A True Business Credit Card by Ilya Bodner
November 30, 2009
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Finding out what customers want, and then setting out to meet their needs, provided it can be done at a profit, is what helps prevail in the marketplace. Demonstrating to customers how a product or service can satisfy their wants and desires will strengthen the holding glue between the customer and your business. The wise business owner is always aware of customer wants. Many businesses make the mistake of assuming that a customer’s number one priority is low price. But before price even becomes a factor, the customer wants other things. The customer is looking for ways to improve their quality of life, their productivity, to become more profitable, or to increase their competitive advantage. Meeting one or all of these fundamental wants will add value and move the customer forward. Getting what the customer wants does not necessarily mean going out and changing your product or service. In most cases, adding value is about the delivery, the way the facts are presented and carried out.
THE EVER-CHANGING MARKET
Research from Harvard University highlights the fact that customers' needs are changing faster today than ever before. This definitely impacts small business expansion. Constant adjustment in supply must be made in order to meet the demand of the times. A small business owner should always be seeking out new opportunities in the marketplace and preparing for small business expansion. The adjustment does not always mean changing existing practices. Has your small business reached out to a new demographic lately? Many small businesses are discovering that by reaching out to new markets, they are able to expand their business to new horizons. When Tiffani Kim noticed the customers of her spa bringing in their husbands and boyfriends, she started reaching out to the male market, which now constitutes 30% of her small business. Kim T. Gordon of Entrepreneur Magazine stresses not to forget minority markets, such as the growing Latino market. “The Latino market is an entrepreneur's dream,” she claims. “With economic clout expected to reach a whopping $926 billion by the end of 2007, the Latino market's buying power will soon outstrip that of all other ethnic groups in the United States.” One market that many small business owners ignore is the public sector. The federal government, local and municipal governments, colleges and universities, school districts, nonprofit organizations and public utilities are great opportunities for small businesses. The federal government’s civilian agencies alone buy a range of products in more than 4,000 different categories. Furthermore, small businesses often have an edge in competing for procurement dollars because of government regulation designed to promote fair competition. The public sector is often required to give a certain amount of business to small, women- and minority-owned businesses. The marketplace is a treasure hunt. The small business owner should constantly be searching for creative ways to reach out to new markets and customers.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
Small Business Owner
Initial Underwriting Group
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November 16, 2009
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Who is willing to dedicate the time and hard work necessary to properly market your small business to the right people? There are countless books, websites and newsletters readily available with small business marketing advice. It is one of the most well documented parts of operating a small business, simply because it is one of the most important parts. If you're willing to do the work yourself, you’ll need to do copious amounts of research and sort out the good advice from the bad, which isn’t always easy. The burdens of operating a business can leave you with little time to do all of this additional work.
Consider the possibility that you may be better off having a small business partner who is experienced in sales or marketing, or if your budget allows, hiring a professional to handle the marketing aspects of your business. Not even the best idea will find success if it is poorly marketed or not marketed at all. Moreover, if you don't sell your product, someone else will.
EXPANDING YOUR BUSINESS
When deciding to expand a business, there are a few key things to consider: time, cost and profitability. How long will it take to put in place the actions that will allow the expansion to be successful? How much will the expansion cost? Is the amount needed currently in the budget, or will it need to be borrowed? Will more staffing/resources be needed, and if so, at what cost?
If considering more than one method of expansion, the most important consideration to weigh is long-term profitability. Weigh the pros and cons of each method to decide on the most effective route.
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November 11, 2009
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What exactly is an entrepreneur and how does it relate to small business expansion? There are many differing views on what makes someone worthy of this title.
Investorwords defines entrepreneur as “an individual who starts his/her own business.” In a general sense, the word applies to any person starting a new project or trying a new opportunity. However, this definition leaves out other essential characteristics of an entrepreneur.
Merriam-Webster Online defines entrepreneur as "one who organizes, manages, and assumes the risks of a business or enterprise.” This definition is definitely richer, but still lacks the sense of innovation and creativity that defines a true entrepreneur.
Dozens of definitions exist, but none are comprehensive. Entrepreneurship involves uncovering an opportunity to create value, transforming knowledge into new products, and bringing them to the market. It is an entrepreneurial mindset that will make the difference in small business expansion. Success in entrepreneurship requires not only knowledge, but an acquired skill in the process of creating something new. Starting with practically nothing, an entrepreneur is one who organizes a new venture, manages it, and also assumes the associated risk.
“an innovator of business enterprise who recognizes opportunities and is not afraid to act.”
- StrongBusinessCredit defines entrepreneur
Being an entrepreneur is about having a certain mindset, tendencies, and personality traits such as team building skills, persistence, selling skills and a very low tolerance for mediocrity. An entrepreneur won’t flinch while accepting financial risk and undertakes new ventures with a positive attitude. Entrepreneurs are spontaneous, creative, eager for continued learning, and willing to make difficult decisions in the absence of solid data.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
Small Business Owner
Initial Underwriting Group
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October 27, 2009
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While the term “billable hours” is most commonly associated with law professions, this concept should be used by all business owners. It’s important to set the minimal hourly rate you want to earn as a bottom line.
