Finance Coach - Vol. 25

Finance tip: Household

Spread out your washing. Whenever you are doing laundry, or if you use a dishwasher, rather wait to have a full load before turning on the machine (not that you need an excuse to put your chores off!). Using the washing machine or dishwasher uses up quite a fair amount of water and electricity, so having less than a full load at a time is a waste of both. Using your dishwasher to do a lot of dishes, though, is actually a smarter choice than washing them by hand. Hand-washing is inefficient for anything more than a small amount of dishes, as there is a lot of water wasted in the process - so unless it’s only a couple of bits and pieces, rather wait till you can load it up into the dishwasher. Another way of saving energy on these machines is to refrain from using the hottest setting. Other than in exceptional cases, using a lower setting will give you the same result, and use a lot less electricity…

Business tip: Finance

Look to your friends and family first for financing. Small businesses generally need to raise less money than larger ones for start-up or bridging purposes. So if you’re looking at raising finance for your small business, and you’ve exhausted your personal resources, consider approaching your friends and family first for the extra that you need. But don’t go cap in hand; make it a business proposition for them, and treat them in substantially the same way as you would a bank or financing institution. (1) Show them your business plan: It may not be as professionally presented as if you were approaching a bank, but it shows them that you’ve done your research. (2) Show them your passion: Tell them from the heart why it is that you want do what you want to do, and how passionate you are about the idea – this is a lot easier with people you know and love than it is with a bunch of suits from your bank. (3) Make it worth their while: There is generally a broad band of interest rates between what they could make on their savings and what you could get finance at (lending institutions see small businesses as risky, and aren’t afraid to charge the earth on the money they lend you). Offer to pay them at a rate somewhere in the middle – this way, they have the chance to make an increased return on their money, and you pay a lower rate of interest than you otherwise would. (4) Respect their investment: Realise that they have gone out on a limb for you, so make sure that you put every last ounce of energy into the business to make sure it works. And don’t even think about skipping payments – you wouldn’t dream of doing that to the bank, would you?