SMB Finance: What You Need to Know


To be successful in today’s marketplace, you need to integrate appropriate, efficient financial management practices. Whether this means getting the necessary amount of start-up capital, minimizing debts or even cutting out those unnecessary expenditures, we wanted to offer a few tips intended to give today’s business owners the information required in order to more effectively manage their SMB finances and in the end, become profitable.


Numerous small businesses have discovered that partnering with banks and financial institutions on a recurring basis when it comes to SMB finance or in an effort to take the company public, makes a great deal of sense. If a small business is thinking about selling stock shares to members of the public, that company really needs to take some time and weigh the benefits and the cons as well, in order to figure out if this is, in fact, the right step. While doing so can ultimately encourage business growth, get a company more capital and serve as funding research, it also has drawbacks. Among the more notable, those companies that do go public generally have to give up some control. Additionally, management becomes scrutinized at a greater level with public companies, and in some cases, public acquisition can be rather expensive as you may have to implement new software and other such assets.


A merger happens when two or more businesses come together to become one company. An important step prior to any merger is to hire a go-between to facilitate all aspects of the transaction. Business owners should assess any potential intermediaries as far as their overall

qualifications as you want to make sure that this person has the necessary experience, is ethical, educated as far as SMB finance, and of course professional. The intermediary assists also with a lot of the forms and contracts that are inevitably involved with most mergers; these could include the agreements as far as an asset purchase, stock purchase, and franchising.

Loans and Investors

In launching any new business, obtaining necessary start-up capital can be one of the biggest hurdles. Different types of businesses have various opportunities when it comes to getting that needed financing, but many generally will go through SBA loan programs available via the U.S. Small Business Administration. Some other options for startup capital when it comes to SMB finance…loans are given by commercial lenders, approaching banks or credit unions. There are also some state-specific financing programs; you might have to use credit card companies. And even friends and family members could be potential avenues. Each, of course, has benefits and drawbacks. The key is to perform due diligence as far as pinpointing what sort of financing option is best for your business’s needs.

Extending Credit

Many of today’s small businesses will actually offer credit to associates and customers and in this way attempts to increase sales while also improving relations with business contacts. This method can work but also can be somewhat risky for a new startup. You need to understand the rules and regulations associated with extending credit. There are laws that must be followed. Laws that affect collecting debt, consumer privacy and even rate change notification all come into play. Additionally, know your state laws as each state has its own credit-related regulations.

Debt Collection

Today’s small businesses will most likely at some point or another come across a situation where they need to collect a debt. The Fair Debt Collection Practices Act determines the rules and regulations in this area, and it extends to all personal as well as household debts. This act provides clarification on such things as what constitutes harassment, what can be construed as a false statement in terms of the debt collection process, and what might just be considered illegal when trying to collect the money that is owed to you.

Business Accounting

Bookkeeping and accounting aren’t really the same thing though many people mistakenly believe that they are. In terms of SMB finance and finance in general, “bookkeeping” refers to keeping consistent records of a business’s finances and also you want to maintain a handle  on those transactions that may be necessary for tax or reporting purposes. “Accounting” actually involves the analysis of the data gotten via bookkeeping, not to mention it can involve forecasting in regard to gains and losses. For most businesses, accounting begins with what’s known as a general ledger. The ledger provides that central hub you could say where everything is tracked in thorough detail. It is essential that whoever controls a business’s ledger spends the time necessary ensuring that everything is inputted accurately as flawed info could lead to problems come tax time. There are numerous software programs and also platforms now that help make SMB finance and the accounting therein that much easier.