AC Interpreting

Posts Tagged ‘Small Business Owners’

Most small business owners are likely to be severely impacted by recent commercial lender changes. In almost all cases, the business lending changes are permanent and cannot be avoided if a commercial borrower wants to continue their present banking relationship. One noteworthy exception is illustrated by a few new and more flexible commercial lending sources.

One of the biggest commercial lending changes involves new guidelines for working capital financing. Most banks appear to be quietly eliminating business lines of credit or severely reducing the amount they are willing to finance to a level which is not helpful to an average business. Very few businesses can survive without a reliable source of working capital, so this change promises to receive the highest priority from most small businesses. To replace the disappearing commercial lines of credit, the most practical options for business borrowers include working capital loans and merchant financing from one of the alternative commercial finance sources still active in small business financing programs.

Another business lender change is illustrated by the difficulty of locating investment property financing. An increasing number of banks will make commercial mortgage loans only when the commercial property is considered to be owner-occupied (which means that the commercial borrower occupies a substantial portion of the building). Commercial properties like apartment buildings and shopping centers are often owned by investors that do not occupy the property. For many banks, it appears that they are currently restricting their commercial lending activities to those which qualify for SBA loans (Small Business Administration) which generally exclude investor-owned situations.

A third significant business lending change is demonstrated by revised guidelines for refinancing commercial real estate loans. In almost all cases, commercial lenders have dramatically reduced the loan-to-value percentages that they will lend. In some areas and for specific types of businesses, many banks will no longer lend over half of the appraised value. The difficulty for a commercial borrower refinancing an existing commercial loan reach a crisis level very quickly when this happens. In many cases the original business loan was based on a much higher percentage of business value than the bank is currently willing to provide. When a current appraisal reports a decrease in value since the original loan was made, the lending problem is further compounded. This outcome is especially common in the midst of a distressed economy which leads to decreased business income that in turn often produces a lower commercial property value.

For a fourth commercial lending change example, many small business owners have already discovered an inflated fee structure from most banks for virtually all small business finance programs. Perhaps the bank perspective for some of the commercial financing fee increases is that they need to find a revenue source to replace the diminishing income from small business loans which has resulted from bank decisions to decrease commercial loan activity. Except for unusual and unavoidable circumstances, business borrowers should seek different commercial funding sources when they encounter suddenly increased business financing fees levied by their current bank.

Banks changing their overall guidelines for small business financing produce a final and widespread example of commercial lender changes. Many banks have effectively stopped making any new commercial loans to small businesses regardless of business income or creditworthiness. Unfortunately these banks are not announcing publicly that they have discontinued small business finance activities. This means that while they might accept business loan applications, they do not intend to actually finalize commercial financing in most cases. Whenever it becomes obvious that the bank has no real intentions of making a requested working capital loan or commercial mortgage, this approach has clearly frustrated and enraged business borrowers.

The five commercial lending changes described above are unfortunately the proverbial tip of the iceberg. As they approach business lenders to obtain commercial real estate financing, working capital loans and small business financing, business owners will need to be especially skeptical and diligent.

In my 24 years of being in and around sales, marketing and advertising, it surprises me how many small business owners don’t have someone working on business development. Many owners and managers I’ve met should be the “biz dev” person but just don’t have the desire or truly understand what to do. I think this comes back to a few things, fear of sales, pride, and/or social interaction. In other words they look at themselves as the President of their small business and are unwilling to go out and pound the pavement for a few hours every week. Some even use the excuse of being tooo busy, but constantly whine about how bad business is.

Many a sales person I come across is caught up in chasing after the next sale, wasting so much time during the day instead of constantly developing and cultivating a large pipeline of prospects. I see them reading the paper, surfing the internet or standing around yackin’ about the weather and recession. These actions show laziness, lack of focus, and desire or unwillingness to venture out. In other words they aren’t hungry enough. If you work around people like this, I would recommend that you step away from the pack and make a positive change.

Whether your business is online or offline, business development should be an integral part of your sales and marketing plans.

What can you do to enhance your business development skills?

Learn the art of cultivating relationships. Read books, listen to CDs and then take what you learn to polish your people skills. Develop and use personal relationship marketing (PRM) to better your relationships. Get involved in the industry, not just the companies you are looking to engage with. If you are tuned in, the opportunities might come your way. If you’re tuned out, then they’ll pass you by. When an opportunity comes your way, take action immediately. Communicate. Pick up the phone, send an email, and get the process moving in a positive direction. Learn and engage in online social media. This is up and coming so you’ll want to be all over these channels. Plan the work and work the business development plan on a weekly basis. Find a mentor to guide and counsel you. This last step is crucial and I believe will truly make a difference if you’ll find someone who is willing to help you in your endeavors. It might take a month or even up to a year to find the right person and/or persons.
The bottom line with business development is that it starts with you. So start where you are, make a plan, take action, and stay focused on a daily and weekly basis.

Many times small business owners need great ideas for publicity for the next few months. There are so many things happening in the news that a small business can use, I thought I would start writing articles to remind business owners to get out there. You have to go and stimulate publicity. You can not just hope some reporter will hear about you. You have to make them hear about you. You have to give them a reason to talk about you, AFTER they hear about you.