How much should you earn per hour (or day, week, month) as a business owner? Many books on time management recommend the practice of thinking of each hour of your time as being worth a specific quantity of money: the time is money concept. First, figure out what your hourly rate is, and if you want to earn more money, then you must mentally raise your hourly rate, so you can start concentrating on activities that are worth more. For example, if you currently earn $50/hour and want to earn $75/hour, then you have to do less $50/hour work as you shift to doing $75/hour work. This gives you a clear idea of what your time is worth and can help you focus your efforts.
$500/hr is the breakeven point to make “$1mil” per year
Thinking in terms of an hourly rate will definitely help limit your downside as a business owner. However, be careful not to limit your upside. Of course, it would be foolish to miss out on a $1,000/hour opportunity simply because it doesn’t match your billable hourly rate. The key is to set a minimum hourly rate and not go below that rate. But be sure not to miss a truly lucrative opportunity to go above your minimum rate. Those kinds of opportunities may only come along so often.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
Small Business Owner
Initial Underwriting Group
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September 28, 2009
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Many people associate working long hours with working hard. As a business owner, you might pat yourself on the back after a long, hard day at work. But business owners should focus on working smart versus working long hours. Hard work has a new definition in our lives today.
“Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.”
- Seth Godin, Labor Day of 2007 (Mr. Godin is still at work)
What does it mean to “work smart”? According to Harvard Business School, working smart means simply, “getting the same results in less time.” To do that, the business owner must change how they work. Changing speed and increasing focus and organization are crucial to working smart. Don’t waste time simply feeling productive. You might feel like you are being productive, for example, by emailing 100 potential clients; but if those emails don’t show the desired results, then you are wasting your time and aren’t working smart. Filling your time with busy work doesn’t mean you are being productive either.
Concentrate on higher-output work. What activity or activities do you perform during your work days that bring the most rewards or results? Once you focus your efforts on these high-output activities, you can spend less time working and still increase productivity. Streamlining activities will cut your working hours and allow you to concentrate on increasing productivity and working smart. Concentrate on constantly making your business processes more efficient and cutting processes that aren’t producing results.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
Small Business Owner
Initial Underwriting Group
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September 17, 2009
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It’s important to remember that all businesses have downtime. There are periods when business is slow no matter how much you advertise. Your business may be operating seasonally, such as concession stands at sporting events or neighborhood ice cream trucks. It may also indirectly operate seasonally, by manufacturing a product that is only bought and used during a particular time of the year. For example, building materials may not be in high demand during winter, or antifreeze during summer. And still, there are times when even businesses that are viable year-round slow their pace. It is essential to plan for downtime, predicted or not, so that your company can survive financially while preparing for good business when it comes again.
Use the downtime to reorganize the business, clean up (either figuratively or physically,) and generally, get things in order. Jacqueline Edwards, Business Development Specialist for BusinessPipeline.com suggests several ways to tune up a business during downtime. These include checking annual goals, finding ways to cut costs, updating databases, refining marketing and business development strategies and rejuvenating yourself by taking a vacation or simply relaxing.
If your business is truly seasonal, however, and shuts down for planned downtime, there are things you can do to help ensure your business will be ready to go again when the season is right. Use the downtime to plan the next year's cash flow, find better financing and readjust the level of employment you need for your business. Marketing, even during downtime, can make sure your business is successful when you start up again. For example, billboards or other advertisements that better help people associate a certain season or time period with your business, can help ensure that customers are waiting for you (even literally) when you open your doors again.
At StrongBusinessCredit, we remind our clients that the true entrepreneur finds benefits in the slow season and works with business mentors and other professionals to prepare for the busy season.
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Small Business Owner
Initial Underwriting Group
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September 1, 2009
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Your small business is bound to yield fruit when you keep long-term goals in mind during daily operations. In this chapter, you will find tips that will help your company function with optimal impact and align the moment-to-moment operations with the overall vision and goals you’ve set forth in previous chapters. Constant examination of each department that has an integral role in the effectiveness of the business should be monitored for its contribution to the "bottom line."
COMPETITIVE ADVANTAGE
Developing a strategic asset, similar to a trademark or brand name, creates a competitive advantage over other companies, which raises barriers to entry in your marketplace. If there were no barriers, competitors could walk in and take over. No one would have a competitive advantage over another. All would be equal, with regular, dull profit margins.
“In business, I look for economic castles protected by unbreachable ‘moats.’”
—Warren Buffett, Berkshire Hathaway Annual Report (1995)
In order to achieve and maintain a competitive advantage over your rivals for any invention, service or product, it is wise to develop some line of defense. Just as in sports, a team must have a defensive plan against the competition. If it is a strong line of defense, your opponents will eventually give up. The more competitive the market is, the more barriers are recommended to maintain a competitive advantage. It is worth the effort, as rewards are high.
