Providing financial services for business: features of the sphere of finance
Much has been written about what kind of financial services banks provide for small businesses, but opening a large credit institution is associated with high costs and organizational difficulties. There are other forms of commercial products available for mid-level entrepreneurship. Small firms operate primarily in the insurance and investment sectors, but may also cover other areas demanded by business entities. What do financial services companies do? Read on and maybe you will learn something new.
Definition and specifics of financial services
Every student-economist knows that finance is not money, but relations that arise in the process of reproduction and distribution of wealth. The classification of services corresponding to this concept divides them into the following types:
KlassPodklassKratkoe opisanieBankovskieDepozityPrivlechenie available funds under protsentyRKORaschetno cash and cash obsluzhivanieInkassatsiyaZachislenie on p / sKonvertatsiyaPriobretenie valyutyGarantiiAlternativnoe and sale of collateral securing transactions with deferred debt obyazatelstvKreditovanieVydacha commercial zaymovForfeytingPriobretenie commercial obligations of the importer before eksporteromFaktoringObespechivaet deferral of payments on VEDPerevodTransaktsii with a p / s asset drugoyInvestitsionnyeUpravlenie and capital, incl. trust and directExperienced property appraisalConclusion on the value of assetsInvestment consultingConsulting on investment issues Investment broker servicesMediation in operations in the stock marketInsurance services of an insurance brokerInsurance actions in the interests of a client on its own behalfReinsuranceTransferring assets of insurance liabilities to another personDirectly with the right to insurance of property and transactions without it Brokerage services Mediation on stock exchanges (currency, commodity, stock) Rating services Assigning a credit rating Microloans Issuing small loans under a simplified system at higher rates Business consulting Including the service "financial business plan"
Financial services companies have a primary mission of overcoming a variety of business challenges. The range of products on offer includes:
- Outsourced accounting.
- Raising capital.
- Audit (mandatory and voluntary).
- Advertising and other brand promotion activities.
- Directed market research.
- Cost analysis and recommendations for their optimization.
- Assistance in renting or purchasing commercial real estate.
- Settlement of conflicts with authorities and contractors.
- Regular legal support and ad hoc legal assistance.
Smaller companies complement banks' financial services to business by being flexible, finding market niches not covered by them and acting more quickly. Let's look at a few examples.
Loans for foreign trade participants
Foreign economic activity is accompanied by many risks. The main problem is expressed by the "freezing" of foreign exchange funds. The importer, having paid for the delivery, has not yet received the goods. The exporter, carrying out customs clearance and shipping his goods, is also forced to wait for the receipt of proceeds.
Way out of the situation in foreign trade financing. Funds are attracted by banks on international markets at favorable interest rates and are used to pay off debts for the period of sale of imported goods or to receive foreign exchange earnings for exported products. At the same time, financial clients do not divert their own funds, which they can use with efficiency exceeding the interest on the loan.
Foreign trade lending for a period of up to five years is used for the purchase of equipment that pays off for years, as well as for payments for raw materials and components. Exceptions are some types of products (dual-use goods, toxic substances, etc.), which are subject to legal restrictions.
If necessary, an additional postponement of loan repayment is possible, which is important when the importer provides a commodity loan. This service is called post-export finance.
Businessmen and investors need each other. Financial investments are needed to develop entrepreneurship. Investors need capital to generate higher returns than bank interest. The relationship of partnership, mutual benefit is the main thing in the relationship between the entrepreneur and the sponsor.
Necessary conditions for attracting an investor
Searching for an investor means raising funds from the owner of financial resources.
Conditions for attracting an investor depend on:
- from the image of an entrepreneur;
- his ability to present his idea;
- demonstrate the success achieved.
The investor must be convinced of the consistency of the potential partner, his decency, organizational skills, competence. Information about the investor is published on specialized Internet sites, where his requirements for the project are necessarily indicated. The requirements for the customer are also indicated here.
For example, in a specific case, to attract investments in the amount of up to 3 million rubles. required information:
- about the team;
- market growth prospects;
- purpose of investments;
- financial plan;
- conditions for the investor.
Investment industries are indicated, including exceptions that will not be considered an offer.
Where to look for an investor for an existing business or startup
Business investment depends on the functioning of the project, which can be divided into stages:
There is an opinion among financiers: the larger the client, the better. It is much easier to "put" a large amount in one deal than to issue twenty small ones. It is believed that even if the profitability on small transactions is higher, it will be "eaten up" by the high costs of negotiating and assessing the financial condition of many small clients. But if you organize the work correctly, a small business will be a more profitable client than a large one. I will reveal several important points of working with small firms.
Fast solutions and fast growth
Banks and factoring companies that work with large clients usually consider a deal for several months. Small firms are unable to plan their activities for such a period. For small businesses, time is money that is needed here and now. Here, it is not the nominal cost of financing in percent per annum that comes to the fore, but the real cost of financing the supply and the promptness of decision-making. It is advisable to learn how to make a decision in three to four days.
Working with small companies teaches business valuation, not collateral
Pledge is one of the fetishes of the Russian financial market. But small businesses usually have no liquid collateral. It's easier for us than for banks, because factoring is unsecured financing against the assignment of a monetary claim. We evaluate not so much the client himself as his debtor. For example, a small young company delivers a product to a large chain with a payment delay of several months, but it needs money today. Does such a company have a chance to get a loan? Most probably not. Firstly, she definitely has no collateral. Secondly, there is probably no reporting that can satisfy the bank.
The factoring company will finance such deliveries, because the financial condition of not the client himself is more important to it, but the buyer of his products. Large, reliable, financially stable enterprises often turn out to be buyers of products and services of small companies.
