Good And Bad Debts In Business

Good And Bad Debts In Business

Who among us doesn’t have debts? Even for once in our lives, we have asked for someone to loan us a sum of money. In business, it is often the same. Some business owners loan money to put up their businesses; some for additional expenses that it incurs. No matter the reasons are, debt is part of our lives.

What is Debt?

According to the FreeDictionary: Debt is something owed, such as money, goods, or services; an obligation or liability to pay or render something to someone else; a condition of owing.

Debts have two types: Good and Bad.

Types of Debt

Good debt – a debt that helps you generate income and increase your net worth. A business’s good outcome is the main reason for this type of debt.

Bad debt – a debt that put no good for the business; it even depreciates your assets. A type of debt that you incur or purchase that will not benefit your business.

What’s the difference between the two?

It is how it affects the business. If the debt increases the net worth or has a future value then it is a good debt; if it doesn’t and you have to pay for it, it is bad debt.

Examples of Good Debt


Regardless of the business you choose, even if you are an employee, an investment in education should essentially possess by an individual. The greater the education is the possibility of high earning potential. Education can put you in a good-paying job and will open many opportunities. Don’t think about the long journey you take; this is an investment that has a good return and can put you in a good career.

Loaning to put a small business

Putting up a small business is helpful in starting your career. You don’t have to worry about unemployment or waiting for your paycheck because your willingness and hard work will depend on your earnings; you are the boss.

Examples of Bad Debt

Automobile loans

Aside from cars are expensive, it is high maintenance. There are expenses that you have to incur in maintaining your car. Furthermore, purchasing a car is a waste of money, you often pay the interest only. There are times, our payment for the car loans only reduces the interest and not the principal amount. This is not a good investment as time will come that its value will depreciate.

Credit card loans

Like purchasing a car, credit cards, also have interests. In using this, you are paying more than you loaned, a waste of money on your behalf.

Life has no guarantee, and so does debt. From the examples given, like in education, it cannot merely provide you with wealth and success. Pushing yourself harder will help you gain it. You will experience many trials before reaching the top. The good thing about education it gives you an edge over the other; still, it will depend on your abilities and capabilities. Always remember that everything involves risk.

Avoid Getting Your Business Sued

Avoid Getting Your Business Sued

Business set up is not as easy as you think. You have to bear in mind some important matters to help you achieve a smooth running company that runs for a long time. Businesses’ common mistake is violating the law. A smooth sailing business does not need this kind of error.

Common violations the businesses do

Business, same as the owner and its employees, is not perfect. It sometimes happens to encounter some violations. Typical violations are the following:

  • Unregistered or making your business legal.
  • Failing to file taxes and making of the report.
  • Copyright, patent and Trademark violation.

Dealing with the violations

Legality of the business is always a proper precaution. Register your business and give the necessary documents and reports needed. Put in mind your business’ legitimacy to ensure the longevity and to avoid a future lawsuit.

Other reasons putting a business into a lawsuit

Aside from the following mentioned above, another reason to sue a company is a scandalous or libelous act; instances that limit ourselves and forgetting the ethics learned. Fighting your belief sometimes puts us to our limit and ignoring your morals.

How to avoid a lawsuit

  • Watch your word

The business is giving importance to their image. The owner, as well as the employees, should avoid scandalous and libelous act. The overall performance and perception of business matters. Think first your actions for a specific situation. Avoid situations with conflict of interest. The damage is not only on your part, as well as the business’s integrity itself.

  • The separation of personal matters from the business.

Separate personal assets from the company. If you merge personal to business, engaging in a lawsuit will result in your personal assets being dragged. You don’t want to include your holdings in the trial. It separates business from personal and still lets you enjoy the rights and responsibilities of an individual.

  • Put your business on insurance

Insurance will help a company protects itself from any lawsuit that it may face. It protects you and the business from any liabilities. You should also put in your contract that for certain situations, like when the supplier did not fulfil their obligation, you don’t have responsibility for the inconvenience upon completion of specific work.

