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08 Apr
10 Tips for Running a Successful Small Business…

10 Tips for Running a Successful Small Business…

1Keep Score: It’s amazing how few small businesses have any idea of the daily, weekly, and monthly numbers and financial trends in the organization. Spend time getting to know your business inside and out.

2. Set Realistic Goals: Goal setting is an essential part of business success. Set obtainable goals and when reached set the bar a little higher for the next one.

3. Use Marketing Wisely: It’s easy to waste money on ineffective marketing. Learn how to use your marketing dollar and resources to improve your small business.

4. Excel At Your Business Presentations: A powerful business presentation can help improve your small business.  Be relatable but knowledgeable whenever presenting your businesses persona.

5. Monitor Trends in Business: No business operates in a vacuum. Stay current on events and issues that relate to your business.

6. Sharpen Selling Skills: No matter what you’re selling don’t forget to focus on sales improvement.

7. Find  Your Niche: Every industry has its own way of doing things that work best for them. Don’t re-invent the wheel.  If it’s working use it!

8. Motivate Your Staff: Motivated staff members can bring huge improvements in business. Learn what motivates people and capitalize on it.

9. Know Your Limits: Every successful business owner has a  pretty clear idea of their limitations. Knowing your own  business personality can help you manage your resources and find help in areas of weakness.

10. Take a Break: Running a small business is hard work. Sometimes the best way to improve your business and recapture your passion is to take time away from the office.

01 Apr
Got a Gripe About Red Tape? There’s an Ombudsman for That. How the SBA’s point man handles owners’ gripes about red tape

Here’s a great article recently published in the Wall Street Journal…

By:  Rhonda Colvin

Roughly one in 10 small-business owners say government regulation is their biggest challenge. Brian Castro says he feels their pain.

The 41-year-old Washington, D.C., lawyer is currently the U.S. Small Business Administration’s national ombudsman, a little-known post that requires him to act as a liaison between small businesses and federal agencies when it comes to regulations.

When a small business believes an agency has hit it unfairly with a penalty or fine, the business can submit a complaint online at the SBA ombudsman’s website, or send one in by mail.

Mr. Castro’s office will then get in touch with the agency, requesting that it lower, or eliminate, the fine. The ombudsman’s office of seven staffers handled roughly 350 complaints from small-business owners in the 2013 fiscal year ending September 30, up 40% from about 250 in fiscal 2012.

Small businesses with fewer than 20 employees in 2010 paid nearly $10,600 per employee to comply with regulations, roughly 36% more per employee than did large businesses with more than 500 employees did, the latest available data from the SBA shows.

According to a January survey of 603 small business owners by Wells Fargo/Gallup, 11% listed government regulation as a top concern, while another 11% listed the economy. In comparison, 21% said their biggest worry was attracting customers.

One of Mr. Castro’s duties is to keep tabs on how quickly the various agencies respond to complaints as well as the “quality” of their responses.

Consider U.S. Homeland Security, a recent underperformer. Both its U.S. Customs and Border Protection division, as well as its Citizenship and Immigration Services division, received “Fs” because they failed to respond within 120 days to eight total complaints that small businesses made about them during 2012.

“CBP works to answer all inquiries from multiple entities in a timely manner and is coordinating closely with the Office of the National Ombudsman to review and improve the response process,” said a spokesman for the Customs and Border Protection office.

In an interview at his office Tuesday, Mr. Castro provided an insight into the regulatory hassles that small businesses grapple with today:

WSJ: What are small business owners’ top three complaints?

Mr. Castro: The top one has to do with the Centers for Medicare & Medicaid Services audits of durable medical equipment prosthetic and orthopedic suppliers. These firms have contracted with Medicare to provide those products. We have received hundreds of complaints and comments both from individual device providers and from associations representing many, many more.

The issue in a nutshell is an ongoing practice of what are called “recovery audit contractors.” These are third parties, non-governmental, for-profit entities that come in for the purpose of finding ways of fraud and abuse. The impact has been extremely severe for many of these small businesses, to the point of driving them to the verge of going out of business, or out of business altogether. We’re developing some proposals [to address their concerns], working with my counterpart over at CMS.

We also do receive concerns about visas, such as whether a H1-B visa was approved or re-approved or not, or a visa for seasonal help, particularly for agricultural small businesses.

For government contractors, late payments are a very significant worry. Small-business owners understand the liquidity crunch that can come from a slow paying client — and the last thing we want is the federal government to be one of those, particularly during our economic recovery.

WSJ: How do you figure out whether to give an agency an A, B, C or an F?

Mr. Castro: It’s a cut and dry, objective metric, based on the number of days it takes before we get a response. So it could be that there was turnover in the office perhaps, in that office and for whatever reason, the matter did not get addressed. Some agencies have declined to participate in this resolution process. I’m learning more about that, but the legal basis is unclear. One example is the Department of Defense. That agency hasn’t viewed the Small Business Regulatory Enforcement Fairness Act as extending to it.

WSJ: Is your office preparing to address concerns related to the new health-care law?

Mr. Castro: I have not seen any comments filed about the Affordable Care Act regulations yet. Before the ACA, small businesses paid 18%, almost one-fifth more, for health-insurance premiums for their employees than did large businesses. They faced far fewer choices and of course exclusions on pre-exiting conditions. So the small-business owners that I’ve talked to are concerned about getting those issues rectified, and want to have the benefits for their business. They want a workforce that is healthy, happy and productive and reliable. Health care is critical to that.

WSJ: Do you have personal connections to small businesses?

Mr. Castro: When my grandfather immigrated to New York [from Spain], he opened a diner. It was something he undertook so his family could have a better future.

