According to a recent article in Forbes Advisor, one in five new businesses fail within the first year and about 50% fail by year five. Another sad but interesting fact from this article is that the second most common reason new businesses fail is running out of capital.

Financial Challenges for Texas Startups

Even more interesting facts from 2022 are revealed in the above-referenced Forbes article. Here are some that may hit home with new startups:

• Professional, scientific and technical services industry has the highest failure rate in the first year.
• Labor remains the number one cost for businesses at 70% of spending.
• Inventory is the second biggest cost for small businesses.
• The average salary of a small business owner is just 3% above the annual mean wage in the U.S.

While statistics do not tell the entire story, they do tell a story, and the main one here seems to be about finances. Namely, that maintaining a strong cash flow is essential to keeping a new startup on its feet.

Many businesses operate on a low margin, especially starting out, and any delay in getting your invoices paid can be problematic. While you wait for your clients to pay what they owe on 30-day, 60-day or even 90-day invoices, your business expenses keep coming. Things like:

• Payroll
• Inventory/materials
• Utilities
• Taxes
• Fuel
• Debt service

Maintain a Steady Cashflow with Non-Recourse Factoring

Non-recourse factoring from JOBE Services, Inc. offers a solution for startup businesses to maintain the steady cashflow they need to operate without incurring debt or risks to their credit. With factoring, we buy your outstanding invoices for cash you can use now and collect your payment from your creditors. There is only one small fee, no long-term contracts and no hidden charges.

Plus, our non-recourse factoring poses no risk to you – if after we approve and buy your invoice, your creditor does not pay, you still owe us nothing. We do not pull your credit and factoring is not a loan. It is a simple financial tool to help startups and other businesses get cash from outstanding invoices when they need it.

Use our factoring services once, occasionally as needed or as part of your monthly accounts receivable. The choice is yours. Contact us at JOBE Services, Inc. in Humble, TX to learn more.