Oilfield Factoring

Many experienced oilfield workers have the dream of running their own service company. While starting a new business can be an exciting venture, it can also be very difficult. There are a wide variety of challenges that require plenty of preparation and planning ahead. That’s why Oilfield Factoring would like to provide you with the following tips for starting your own service company.

Develop Strong Client Relationships

Building strong, solid client relationships starts long before you open a business. Valuable relationships are built through trust and performance. If you have the right intentions when starting your own company, it’s important to deliver on the promises you make with high-quality results. Doing so will provide potential customers with a valuable perspective of your credibility.

Another aspect of developing strong client relationships is paperwork. Make sure you read and understand any forms a customer presents you. This includes all insurance requirements, billing processes, and payment terms. New business owners who don’t take the time to read and follow necessary requirements often find themselves trying to clean up a bookkeeping mess when they should be focused on more important aspects of their business.

Be Smart About Purchasing Equipment

In the Oilfield Industry, buying brand-new equipment isn’t always the best choice. When starting a new service business, the initial startup costs can be significant. When it comes to equipment, there is plenty of used, affordable machinery and gear available. Take the time to look online and attend auctions that are applicable to your business.

Follow The Work

The age-old real estate phrase, “location, location, location”, is just as true in the oilfield industry. Many companies expand their service areas to work with new customers. This can be advantageous for startup companies as it is a good way to prove that you are willing to do the work and get the job done. The challenge, however, is that you must have employees that are willing to be away from home for certain periods of time.

Maintain Consistent Cash Flow

It’s no secret that starting any kind of company takes money. This is especially true for new, oilfield service companies. It’s important to maintain a source of dependable financing and consistent cash flow to keep your company running, meet payroll, and pay your bills. This can be tough when you have to wait 30-90 days to receive payment from your customers. Having a dependable financial source makes managing your business easier and allows you to focus on the work at hand.

While many business owners rely on a bank for financing, this can be a daunting task as a bank often requires a formal business plan, financial projections, good credit, and valuable collateral before you are approved for a loan. This application process can be trying and lengthy and can take weeks or months before you get what you need.

Another financing option is oilfield invoice factoring. Oilfield companies that use invoice factoring received the immediate cash they need without all of the headaches. The cash you receive can then be used to meet the financial needs of your company. Once a customer pays the invoice to a factoring company like Oilfield Factoring, your business gets the remaining balance minus a small fee. Invoice factoring provides dependable cash flow you can access right away without creating any debt.

Factor Your Invoices with Oilfield Factoring

Oilfield Factoring is an invoice factoring company that serves the oilfield industry. Companies such as water haulers, rig movers, hot shots, roustabouts, welders, and more use factoring to manage their cash flow and build financial strength. For more information on how invoice factoring can help you start a new business and improve cash flow, fill out our online form or call us at 1.866.834.7338 today.