Four Reasons Why Small Businesses Fail to Grow

Running a small business requires superior problem- solving and an ability to look at the bigger picture. Aside from ensuring that your business turns a profit on a regular basis, you also need to be concerned with your own financial health over the long-term. That includes having a strategy in place for building wealth, so you can enjoy a comfortable retirement once the time comes to hand over the reins of your business to someone else. As an entrepreneur, there are certain hurdles you should be prepared for that can hinder your ability to create wealth. (For a detailed rundown, see? Investigator’s tutorial Starting a Small Business.) Here are four important challenges small business owners face.

1. Too Much Business Debt

Getting a small business off the ground typically requires a certain amount of cash. Taking out a term loan from a bank or a Small Business Administration (SBA) loan may be the answer, if you don’t have sizable savings you can tap into. With a 7 SBA loan, for example, it’s possible to borrow up to $5 million to establish a new business.

Even if you don’t need a loan to get started, that doesn’t mean your business will – or should remain debt-free. For instance, you may decide to open a business credit card to earn rewards on day-to-day expenses or take a merchant cash advance to help cover your cash flow during slower periods. Or you may want to borrow to expand, especially if the business is doing well. While credit cards, advances and loans can be invaluable to keeping the business running, their convenience comes at a cost.

If a substantial part of your business’ revenue is going toward repaying its debts, that leaves less income to devote to growth. It also leaves you, as the business owner, less money to funnel into a solo 401(k), SEP IRA or similar qualified retirement plan to ensure your own future. While the interest on a small business loan, the payments themselves are not. Paying down your business debts allows you to redirect funds toward your retirement or a taxable brokerage account instead.

2. An Inefficient Tax Strategy

As a small business owner, filing and paying taxes may be one of the most unpleasant tasks on your to-do list, but it’s a necessity. If you’re not taking advantage of every available tax break, your wealth without even realizing it. There are a number of tax credits deductions that you can claim on your business or personal tax return? An expense must be deemed both ordinary and necessary. This means the expense must be something that’s commonly associated with the type of business you own and directly connected to its operation.

When you don’t take the time to maximize every possible tax advantage, the result is an overly large tax payment. Hiring an accountant to manage your filing may increase your business expenses slightly, but it can also help to minimize your tax liability. In terms of building wealth, the long-term benefit can easily outweigh the cost.

3. Lack of Diversification

Being a business owner requires a certain amount of juggling, and you simply may not have time to pay as much attention to your investments as you’d like. The size of your assets affects your overall financial standing, including how banks see you, especially if you’re a sole proprietor. Investing in mutual funds or exchange-traded funds, eliminates the hassle of trying to put together a well-rounded portfolio, but it can be problematic if the funds you’re purchasing hold the same underlying securities.

Business owners can also run into issues if they’re not rebalancing periodically. This is vital to ensure that you’re maintaining the right asset allocation, based on your investment goals and risk tolerance. If you don’t rebalance regularly, you could end up with a portfolio that’s either too aggressive or too conservative. At one end of the scale, you run the risk of losing money by gambling too heavily on stocks. On the opposite side of the spectrum, you risk limiting your earnings potential if you’re playing it safe with an abundance of bonds. Either way you’re putting your future returns in jeopardy by not paying attention to the level of diversification in your portfolio.

4. External Risks

Aside from managing market risk, you also need to be cautious about insulating yourself and your business from threats that may arise in other areas. For instance, what would happen to the business if you were to become ill and could no longer oversee its operation? How would your business and personal assets be protected if your business became the target of a lawsuit? What would you do if your business was damaged by a hurricane or other natural disaster?

These are the kinds of questions small business owners must consider, because although such scenarios may seem unlikely, they can have a substantial impact on how you grow wealth. Choosing the appropriate business structure is an important step in minimizing liability, but you should also be proactive in reviewing your business and personal insurance coverage to ensure that you’re protected against every possibility.

Top 10 Reasons To Avoid Gambling

10. The cause of indolence

Gambling affects your life negatively. If you are a regular, you might have missed your work occasionally because of a late night games at the casino. On the other hand, if in case, after a major loss you make an attempt to work you won’t be able to concentrate for your mind will be preoccupied with the depressing thoughts from the loss. Many of the gamblers depend on the “luck factor” and start day dreaming ultimately losing interest in their job.

9. Results in depression and anxiety

Gambling addiction can be the reason of anxiety, depression and a host of other mental problems. The pressure of gambling addiction can generate terrific emotional pain which can only get worse over time. If you are a gambler and you feel anxious or depressed, it is suggested that you seek help right away. Gambling addiction has the highest number of suicide rates. Individuals are overwhelmed by this obsession and become despondent and hopeless, believing suicide is the only way out of the pain.

8. Deteriorates your physical health

If you have been gambling on a regular basis your physical health is at stake. People who gamble impulsively start neglecting their health. Additionally, the stress of the gambling obsession can even cause stress on your heart, particularly after shocking monetary losses. The emotional fall can in fact have an effect on your physical body in negative ways. A sheer game of luck, it will only cause you pain and nothing else. Is it not one of the big reasons to avoid gambling?

7. Makes you selfish, moody and rude

I have witnessed a lot of individuals who underwent a moral transformation to the worse after they got into gambling. The habit destroys the person ethically and makes him moody and rude. The greediness keeps his mind engrossed in the imaginary money, ultimately making him selfish. Inveterate gamblers don’t think about other people. Their only aim of life is to finance their addiction and to win back their lost money.

