There are a host of events that small business owners have to deal with including payroll, acquisition of new property, plant, and equipment, depletion, accounts receivable, inventory, utilities, and much more. One of the most challenging issues that small business owners face daily is proper budgeting. Running a small business means that there is not likely a lot of staff around, causing the proprietor to keep their hands in many or even all of these issues at once. This fragmented attention is often where so many problems can begin.
One of the reasons why most small businesses fail within the first three years of life is that they are not able to keep their finances together. When money is overspent unwisely, the company may be forced to go into debt to pay its employees, keep the lights on, and keep goods or service flowing. A slowdown in customer traffic during a time period of running in the red can cause an irreversible blow that sends the business into bankruptcy to rebuild or forces it to shut down entirely.
Making use of credit is one way to deal with combating budgeting problems; of course, if not handled correctly, credit can also be a curse instead of a blessing. It is too often that small business owners get the idea that they can simply charge away their problems instead of actually budgeting properly in the first place. However, this short-sighted thinking can by proxy lead to an even more problematic debt situation than running a business into the ground without credit. Fortunately, there are several ways that proprietors can perform proper budgeting for a small business and one of the best is with the use of a prepaid control debit card.
Having a control debit card on hand is a great way to help keep a handle on money situations because the balance is reflected only by whatever is loaded onto the card. By using this method, it is possible to maintain a viable line of credit that can be used in the same way as any other major credit card. The big difference is that users can only spend the money available on the card – no more; which prevents the chance of overspending and going into debt.
It is even possible to issue a control debit card for any employees who are trusted with a line of credit so that they can make approved purchases when needed. This allows business to keep running smoothly if the primary account holder isn’t available to make purchases. By setting limit restrictions, it is easy to make sure that their spending is curbed to whatever set amount that is dictated. This will prevent a careless or disgruntled employee from overspending the entire company into massive debt.
While it is still prudent to maintain a set of other business credit cards for serious emergency situations, using a control debit card as the primary mode of conducting business will prove to be a smart business decision that has many positive outcomes. There will never be the worry of overdraft charges, monthly and yearly fees, or serious interest rates that could impact the overall financial state of the business. Instead, the control debit card more closely mirrors function of maintaining a bank account with greater spending privileges than a regular bank card would offer.
Of course, having this type of debit card on hand is not a cure-all. A positive change in business spending practices must be made in order to keep the company in good financial shape. Fortunately, some good budgeting habits combined with the use of a high quality prepaid card can almost guarantee a good base for building financial success upon.