Final word

Business is important. Handle it like how you treat yourself. Protect it the way we care for ourselves. Aside from the above mentioned, you can also protect your files. Most of the businesses today make the use of a computer. Software, like antivirus, is a necessity to protect their data. Perform a monthly check-up of your computer, provides the necessary backup for the files safety assurance. Having a backup ensures you that whatever happens, you a file to use.

A legal consultant helps a business primarily for insurance and for setting up any document that shows about the enterprise. They help you put everything in writing that says about your business. Aside from this, they are helpful in any lawsuit the company may face.

Signs That It’s Time To Close Up Your Office And Stop Fighting

Signs That It’s Time To Close Up Your Office And Stop Fighting

Starting a business is tough and closing one is even emotionally tougher. As a business owner, we often envision our enterprise to succeed; yet, in life, there’s no guarantee – even in business.

There’s a saying: “A quitter never wins, and a winner never quits”. Yes, it is, yet, this isn’t always true. If you are drain emotionally, then perhaps, it’s time for you to call it quits. Seek in your heart, do you really want to continue the business? Your heart always knows what’s right. Try listening to what it says.

Signs showing a need to close the office or business

  • You no longer recognize yourself

Slowly, you’ll notice a sudden change with yourself. You become impatient, you can’t even attend to special occasions that worry your family. You tend to neglect your family because your focus is on how to save your business. You are not the same you before putting up the business.

  • A Lot to deal with

As a business grows a greater the demand for employees. We cannot do all the works by ourselves. We need to find someone to do the job for us or ask for some help. Apparently, not everyone can afford all the necessary workers you need.

  • The excitement is gone

Excitement is what everyone feels in starting up anything, even for a business. Your workload for the day gives a thrill to you. This feeling subsides as you have responsibilities with a lot of work. Exhaustion replaces the excitement over a period of time.

Additional Warnings

  • You are not meeting the annual capital. Failure to fulfil the annual requirements for a number of times is a big no for any business. It is a significant sign to consider in deciding to close the office or business. Don’t wait further as it can lead to financial losses not only professionally, as well as, personally.
  • The business is affecting your health. Feeling tiredness over a long period of time is unhealthy. You don’t want to keep a business that affects your physical health as “health is wealth”. Money is useless if your health deteriorates.
  • The demand for your product is decreasing. You know how important to consider the needs of your customers. The sign of loving your own products more than the customers is a big factor to consider if you have to continue or not. Suggestions and the needs of your customers are helpful, however, failure to meet them will result in losing customers and your business.

These are signs that give us awareness of stopping and closing our business or office. Furthermore, it is what you feel that matters most. If the following signs are showing up on your face, reflect, listen to your heart. “When it comes to forks in the road, your heart always knows the answer, not your mind.” according to @marieforleo. Our hearts sometimes give us the answer, still, facing it is frightening; answers we never wish to receive, however, they are helpful in decision making, even when it comes to business.

What Can You Do With A Business Degree?

What Can You Do With A Business Degree?

At an early age, we already have our desires. We oftentimes know even the type of career to take. There are times our own family has to say about what path to take. No matter the circumstance, we should follow our own preferences in the future.

Most of the businesses today offers business careers that provide skills mainly for managerial purposes, financial, marketing, and strong leadership. Business studies not only provide you with these skills but even gives you the choice to invest in a further specialization like Masters in Business Administration, Finance, and Management. Moreover, specializations will give you a high percentage of employment.

What is Business Degree?

A business degree contains a broad coverage. Having a business degree doesn’t always mean you are in a leadership role. A Business degree becomes your stepping stone to a high-salary career. Most business degrees include profitable skills that school provides.

The scope of Business Degree Careers

Accounting and Finance

If accounting and finance is the career path you want, typically, the work involves reviewing company’s financial status. You have to check the cash flows, tax, managing records, and all business transactions. They give an overview of the business’ status. They have a say in the whole business performance.

Management Career

One of the highest paid careers in different industries. You cannot put someone in this career without a proper knowledge in managing. In this career, investment in knowledge is essential. Management provides the structure and strategy of the workspace.

