by dorraadmin | Nov 8, 2022 | Blog- Financial
If you’re an entrepreneur, you likely already have an idea of how important it is to track business expenses. However, there’s a key layer to this task. you should be aware of as well: the difference between direct and indirect costs.
Direct Costs
Direct costs are expenses that are relatively easy to tie to a specific product or outcome. For instance, if you pay a graphic-design contractor $1,000 to design a new logo for your business, that expense is a direct cost.
Indirect Costs
Indirect costs are more nebulous but equally important to track. These are expenditures not tied to any single product or outcome, yet they can have ripple effects across many parts of your business. As an example, your business might spend $10,000 on computers that will be in service for many years and across many projects.
Fixed vs. Variable Costs
Both direct and indirect costs can be fixed or variable. Fixed costs remain stable, while variable ones can change. Typically, direct costs are variable; for instance, materials may go up or down in price. But direct costs can sometimes remain fixed, with an example being labor costs that do not change regularly.
As for indirect costs, rent is an example of a fixed cost, as it will not increase or decrease for the duration of a lease. The cost of repeat purchases like office supplies, however, is variable.
Why Does It Matter?
Knowing the difference between direct and indirect costs may be critical when it comes to applying for grants or other types of funding, as eligibility is often tied to spending the money on one type of cost but not the other. Some tax breaks, too, are triggered by indirect or direct costs only.
Need Funding? Contact Dorra Financial Group
Regardless of how tightly you control costs, your business may still benefit from outside funding. To discuss your business’s financial options with an expert, just reach out to Dorra Financial Group.
by dorraadmin | Nov 1, 2022 | Blog
The real estate industry is considered a solid investment for investors who want to secure their financial future. Not only does it provide a steady income stream via rental properties, but it also appreciates with time. Below is a list of top reasons why real estate investment is suitable.
Tax Benefits
Various tax benefits follow after buying real estate. You can subtract expenses related to owning a property, such as your property taxes, mortgage interest, ongoing maintenance costs, property insurance, and the money you pay to promote the property to prospective renters. If you sell the property, the amount obtained is not taxed as income but is considered capital gains, which come with lower tax rates.
You Can Leverage Funds
Buying real estate properties in full is sometimes demanding. Leveraging real estate funds helps you use other people’s funds to purchase properties. Investors often seek money from banks such as loans and mortgage lenders and pay the finances back over time. The approach allows you to add your real estate holdings without necessarily investing the total amount you would need to purchase them on your own.
Diversification
Buying a real estate property and adding it to your investments helps boost your diversification. The approach saves you in tough economic times compared to stocks which may be down due to an economic downturn. The real estate investments you make may still increase in value during such times, which protects you from losses experienced by your other investments.
Steady Cash Flow
Buying real estate properties is an excellent way to boost your monthly income. Real estate developers can rent out their space to tenants regardless of whether their investment is residential or commercial. The approach helps you receive a monthly income in the form of rent, which is helpful when you are facing a major financial crisis, such as losing your job.
Passive Income
There is no single investor who does not want to earn a passive income. Buying real estate properties helps bring a steady flow of passive income, which an investor does not have to work for daily. You can, for instance, rent your property to a single-family and as a multifamily property. The rent obtained each month is considered a passive income.
Long Term Security
An investment in real estate is considered long-term, meaning that investors can hold their properties for several years as they wait for them to appreciate. You can also rent your real estate property to earn a monthly income as you wait for your property value to increase.
Investing in real estate is an excellent way to diversify your portfolio. Investing in the right property allows you to enjoy the benefits listed above. Make sure you get expert advice by contacting Dorra Financial Group to ensure your investment is worth it.
by dorraadmin | Oct 25, 2022 | Blog
Most small businesses hire an expert to handle their accounting, as taxes are sometimes challenging to understand. Small business owners should educate themselves regarding the basics of the TCJA as its changes to the federal tax code have a profound impact on their businesses. Here is what you should know.
What Is the Tax Cuts and Jobs Act?
The code lowered the income tax rates of C corporations from 35% to 21%. Other changes introduced by the TCJA affect S corporations, sole proprietorships, and partnerships, and the changes reduced the maximum tax rate for certain taxpayers. Such numbers may suggest that the TCJA has various benefits for your business as lower tax rates theoretically allow you to keep more revenue, increasing your profitability. However, the changes brought by the TCJA does more harm than good for small businesses.
What the TCJA Means for Small Businesses
The TCJA affects small businesses in various ways. These changes may feel concerning and surprising, but you are not alone in this. The 2018 tax year was the first year to be affected by the TCJA.