With a trademark in effect, as a strategic asset, that product becomes recognized over others in the industry, and will hold against strong competition, sustaining prices and profit margins. Another strategic asset is establishing a brand name. This deters competitive companies in the beginning stages. Brand names take more time to establish.
A company definitely would command a stronger presence with more barriers, such as a patent or copyright, and would lead the pricing in their industry. The more strategic assets a company attains, the more successful that company will be.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
Small Business Owner
Initial Underwriting Group
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August 21, 2009
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Strategic Alliances are a strategy for getting what you need for your small business without necessarily incurring further debt. This happens when two or more companies form an alliance while retaining their own identity; in certain cases, a separate legal entity or “joint venture” can be formed to accomplish the same purpose. Each company agrees to commit resources for common business objectives.
Through strategic alliance, the joint venture can penetrate the markets it chooses without a loan. Sometimes referred to as a reverse-loan, a strategic alliance helps two or more companies’ revenues share on a mutual or multi-component product and/or service.
For example, StrongBusinessCredit takes advantage of and benefits from such alliances. Perhaps the most valuable alliance for SBC has been with Initial Underwriting Group (IUG), who’s enhanced our ability to reach out to more lenders. Prior to IUG, StrongBusinessCredit was considerably limited with its brokers and lenders. With IUG, we have been able to broker out to more lenders and larger networks.
This strategic alliance has opened doors for our clients. Previously, StrongBusinessCredit had three account types which it could service: scratch startup (SSU), overextended startup (OSU), and business credit only (BCO) businesses. That meant that if you are already in business we could not help our clients to our satisfaction due to the focus on business credit building only. With a strategic alliance with IUG, we have been able to extend our expertise advice to two more account types. Now, no matter what stage business owners find themselves at, IUG and StrongBusinessCredit are now able to accommodate. The power of a strong strategic alliance can’t be denied.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
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Initial Underwriting Group
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August 12, 2009
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A broker is defined as anyone who makes securities transactions for others. (The exception to this is a bank.) A dealer is defined as someone who buys and sells securities for their own account, through a broker or otherwise.
Most entrepreneurs are looking for start-up capital and for someone else to raise capital for them on a straight commission, with no up-front fees. Only registered broker dealers, and Bona Fide employees, can legally solicit/sell securities for a company on straight commission, with no up-front fees. They always charge an up-front retainer, sometimes called due-diligence fees, before commencing. This fluctuates depending on the complexity of the transactions. Most brokers/dealers avoid startup and early stage companies. A Bona Fide employee cannot be paid commission from the sale of securities.
A statistical report which gathered data from electronic filings by registered investment advisers with the Securities and Exchange Commission (SEC) as of April 7, 2006, showed more than 75% of clients are hedge funds, dealing with 1,336 hedge fund firms, an increase from 1,092 firms previously registered. This leaves little room for the small businesses. Total assets managed (AUM) by SEC registered investment advisers totaled $31.4 trillion, increased by 17.2% over 2005.
PRIVATE LENDERS & VENTURE CAPITAL
Although we have touched on this topic in Chapter 6, Venture Capitalists are worth a second glance in the context of alternative financing. Venture capitalists are private loan lenders that have relatively high standards for loaning money to small businesses.
Generally, venture capitalists shy away from start-up businesses in most industries, unless the owner has a history of success. They tend to be private loan lenders that focus on small business financing for high-tech companies. They expect a company they fund to have experienced and diverse management that will drive a fast-paced growth model. Venture capitalists expect a very high return on their investment. For these reasons, venture capitalists, like “angel investors,” are only a reality for the most well-planned business owners.
http://www.24-7pressrelease.com/press-release/no-loans-when-you-need-them-96395.php Ilya Bodner
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Initial Underwriting Group
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August 10, 2009
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A great way to get in the door with some alternative financing institutions is to take out secured cards. The concept is the same as any other secured credit card. A secured credit card requires a specific amount down, securing liquidity, in exchange for a revolving line of credit. Spending is treated just like any other business credit card. The initial deposit made on the account is not used to pay the balance unless defaulted on the payments. The payment is tracked and, after longevity of the account, other lending options become a possibility.
Secured credit cards are not a form of alternative financing but are included in this chapter to remind the small business owner that long-term planning is needed to keep financing options open.
PEER-TO-PEER LENDING
Peer-to-Peer Small Business Lending is a system used to connect a private lender and small business owner. The borrower posts the details of the business loan he or she is requesting at sites like prosper.com and our own site at www.strongbusinesscredit.com. Emerging sites like these give business owners the ability to customize their own loan options including the amount, term, and maximum preferred interest rate. Private loan lenders have the option to bid on the small business loan, and the best offer(s) will be accepted. The key to handling the risk factor is in the social aspect underlying this type of lending. The borrower’s payment habits are made public information on networking sites, available to one’s peers. This encourages the borrower to honor their obligation and can be damaging to their business image and brand if they do not.
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