Other Careers

Aside from the above-mentioned careers, these are some of the careers that also needs a business degree:

  • communications,
  • hospitality and leisure,
  • insurance,
  • journalism,
  • law,
  • risk management,
  • public relation, and more

To state an example let’s look at journalism. Business in media mostly involves writing, covering a specific news on tv, newspaper, and so on. These journalists don’t oftentimes focus on that scenario alone, they also need to think of their roles in sales, marketing, branding, advertising, and more. They are not just journalists to write, they need business degrees, of some sort, to fulfil their career.

Another career, public relation, also needs a business degree. Communication skills are not the only factor to consider, you should have business operations and management knowledge.

Business degree lands to a range list of careers. It gives useful intelligence and skills useful for a career path, and they are as follows:

  1. Proper communication skills
  2. Time management skills
  3. Teamwork
  4. Leadership skills
  5. Analytical skills, and more

Regardless of career path you choose, knowledge of a business career is a must. A business degree is a stepping stone in reaching the professionalism. It also provides the best exercise for further knowledge in handling specific tasks that most businesses do. For students, investment in business knowledge is fundamental. Regardless of the journey, study hard, focus, and invest in the knowledge that businesses need. Expect a return on investment for the hard work you put. Many opportunities are waiting for business degree graduates. Take business degree courses if you wish to enter business careers in the future.

When Is The Right Time To Set Up Another Branch Office?

When Is The Right Time To Set Up Another Branch Office?

Owning a successful business can give you an idea of setting up another branch office. Why not? You know the struggles, the risks, and so many considerations that a business needs. Before taking the action, remember that setting up another business resembles starting over again.

Helpful considerations to decide if this is the right time

  • The status of your current business

Remember the current status of your business. Consider how well the sales and inventories, the number of customers, the quality of products and services. Are you providing them enough to their needs? How stable is your current business? Answering these queries give a response if this is the perfect time to put up a new branch office.

  • Money consideration

As mentioned, setting up another branch office or business resembles putting up a new one. Money is important. You need an assurance that starting the second workplace won’t affect your other business. Think about the expenses to incur like rent, insurance, payroll, inventories, equipment, and so on. If you are financially ready, then, nothing to worry. You should have enough money in funding your new branch office.

  • Readiness to trust others

If you have one business, you can give time to it. You can supervise it personally without a problem. Setting up another branch will give you difficulty in doing this. Ask yourself, are you ready to entrust the management and supervision of the business to other people? Supervising means, you can ask a help from a trusted employee, such as promoting them to a managerial position.

Additional Mentality in setting up another branch office

  • Location

Are you ready for your next location? First, find a perfect new site to put up the branch. Gather information from that location about the customer’s needs. Ask yourself, can you provide their needs. Answering this questions will give you the mentality that this is the perfect location for your next branch office.

  • Financial risk

Upon thinking of putting up a new branch, you have to prepare yourself for the financial risks. You will experience difficulty in keeping the finances for both, so better keep them separately. This way, you can determine the status of each business; if they are successful or not.

  • Consider giving a different approach

Putting a different approach to each of the businesses helps. Like for example, offer products or services to the new business that the other one doesn’t have to gather new possible customers and even old clients. Somehow, this will differentiate your business from one to the other.

Setting up a new branch office is another risky decision. You may experience the same struggles, problems, and difficulties. The good thing about it is you already know how to deal with these struggles. Preparedness is always the key. Readiness to face problems with products and services, employees, and so on.  It will also guide you to the question, is this the right time to set up another branch?

Is It Important To Hire An Accountant For Small Business

Is It Important To Hire An Accountant For Small Business

Accountants can make your life easier. They help you in business planning, filing loan application, auditing, and handling of money matters. They can expertly give a preview of the overall performance of the enterprise as well as its financial transactions.

Small businesses encounter lots of challenges in different stages of growth. With too much workload, many of them save money by hiring an accountant to focus on the financial operation. Though it may seem a costly decision, the fact that there is a professional to handle the records and bookkeeping of the company is the best option.