Smaller Net Operating Loss Deductions
You could forward unused losses for 20 years or back for two years. The TCJA limits the deduction to 80% of the net operating loss, and you are not allowed to carry unused losses back. There is no limit on how long you may carry them forward, but the overall effect results in a smaller deduction, which results in higher tax rates.
Smaller Business Interest Deductions
Before the TCJA was implemented, investors could deduct the interest accrued or paid on certain business debts. The TCJA has capped the deduction at 30% of your company’s accrued or paid interest. The maximum deduction would be the sum of 30% of your adjusted taxable income and the business interest income.
Lower Tax Payments
The TCJA indicates that C corporations owe 14% less yearly taxes. If your business is an S corporation, sole proprietorship, or partnership, it could owe less in annual taxes. However, surveys done by investors indicate that the deductions the TCJA eliminates have always resulted in higher tax payments.
Due to the many changes brought by the TCJA, small business owners may feel uneasy, especially when tax time approaches. However, online tax software platforms are updated regularly to reflect the latest tax codes. Contact a small business accountant from Dorra Financial Group to calculate and file your taxes to minimize your future tax liabilities.
by dorraadmin | Oct 18, 2022 | Blog- Financial
Thinking of running a food truck? There are many compelling reasons to invest in the food service industry, and a food truck provides a platform that can be adapted to a variety of business endeavors. If you want to grow your food truck business, consider the following tips for success:
Do your homework. It is necessary to perform quite-expansive research into the market to see what consumers in your region do- and do not- patronize. Find the trends and jump on board.
This leads to choosing what you offer carefully. You don’t want to invest in foods that don’t make sense for a truck- after all, is this the right venue for those choices? Choose the food based on your market research and revenue potential.
Make an exhaustive list of what you need to get started. Figure out how much money you will need to ask for- if borrowing- to keep your truck running smoothly for at least a year.
Do not go to all this effort with a truck that is doomed from the start. Make sure that you have a fully functioning and safe food truck to begin with. After all, it is the cornerstone of your new business.
If you will be requesting funding, set a budget and stick to it. This will also make it easier to measure gains and losses during operation.
Get creative about marketing your truck and make sure to take advantage of social media platforms. This will be a great way to let your patrons know where you will be parked so they can come and find you with ease.
Start now identifying high-traffic locations where you will park your truck. Begin pre-planning a route, but try to remain flexible, too.
Be sure to address and respond to any comments or reviews, particularly if there is a concern or complaint. Reply promptly in a courteous manner.
Want to grow or expand your small business? Talk to the money professionals at Dorra Financial Group. They can shed new light on your funding options, investment potential, and revenue streams that may help your business thrive and prosper. Call or visit today to learn more.
by dorraadmin | Oct 14, 2022 | Blog- Marketing
If you’re looking to gain and retain more customers (and who isn’t?), invest in website personalization. Your online business can be better than ever by catering directly to visitors of your online store.
Quicker Sales
Sales teams tire out when spending the bulk of their time searching for qualified leads. Create a website marketing campaign that segments your audience into personalized funnels. The strategy can arm your sales department to problem-solve for customers with the perfect products. Salespeople get to the best prospects quickly and spend less time closing a deal.
Targeted Product Recommendations
Your site can collect valuable data to discern precisely what item a shopper is looking for. More than ever, customers want to comparison shop and investigate. Use software to personalize and recommend comparable items on the page. You also can upsell with add-ons and warranties related to the item once they purchase. Link to onsite product reviews and send emails with news on price changes and deals to entice them back to the site.
More Time on the Website
Let the visit history and cookies to deliver value to customers. Blogs with product reviews, demonstrations and instructions keep customers on your site longer. Build your site in a way that welcomes visitors back and lets them pick up right where they left off.
Brand Loyalty
Shoppers want to sense a personality behind the brand. Online shopping can be just like making a digital visit to their favorite brick-and-mortar shop. Make the shopping experience as seamless as possible, and customers will stick to you, even if other brands offer lower prices and other unique selling propositions.
A loyalty program is an excellent way to gain repeat business, but a poorly-tailored loyalty system becomes a sore spot among customers. Customers keep returning to the comfort of your site with that personal touch.
Better Conversion for CTAs
Customers typically need the motivation to take the final step, and when it feels like a trusted friend is guiding them, they’re more likely to heed the call. Avoid repeating the same CTAs to returning visitors. For example, if you repeatedly ask an email subscriber to subscribe to your mailing list, you can annoy clients and lose their business. Presenting fresh offerings builds anticipation and engagement.
