You might be a rock star at unplugging the kitchen sink or crafting a killer bridal updo. You might love to transform the backyard into a wonderland. Maybe you're that guy who can fix anything.
Whatever your skill, kudos for following your passion and turning it into a business you can call your own. What you might not be prepared for is all the business stuff that comes with chasing your dream and becoming a small business owner.
But for your business to grow, you have to be as good at running a business as you are at the things your business does. As a small business owner, you need to understand the ins and outs of running a business.
Learn about these finance terms related to running a small business.
Accounts payable is the term used to identify the money you owe to others. It might be another vendor or supplier. They are your business obligations owed to others.
Think of accounts receivable as the opposite of accounts payable. The receivable part is the money owed to your business for your services. If you provide the service and invoice a client, it becomes your accounts receivable.
This is the term that explains the income you get over a period of time. The revenue goes into your accounts receivables.
Assets are valuables owned by your company. Assets can be tangible, such as real estate, equipment, and furniture, or intangible, such as trademarks and patents.
A business plan is the foundation of your business. This document fleshes out your mission and vision, ownership details, organizational structure, capital requirements, income projections, and your sales and marketing strategy.
Cash Flow/Cash Flow Statement
Cash flow is the amount of money that comes into and goes out of your business over a period of time.
Each month your business has accounts receivables. This is the cash flowing into your business. Also, each month your business has cash leaving it through your accounts payable.
The cash flow statement records these transactions within a specified period.
Small businesses often need to obtain a line of credit to help them get started and cover their expenses. Your credit limit tells the maximum amount of money an investor or a lender can give you.
Gross Profit and Net Profit
As a business owner, profit is important to you. Understanding the difference between gross and net profit is critical.
Gross profits are the profits you have coming into your business once you subtract the cost of the items you sold.
Net profits are not just the cost of the item minus the cost of the product. It is the profits minus all expenses related to the business. Net profits commonly referred to as the bottom line, explain how much money is left in the business after all the costs and expenses are subtracted.
An income statement, also known as profit and loss statement, shows a business' revenues and expenses.
By studying an income statement, a business owner can easily know their profits or losses. They can also tell if their expenses are too high, and establish whether the business is on course to meet its financial objectives.
Understand These Finance Terms!
Being a small business owner means being business-savvy and keeping an eye on the money. With this guide on basic finance terms, you now have a stronger understanding of your business' finances.
Keep learning and feel free to learn more about how we can help your business.
More and more startups are entering the business scene every day. Accelerators are also popping up to support those startups.
In fact, between 2008 and 2014, accelerator programs in the U.S. increased at an average rate of 50%.
Participating in an accelerator program can be immensely helpful in the early stages of getting a company off the ground. This goes right along with finding investors to support your company.
Of course, you have to find the right accelerator for your business. We've made a list of some of the best accelerators focused on supporting and investing in minority businesses.
Keep reading to find the right minority business accelerator for you and your startup!
What Accelerator Programs Really Do
Accelerator programs for entrepreneurs help support startups in the early stages of their business.
These programs do not necessarily provide early startups with financial funding. However, some accelerator programs do invest in the companies.
Accelerator programs mainly support startups in the form of mentoring and advising entrepreneurs.
The sessions are short. They are usually just a few weeks to a few months time. However, they are designed to jam-pack helpful information into this short period of time.
Accelerators are all about literally "accelerating" your startup's rise to the top.
You can find accelerators that focus on many different niches within the startup world. Here, we've looked for the best startup accelerators that are focused on investing in underrepresented entrepreneurs (i.e., women and people of color).
Here are 5 of them.
5 of the Best Accelerators for Minority Businesses
This business accelerator fund is focused on investing in startup founders identifying as women, people of color, or members of the LGTBQ++ community.
Backstage Accelerator does provide financial funding, in the form of 100K USD capital in exchange for 5% equity in the company. This 3-month program also provides several educational opportunities. You'll hear from experienced entrepreneurs, investors, and many other experts in the business world.