6. Will make you lose your friends

You might be wondering how this habit of yours will make you lose friends. Well, if you are in a habit of gambling then it is more likely that if not today maybe later you’ll borrow money from them. Chances are you’ll not be able to pay them in time due to frequent losses. This will really cause strain in your relations. In addition, your addiction will make you ignore your friends as you will be preoccupied with gambling. You may then even miss social outings and some very important events.

5. Ruins your family

Gamblers are too tough to reform ultimately turning out to be a loser and having no family. Not a soul wants to be in this world with a gambler who is grumpy, unstable and squanders funds. So the outcome is the spouse filing a case of divorce or just leaving the partner. Many families have been torn apart by this disastrous obsession.

4. Induces crime

Fascination of gambling compels people to commit crimes to support their game. An impulsive gambler never leaves this addiction even when he is left with no money and instead takes on crime to finance his very basic need of gambling. Some people even turn towards domestic violence and torture their spouse on a daily basis.

3. Diverts you from your aim

When your life is all about gambling and just gambling, it then becomes your primary activity. All of your vigor, motivation, energy and inspiration are only gambling related and you tend to lose focus on the main aspects of your life. If you have any special talents or hobbies, it is most likely that these hobbies will not be given priority and you’ll choose to ignore them.

2. Puts on hold all your future goals and aspirations

When you are addicted to gambling, it is obvious to stop thinking about the future. A gambler always lives for the moment and desires only instant gratification to feel what is known as the “gamblers high”. It becomes very hard then to focus on any of the future prospects as they tend to live in a world of fantasy, placing bets and dreaming that big jackpot. Neglecting aspirations and all future goals is living a worthless life and therefore this is one of the prime reasons to avoid gambling.

1. A curse that destroys you financially

It doesn’t take a lot of time to dig up a huge financial hole if you have an impulsive gambling obsession. Gambling can take away hundreds or perhaps even thousands of dollars in no time and add up to your debts. I have seen that people take lots of years to clear the debt and in their endeavor they even become bankrupt, ultimately devastating financial as well as personal life. Money is the reason why we all live and therefore the biggest of all reasons to avoid gambling is to save money.

Reasons Why Shouldn’t Use A Personal Loan To Pay Off Your Credit Card Debt

Many people in Singapore hold multiple credit cards at the same time as each card has its own unique benefits. Under such circumstances, people can potentially fall into a debt trap as he/she owes money to several creditors. There are multiple payments and due dates to keep track of, and the non-stop reminders about unsettled balance only adds to the tension. As you fall behind the due dates of making the payments, your debts will only become larger. One of the way out from this debt trap is having a personal loan known as Debt Management Plan or DCP.

DCP was introduced by Association of Banks in Singapore (ABS) in the early part of 2017 for all Singapore nationals and Permanent Residents who are facing difficulty in settling their debts. DCP is a type of personal loan where you can borrow a lump sum amount to pay off all your current debts right away. However, you can take the help of a DCP only for unsecured credit facilities such as personal loans, credit cards and other credit lines. Let us take a look at some of the benefits and drawbacks of a Debt Settlement Plan:

Benefits

  • You only have to make a single payment per month as a DCP consolidates all your debts into a single debt. This will help you save your energy and time and cutting the stress of missing a payment, as you no longer have to keep track of all the different creditors.
  • Lower interest rates with a DCP makes it easier to pay off all your debts and actually make visible progress.
  • When a DCP is managed well, you have a better chance of saving some money instead of spending your whole monthly earnings on paying bills.

Drawbacks

  • The biggest drawback of DCP is the potential of getting into more debt. People who are not careful about their expenses and have a habit of gambling are prone to get themselves further into debt.
  • Even with low interest rates, you may take longer to pay back your debt with DCP. In the long run, this will lead to more interest payment. To avoid this, you must concentrate on paying off your debt as early as possible.
  • If you fail to make timely payments, fines and interests will be imposed, which will only enhance your burdens.

If you choose to transfer your DCP to other banks, you will have to do it three months after your DCP is sanctioned. You will be subject to penalty fees which the original bank may charge for early termination or transferring your DCP. Since a long commitment is required with a DCP, you should do your research extensively before applying for a plan.

Once you have taken a Debt Settlement Plan, all your prevailing credit cards and unsecured debts are adjourned. You will be offered a revolving credit equivalent to your one month’s salary. You will not be eligible to apply for any new unsecured cards during the time your DCP is active, unless you have repaid a part of your debt.

Eligibility criteria

To be eligible for a DCP, you must be a Singaporean or a Permanent Resident. You must have personal assets worth less than S$2 million or your earnings should be in the range of S$20,000 and S$120,000 a year. Your consolidated unsecured debts must exceed by over 12 times your monthly income.

Fees associated with a Debt Management Plan

There are a few banks in Singapore that charge a fixed processing fee while the others charge up to 3% of the sanctioned loan amount. You should opt for a personal loan to finance your crises if you can wait for a few days. Personal loans are better than cash advance because of fixed monthly payments and low interest rates.

A Debt Settlement Plan will help you pay lower monthly sum with low interest rates. As a result, it will help you focus on a single contribution every month and have less financial strain. A personal loan in the form of a Debt Management Plan will help you negotiate with your creditors for removal of penalties to make your loan amount lower.