Website personalization pays off by earning you a strong repeat customer base that promotes your shopping experience over competitors. Take advantage of user data to benefit your customers and build your brand.
by dorraadmin | Oct 11, 2022 | Blog- Financial
Due to the busy life of most parents, preschool-aged children often receive some form of child care. Most of the kids are cared for by babysitters, nannies, and other family members, and nearly 1 in 4 children under the age of five is taken to an organized daycare center for childcare services. Below is a list of steps to starting a daycare center, even if you have no prior experience.
Research About Daycare Licensing Requirements
You may have started as a nanny or babysitter but must meet the required licensing requirements when creating a daycare business. That way, you can offer childcare services without running into legal trouble. You may start by contacting the state’s Department of Children and Family Services (DCFS) to learn more about specific regulations for childcare service providers. You must have CPR certification, a clean driving record, and documents proving you are committed to providing quality child care. Ask your local agency questions to ensure you satisfy all the requirements.
Create a Daycare Business Plan
Have a business plan that defines your daycare’s operations and procedures, a mission statement, budget, and staffing. The business plan helps to keep you on track and guides you through the startup process. It would be best if you also researched the costs of launching a profitable childcare services business. You may fund your daycare startup with your own money, daycare grants, or a small business loan.
Find a Location for Your Daycare
Whether you are planning to rent an already existing daycare, start an in-home daycare, or start a daycare from scratch, you must find a conducive location for your daycare business. Ensure you check the childcare licensing guidelines and the city’s zoning laws to ensure the daycare business complies with the guidelines.
Get Insurance
All daycare centers require various insurance types to protect children and businesses. Insurance policies include property, liability, business insurance, and workers’ compensation. You have to check with the local childcare provider’s licensing requirements for guidance.
Hire Staff to Run Your Daycare
A daycare with qualified staff is highly sought after by most parents. Childcare staff are subjected to fingerprinting and background checks for further background investigation.
Starting a daycare business is challenging but also rewarding in the long run. You must have a general roadmap for how to get started and contact an expert from Dorra Financial Group to know how you can secure funds to run your daycare.
by dorraadmin | Oct 4, 2022 | Blog
If you run a business and have a cash-flow concern, the first thing that may come to mind is to apply for a loan? But, there are many kinds of loans. There are other options as well. Which one is best for you?
Loans in a Nutshell
A loan is fairly easy to understand. Once approved, you receive a lump sum of capital from a bank, credit union, or financial agency. In return, you must pay the principal amount back with interest over a set amount of time, usually in monthly installments. The interest rate may is fixed at the time the loan is created, or it may vary over time.
Types of Small Business Loans
After determining that your business needs a bit of additional capital, these are choices to be made. In actuality, there are several types of loans as well as other funding options to consider. Here are a few loan types that might be useful for your business:
- SBA Loan. Guaranteed by the federal government
- Working Capital Loan. Used to fund everyday business expenses like payroll, rent, and operational costs
- Franchise Startup Loan. Specifically designed for new franchise owners
Then, there are alternative forms of funding to consider. These include but by no means are limited to:
- Invoice Factoring. An elegant process by which you sell outstanding invoices to a financing agent
- Merchant Cash Advance. An infusion of capital taken against your future credit card sales
- Equipment Financing. Specially designed for purchase or rental, and often not needed collateral
Partner with Dorra Financial Group
Here at Dorra Financial, we provide useful solutions for business funding needs. We’d love to be your financial partner. Give us a call today to explore the options that would best fit your particular business situation, whether it is a loan or another form of alternative financing.
by dorraadmin | Sep 27, 2022 | Blog- Financial
Small business owners soon realize that additional funding strengthens cash flow, provides a cushion for emergencies, and spurs growth. If you are considering applying for a loan, it is imperative that you should understand how to go about it. Here are the most important business loan requirements.
Focus on Your Needs
There is a considerable array of loan options for small businesses, and they vary greatly in their interest rates and requirement details. Your first step is to determine which loan type suits the needs of your company. Making this decision will save you time in document preparation.
Create a Business Plan
Traditional lenders will take your application more seriously if you have a comprehensive business plan. This plan should include an executive summary as well as a description of your company and its organization, management, products or services, marketing, financial projections, and need for funding.
Prepare a Personal Resume
As a business owner, your resume highlights your business and management experience. Lenders want to be assured that you are qualified to run your company. Be sure that this resume is properly edited and kept up to date.
Be Aware of Your Business and Personal Credit Ratings
Traditional lenders require a high personal credit score and business credit rating. If your credit scores are lower than they should be, do what you can to improve them. However, even if your credit ratings are imperfect, some lenders will consider personal guarantees, collateral, and other factors.