 

25 Mar
Recourse Factoring Vs. Non Recourse Factoring…. Which is right for you?

Recourse Factoring Vs. Non Recourse Factoring…. Which is right for you?

Businesses that have a recourse factoring agreement are responsible for buying back invoices that are not paid by the account debtor (the company that owes the money) after a specified period of time, usually 60, 90 or even 120 days.  It means even though the factoring company has purchased the invoice and advanced on it, they still have “recourse” at some point.

Most factoring companies provide credit checks through various credit agencies to help minimize the charge-backs (recourse) and to help businesses make good credit decisions.  These credit checks can be done on current accounts or on new accounts they hope to have business with in the future.  Recourse factoring offers the factor the least amount of risk and discount fees are generally lower making it a more affordable option for a business seeking to factor.

For non-recourse agreements, the factor assumes the risk of non-payment by the account debtor, regardless of the reason.  Non-recourse factoring keeps the business from assuming bad debt but is riskier for the factor.  Discount fees are considerably higher than for recourse factoring.  In some cases, if a business has a concentration of invoices with just a few large customers, non-recourse factoring may protect the business from potentially large offsets.

So when deciding on which type of factoring is best for your company, evaluate your customers, your cash flow needs and just what expense your company can afford.

18 Mar
The Importance of Small Business to the Economy….

The Importance of Small Business to the Economy…

A small business is considered to be a company that employs less than 500 people and more often ranges from 50-100.  U.S. small business makes up over half of the country’s workforce. While many people think big corporations and industrial giants are what drive the economy, small business is actually the workhorse.

Small business in America has been the stabilizing force in the economy for years. Entrepreneurs are the cornerstone of creativity and production. Small business is what stimulates economic growth and keeps our economy moving. Over 60% of all private sector jobs come from a small business making small business critical to the U.S. economy.

Some interesting facts about small business include:

  • There are 28 million small businesses in the U.S.
  • 70% of small businesses are owned and operated by a single person
  • Small companies hold over ten times more patents in the United States than their larger counterparts
  • 1/3 of small businesses rely on credit for financing
  • 60% – 80% of all new jobs come from small business

The Small Business Association “SBA”, a government agency watches out for small businesses in America by helping them to stay in business. They offer education and training when needed, and assist small business owners with finding alternative funding sources. The SBA tracks data and statistics about various small businesses and reports this information to the United States government.

So the next time you think small business is too small to matter think again….

 

 

 

 

 

11 Mar
Factoring… A look back

Factoring… A look back

Ever wonder how or why factoring or accounts receivable financing came to be?  Oddly enough it goes much farther back than you might think.

Factoring dates back to the financing of trade, particularly international  trade.  It is said factoring originated in the far- east  and China,  particularly in the spice trade.  The ancient Romans also used factoring, selling promissory notes at a discount.  Though factoring in its purest form may have been used by these two cultures, it was a not terribly commonly .

Factoring gained popularity around the time of the American Revolution when colonial merchants sent raw materials like cotton, fur and timber to British and European merchants. Because of the great distance across the Atlantic Ocean, waiting for payment from Great Britain and Europe caused delays in processing orders.  As a solution, the merchants paid the colonists in advance in order to have the means to process new orders.  This form of factoring provided cash flow for the colonists and allowed them to ensure that trade was uninterrupted.

As the business world progressed so did factoring.  The focus of factoring shifted to the importance of credit during the Industrial Revolution taking into consideration the customer’s credit worthiness.  Businesses could now use the amounts owed them as instruments of payment based on their credit worthy, established customers.

During the 1930’s factoring grew considerably among the garment and textile industries which relied on raw materials.  Factoring was commonly used to ensure that companies were able to purchase these materials to produce clothing and textiles without delays.

Today, factoring is a respected alternative to traditional financing.  Many businesses large and small sell their accounts receivable to obtain much needed working capital.  Nearly any business with credit worthy customers can take advantage of factoring as a steady source of cash flow for daily operating expenses, to purchase new equipment or growth.

04 Mar
Factoring 1…2…3…

Factoring 1…2…3…

Having transitioned into the new year,  2014 will undoubtedly bring many challenges for small business owners.  One of these challenges is finding the right sources of capital to fund their business.  A key to running any business is to always know where you are financially.  All too often company finances go overlooked until too late.  Don’t wait to the last minute to find the right financing tool.

There is an abundance of financing options for small businesses, factoring being one that is making a resurgence.  Factoring companies can vary dramatically in what they offer so make sure to know the facts before you commit.

When looking for a factoring relationship remember the “Who, What and When”.

Who is the best factoring company for my business:

 Look for the number of years a factoring company has been in business.  Factoring companies with more than 10 years in the business generally offer a good program.  Companies with 20 plus years are doing something right and it indicates they likely have a very solid reputation.  Look for a factoring company with a tenured management team and sales force.  Get to know the people you will be working with because it DOES make a difference.  Relationships are key, especially when dealing with what can be stressful financial matters.

What factoring program is right for my business:

 Most factoring companies have similar programs but it’s how they work with the business owner that matters.   Many factoring companies have industry expertise in areas such as trucking, medical and staffing that could be beneficial for the business owner.  When selecting a factoring partner focus on companies familiar with what you do.

When should you work with a factoring company:

 If slow cash flow is preventing you from meeting you obligations on time it may be time to factor.  Most companies experience slow paying customers from time-to-time but if it has become the norm,  factoring could be the answer.  Factoring is usually a short-term resolution for businesses, anywhere from one year to eighteen months.  Most businesses usually become eligible for more traditional financing after they have been a factoring customer.

 

 

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