Benefits of hiring an accountant:

Saves your time

We frequently hear the expression “Time is gold”. It bears truth in personal life or business. Hiring an accountant gives you extra time to spend with your family. You stop worrying about tasks regarding finances. As the owner, you can focus on studying helpful strategies to grow your company.

Helps you manage complex accounting tasks

Most people know how to add and subtract. An accountant knows about this fundamental knowledge and a lot more. He studied accountancy for years then took an examination to get a professional license. With expert knowledge and skills, he can handle simple to complex problems that businesses faced.

Offers cost-cutting measures

The accountant has overall access to the business performance. He can quickly determine unnecessary spending. He vigilantly monitors all expenses to ensure the progress of the enterprise. He keeps a record of expenditures that is essential in decision making.

Finds ways to reduce your tax

An accountant assists business owners in minimizing tax fees. He knows various methods to cut it. He is aware of exemptions or breaks that lower your taxes. The money saved can be used for other purposes.

Assists you make immediate decisions

Since he monitors the business cash flow and keeps a record of business performance, you can easily consult him on budgeting issues and other problems. He can give a well-detailed opinion regarding finances of the business. Concrete understanding of the business performance is essential in decision making especially in building plans for the future.

Hiring an accountant even for small businesses is essential. He is helpful in many ways such as recording and monitoring of the daily activities in the financial field. His opinion is critical and constructive in decision making. An accountant is a must-have investment for businesses. His expertise can give you answers to resolve financial matters.

An accountant is an asset to the company. The money you pay for hiring one can significantly contribute to the smooth operation of your business. In the end, you and your business gain more with his help.

Questions To Ask Your Business Insurance Agent

Questions To Ask Your Business Insurance Agent

Business insurance is a must-have if you want to protect your venture from any catastrophic event that could strike anytime. It is your cushion from loss, mishap or lawsuit and will keep you afloat during hard times. It keeps your assets safe and protects your acquired assets when business hits bottom. As an entrepreneur, you do not want your financial investment gone all of a sudden.

To know which type of policy is appropriate for your business, getting information from agents of various insurance companies in your area is the first step. Once you find the right agent, he will be your partner-adviser as you go through the process of choosing a policy that offers optimum coverage.

Five critical questions you must ask your business insurance agent:

What is the right insurance for my business?

Every business needs different coverage protection. It is necessary to study each type of insurance to get adequate protection.

Property and casualty insurance – provides coverage for physical property in case of flood, fire and theft.

Liability insurance – mitigates potential financial loss when someone sues your company for negligence.

Workers’ compensation insurance – mandatory insurance to protect injured employees

Product liability insurance – pays for the damages that your product caused.

Commercial auto insurance – pays for any accident that damage your vehicle or cause harm to others during business.

Life and disability insurance – provides a fund for the owner, employee or business partners in case of disability or death.

Health insurance – covers a portion of your employees’ medical services fee as well as yours.

Business interruption insurance – provides a fund to cover profit loss and cash flow during the time that your business operation has stopped.

Professional liability insurance (Errors & Omissions insurance) – covers the damage due to an error during professional consultation or omission of facts that caused harm to clients.

When is the right time to get business insurance?

The best answer is as soon as you open your business. You need to protect your investment and yourself from potential hazard or liability. If you employ people, it is mandatory for employers to secure workers’ compensation insurance within the first month of operation.

What are the salient features of insurance policy that I need to understand?

Every insurance company has unique policy package. Study the scope of coverage, the limitations, the nature of liability limitations, the benefits and the premium. Ask your agent to give you pointers on how to file claims.

What is the government’s required insurance?

To secure a business license from any state, you are required to get general liability insurance with minimum coverage. It is up to you to upgrade the policy if you want broader protection or retain what you already have. Other types include workers’ compensation insurance, unemployment insurance and health insurance.

How can I reduce my premium payments?

Many insurance firms offer lower or discounted premium if you get a comprehensive insurance policy or get bundled package. The size and structure type of business are also determining factors. Other cost-cutting measures are hiring a risk manager, employee training, fire safety precautions and sound security system.

As the cliche says, preparation is the best protection!