What is factoring and the Life Group
Financial Group "Life" was founded in 2021. It includes seven regional commercial banks. The group has over 260 offices in 75 regions. In addition to traditional banking services, the group offers investment banking services, leasing and factoring products. In 2021, the group provided almost 40% of the inflow of new customers to the Russian factoring market.
Factoring is a range of services for manufacturers and suppliers who trade on a deferred payment basis. The main function is lending to suppliers by buying out short-term receivables.
Not only financial statements
QR Code Payments
Vyacheslav Semenchuk's business began with embarrassment: he could not pay the bill for lunch in a restaurant with a girl because of the cash left at home. The businessman thought about how convenient it would be to pay the bill using a QR code via a smartphone. At that time, he had to quickly go home for cash, leaving the girl to wait for him in a restaurant. Cooperating with friends, Vyacheslav began to bring the idea to life: they developed an application that allows you to bind bank card details to it.
Now, with the help of the new service, you can easily pay in shops, cafes, websites. The smartphone scans the code and, after confirming the consent to carry out the operation, automatically transfers the required amount from the card. The QR code can be printed on any surface: it can be a receipt or a pizza box. No terminals are needed - you only need a smartphone with the application installed on it.
Businessmen faced some difficulties. Users downloaded the app, but if they used it infrequently, it happened that they forgot about the app. A motivation program was invented: everyone who, immediately after installing the application on a smartphone, paid for the purchase with it, received a one-time discount.
We started to attract additional partners in parallel. So, through the service it is now possible to pay fines. Maximum convenience for the client is simple and profitable. The application is downloaded by an increasing number of people every day.
Saving time - how can you make money from this?
Bookkeeping and reporting is boring and time-consuming. However, this cannot be done without it altogether. Anton Sizov works in a team to create a service that greatly facilitates reporting.
At the start, I had to hire several accountants and provide them with a competitive salary. The first users received a tablet as a gift and free courses in which they were taught to use the service. Target audience - small and medium business owners. The price of services depends on the company's annual turnover and ranges from 8,000 to 80,000 rubles.
If an error occurs in the service, all losses and inconveniences associated with this will be reimbursed by the company. Now the company also provides business assistance and legal services. The movement of the turnover of funds of client companies can be monitored using a mobile application. Promotion is carried out through conferences and the Internet, a partnership program with banking institutions has been launched. The annual turnover is 200,000,000 rubles.
Business on mobile acquiring
Nikolay Zhmurenko spied on the idea of his own business in the USA. The essence of the American find was that the application on the smartphone was connected to a certain type of device and this system allowed making payments using a bank card.
Simply put, the phone served as a cashier. How mobile acquiring appeared in Russia. The device for "rolling" cards was ordered in the Celestial Empire. Difficulties appeared already at the start - Nikolai received a message that data from customer cards could fall into the hands of malefactors. Nikolai was advised to change the supplier and order a more expensive and protected product. The team did just that, their first clients were entrepreneurs, owners of taxis, retail stores and delivery services. Now the list of clients includes large online stores, insurance companies and even banks.
When planning to launch a startup, many aspiring entrepreneurs are faced with the problem of a lack of equity capital. And they see bank loans as the only source of resources.
However, there are other ways to fund a startup. To attract other people's funds to your project, it is not necessary to get involved with loans and pay unaffordable interest. In this article, we suggest 10 ways to find funding for a project. But it is important to understand that these are not universal schemes - certain options are suitable for different projects. And all these nuances should be clarified in advance.
Let's try to understand startup financing systems.
Standard FFF (friends, family and fools)
As Russian practice shows, this method is familiar to many entrepreneurs - those who received funds for their business from parents, friends or acquaintances. In general, investors who do not understand this topic, but want to help and invest in your project.
Getting such an investment is the easiest way, because you communicate with close people who are often uncomfortable to refuse you. But at the same time, you run the risk of ruining relationships with loved ones if the project does not meet your expectations. To be on the safe side, it is better to explain everything at once and discuss different scenarios for the development of events.
This method is popular among creative startups and social projects. Its essence lies in the fact that the project is financed by a large number of small investors who are interested in your product. In a simplified way, it sounds like "a thread to the world." As a reward for their investment, investors receive certain bonuses: a finished product, a percentage of future profits, an exclusive product, etc.
In recent years, crowdfunding in Russia has been gaining momentum. Various professional platforms are emerging that allow you to post a description of a startup and organize fundraising. Basically, social and charitable initiatives receive good returns. Creative projects are also gaining popularity - but funding is received, as a rule, by those who already have a loyal audience, fans who are ready to help in the implementation of the project.
A lot of crowdfunding sites have appeared today. Let's consider the most popular ones:
- Kickstarter. Many call it the best crowdfunding platform in the world. Its advantage lies in high attendance and a high percentage of successful projects.
- Boomstarter. The service does not have the function of paying cash dividends to investors. As a reward, the initiator of the collection offers various types of remuneration (shares). Each has its own price. The disadvantage of the platform is that if the author does not reach the target amount, then all funds are returned to investors.
- Planet. at. Another popular crowdfunding platform in Russia. The main advantage of the resource is that to receive financing and withdraw funds, it is enough to collect 50-99% of the declared amount - in this case, the commission will be 10%. And if you collect the full amount or exceed the limit, then the commission will be 5%. Plus, the entrepreneur must transfer 5% to payment systems. Another advantage of this site is the right to extend the fundraising period. This function can only be used once.
- RocketHub is a resource that allows you to attract funding for projects in different directions. The principle of operation is as follows: the collected funds, even if the limit is not reached, are sent to the user. The downside is that in case of an unsuccessful collection, the commission for withdrawing funds increases.
It is important to understand that it is almost impossible to collect serious funding at such sites.