Have Profit and Loss Statements Ready
Among the business loan requirements that most lenders insist upon are company profit and loss statements. These are indications of the financial health of your business that demonstrate to lenders that you are reliable, professional, and ethical.
For more advice on preparing the business loan requirements, you will need to fund your company, get in touch with Dorra Financial Group.
by dorraadmin | Sep 20, 2022 | Blog- Financial
According to the Global Entrepreneurship Monitor, there are 31 million entrepreneurs in the U.S. All of them want to succeed and build wealth, right? Indeed, independent business ownership and building personal wealth are important parts of what we call “The American Dream.” Yet business success and wealth are not easily obtained.
Entrepreneurs, Use These Three Principles to Grow Your Wealth
1. Get expert advice. Growing a business and achieving business success is not a one-man or one-woman job. Neither is growing wealth. So, it is valuable to get business advice to provide additional perspectives and perhaps less-biased operating and management insights that will have a positive impact on the business. Similarly, it is wise to get financial and investing advice to guide decision-making when it comes to your financial decisions.
2. Make sure to pay yourself first. The early days of entrepreneurship may require pouring almost everything you have including time, energy, and money into your business. But that can’t last forever because it is critical to maintaining your health and well-being along the path to success. Decide what you need to live off of and protect those funds so that you don’t make poor decisions based on a survival mentality.
3. Plan an exit strategy. That will include asking yourself where you want to be in 5, 10, or 20 years, where you want the business to be at those points in time, where you may eventually want to pass the company, what your future role will be in the company, and what type of leadership team you will need now and in the future to achieve success.
How Will Business Success Be Achieved?
- Set growth goals.
- Develop a business plan to keep you on track.
- Benchmark your progress against competitors.
- Get the financing you need to support and propel growth.
Seek Expert Financing Assistance
Contact Dorra Financial Group, based in Atlanta, GA, your trusted partner in commercial lending. We offer a wide array of business loans to meet the needs of new and established businesses.
by dorraadmin | Sep 13, 2022 | Blog- Financial
We’ll try to keep this article short, while still informing you of the reasons why you need a financial advisor when considering a small business loan. If you don’t have one, then be prepared with the following business loan-related questions for the lender. This will get you the best deal you can manage – depending on the particulars of your present and projected business situation.
I. What kind of loan or credit suits my particular business model?
There are a variety of small business loans and credits available to businesses of all sizes. When considering a small business loan, it is important to consider the amount you need, the purpose of the loan, and your credit score. Some small business loans are unsecured, while others are secured by the business assets. The best small business loan for your business will depend on your individual circumstances – and a good advisor will be able to go through the benefits and detriments of each suggested loan type.
II. What type of documentation do I need for the loans you offer?
To apply for a small business loan, you will need to provide some documentation about your business. This may include financial statements, a business plan, tax statements, and information about the owners of the business. It is important to have all of this information ready when you apply for a small business loan, as it will help the lender assess your eligibility and loan terms.
III. Are there ways to lower my interest rates and other loan payments?
There are a few things that small business owners can do to lower the interest rate on their small business loan. First, be sure to compare interest rates from different lenders before you choose a loan. Also, make sure you are always up-to-date on your credit score and credit history, as this will help you get a lower interest rate. You can also work to build up your business credit score, which will make you a more attractive borrower. Finally, be sure to keep up with your monthly payments and stay in good standing with your lender – this will also help you get a lower interest rate.
IV. How does your company handle loan modifications and renewals?
When you take out a small business loan, you are agreeing to repay the debt over a predetermined period of time. If you encounter difficulties making your monthly payments, you may be able to negotiate a loan modification with your lender. This will involve renegotiating the terms of your loan, such as the interest rate, the amount of the monthly payments, or the length of the loan. It is important to remember that a business loan modification is not a permanent solution – it is simply a way to help you get back on track with your monthly payments.
V. What happens in the event I have trouble making monthly payments?
If you are unable to make your monthly payments, your lender may decide to renew your small business loan. This means that they will agree to extend the term of your loan, and give you more time to pay it off. It is important to note that renewing your small business loan will likely involve an increase in the interest rate, so be sure to compare rates from different lenders before you decide to renew.
Both the loan modification and renewal processes can be helpful ways for small business owners to get back on track with their monthly payments. Be sure to talk to your lender if you are having difficulty making your payments, and they will be able to help you find a solution that works for you. Before you make the call, don’t hesitate to reach out to us at Dorra Financial Group for more information on the process.