They promise free city co-work space during the program. They also offer support in building a community within the entrepreneurial world.
NewMe offers one-week accelerator programs in several cities around the U.S. Locations include Cincinnati, Columbus, Chicago, Indianapolis, and Miami.
They promise small cohorts with no more than 8 founders in each group. This ensures more individualized attention during your participation in the accelerator program.
Dreamit Ventures offers 3 different accelerator programs for entrepreneurs. It just depends on your company's niche. The three programs are HealthTech, UrbanTech, and SecureTech.
HealthTech focuses on startups in the healthcare industry. The UrbanTech program supports environment startups working in urban development. Finally, SecureTech works with startups that are in the security niche.
They promise to provide ample networking opportunities within your industries. Dreamit can also help connect your startup to some of the best potential customers.
Located in Austin, Texas, DivInc stands out from other enterprise accelerators because of their focus on women and people of color. To apply for their cohort, the founder or co-founder of the company must be a woman and/or person of color.
The company also must be a for-profit enterprise in tech, or be tech-enabled.
DivInc's program lasts for 12 weeks. The program offers many promising benefits. Some of the perks include one-on-one coaching, weekly workshops, weekly mentor meetings, and free co-working space for 6 months.
You might have already guessed it from the Spanish name. Manos Accelerator is a minority business accelerator that focuses solely on Latino entrepreneurs. They work with entrepreneurs from both the United States and from Latin American countries.
Manos Accelerator currently offers a 3-month virtual accelerator. This program provides one-on-one mentorship via video conferencing. This is an excellent option for Latino entrepreneurs in other countries. You may not have the funds or resources to attend a program in a specific U.S. city.
Manos also offers a one-week intensive scale-up program in Silicon Valley.
We want to help you find the best accelerators, investors, and other opportunities to help your business thrive! Pitch us today to see how we can support you and your business.
Starting a new business comes with a long list of challenges, both foreseen and unforeseen. One of these is the matter of startup capital.
For the confident entrepreneur, challenges are just a part of the path to success. Some may find injections of capital from investment firms. Others may rely on personal assets and available capital.
Can a new business survive without capital from angel investors? What does it mean to acquire Series A funding? What does it mean to resort to bootstrapping?
Continue reading below to find out more about how new businesses get their first influx of funding.
What is Bootstrapping?
Bootstrapping describes the process by which an entrepreneur starts a new business with little to no capital. The entrepreneur relies little on outside investments, finding sources of capital elsewhere.
This often involves dipping into one's savings or personal assets. Sometimes, the entrepreneur will rely solely on the operating revenue to drive growth.
Bootstrapping is a difficult way to start a business, as it demands hard work and a leap of faith.
Sometimes, a company may take orders for a product before the actual product is ready. The company then uses the money from the orders to finish and deliver the product.
What is Series A Funding?
Series A funding comes from outside investors, such as angel investors or investment firms. In this first round of financing where the company offers partial ownership to investors.
The new business must approach investors ready to sell the idea in mind.
The new business in question must present proof of the idea, current progress, market research, and risk involved. Investors may also consider the strength of the executive team.
Receiving Series A funding is often a reason for celebration. For many entrepreneurs, this is a mark of validation.
What Does the Round of Funding Cover?
At this point, the business may still be new and small. Though the business may generate some revenue at this point, the injection of capital aims to grow the business.
Investors take on a lot of risk when they invest in young companies at this point.
Series A funding often covers some of the basic aspects of business functions. Funding often goes toward salaries and market research.
In some cases, the product or service may not yet exist on the market. A new business may use the funding to complete the product or service to sell on the market.
Get Your Business off the Ground
A confident entrepreneur will let nothing stand in the way of their success. When you first start a new business, you may find yourself bootstrapping. However, you may eventually need to seek outside investments.
Your business may consider Series A funding to get the ball rolling with great momentum.
Score 3 Angels looks for promising entrepreneurs on a mission to solve the toughest problems. Does that sound like you? Click here to learn more about us and how we can help your business grow.