as to what he is signing up for. As provision of  hire purchase or finance lease to business users is totally unregulated the end user must be aware that even a written quote may not contain this vital information