If you need to know how to get publicity visit http://www.wrightplacetv.com

If you want some new great ideas, continue to read.

Relationships: The Anna Nicole Situation, the Crazy Astronauts and even the Mayor of San Francisco, have relationship problems. If you are an expert in this area, this is a great time for you.

Travel: Jet Blue has had major problems from the storm. There is a new company that will pack your bags for you for a very high price. Do you have a product or service that will make travel easier, the media wants to talk to you.

Ecology: Anything Green, anything that helps the environment, anything that will change a person’s carbon foot print, even bamboo bed sheets are important to media right now.

March is Women’s History Month: Do you have information or insight on woman making history? This is the time to let the media know that you are the resource they need.

Artificial Intelligence: Google is making one, so it must be big!

Social Entrepreneurs: They are the people who do solve social problems, do good, follow their passion and create a robust business. Their solutions can
Work in many different cities and even different countries. Their impact is global, but the stories are exciting. If you are a social entrepreneur or are an expert on them, you will be a media darling!

March is also Learn Italian Month: that can be worked in with anything to do with food , style or home furnishings, just be creative!

Successful business owners are successful, in many cases, because they did not make the same mistakes their contemporaries in similar businesses made. No business can survive if it insists on making all the possible mistakes themselves. In the 21st century, based on terrible examples of mega business failures many communities, even states, have now pinned their hopes on entrepreneurs and small businesses for their security and growth.

They have seen the news stories of how other communities in other parts of the country have moved away from their focus on capturing big companies, thus putting all their eggs in one basket, and supporting small and family owned businesses. Many giant companies have failed. Others are failing every day. But, at the same time many small business owners are doing well and expect continued growth, even though it does not make news or maybe because they are flying under the radar.

In today’s business environment company owners believe that if they are doing well, even great, the best strategy is to keep it to themselves. Many successful family businesses have a person whose job is to keep them out of the news. Big publicly held companies, there aren’t that many of them really but they do burn up the airways with their news releases, trumpet their successes and are hammered by their failures – in public.

The vast majority of all companies, privately held and family owned, can check the news from these giants, take what’s working for themselves and avoid their mistakes. Think about it. If you have a great idea for starting or growing your business and you read business news stories illustrating how a company with seemingly unlimited resources failed in their attempt to do the same thing, you’d want to know it.

You might go ahead with it anyway, but you’d be better informed and less likely to make their mistakes. You’ll have plenty of your own without repeating the ones reported about in the business news. Publicly held companies are required to tell the news outlets anything and everything that might effect their credit rating or their stock prices.

Small business owners and entrepreneurs can go to school on their mistakes. Especially if they can consolidate business news reports from numerous outlets at the same time, for a wide ranging and in depth perspective. Small businesses historically do well during downtimes. Using various business news outlets and news consolidating services successful entrepreneurs do real-time research, looking for opportunities and land mines.

Startups or even businesses in the pre-startup phase can avoid mistakes that would cripple them. Existing companies can use consolidated business news reports to identify new markets, expand their company either horizontally or vertically or both to leverage their existing market position. And every company can use the experiences they see described in an RSS feed or a white paper to test their own business assumptions, before taking action rather than after they’ve lost their business, farm, or home on a sure-fire idea.

Everyone I know has RSS feeds on their computer’s start page. They select the feeds that impact them personally, politically, or from their company’s perspective. This is fabulous. Breaking news in your face as it happens. In addition we all use one or more search engines or one of the dedicated news consolidating search engines to leverage the news contained in our favorite RSS feeds.

In seconds, after seeing a news story, we can see virtually every news story locally, regionally, nationally, and internationally – any story that’s been published. Making bad decisions based on a lack of information is either stupidity or laziness or a combination. With consolidated business news on-demand new ideas for your company are just around the corner.

In making commercial finance decisions, it is becoming increasingly important for small business owners to first determine their options and in doing so it is vital to focus on effective and realistic funding choices. This is not a simple task in the face of recent chaotic conditions impacting working capital markets.

One especially difficult challenge in this process is that there has been much confusion and misinformation about the actual availability of business financing. While it is true that some commercial lenders have stopped making commercial loans or have gone out of business, the availability of commercial capital for businesses is probably better than most business owners realize.

Despite some positive news about commercial financing, there are a number of harsh realities which must be confronted by most businesses when honestly evaluating their practical alternatives for business financing in today’s challenging commercial funding climate. While unsecured lines of credit are rapidly disappearing for many businesses, some working capital financing alternatives such as business cash advances are proving to be among the most reliable funding choices currently available to small business owners.

Even for business owners who are satisfied with their current business funding arrangements, it will still be advisable to explore financing options that might be necessary if economic conditions change further. Getting more accurate information about what is realistically possible is the primary challenge which must be successfully overcome by commercial borrowers. A key ingredient in this process should include a conversation with a commercial finance expert who will not hesitate to help by providing candid advice. Because we are experiencing an unusually difficult business finance climate, ideally such a working capital funding advisor will also have experience in completing more difficult commercial financing.

I believe a disconnect exist between all the news media exposure regarding the “green movement”, “green jobs” and the actual mindset of most small business owners and entrepreneurs. It is no doubt that “green” has become one of the more reported on phenomenon over the last couple of years. The US election had strong ties to green promises and future jobs. This mantra has created general optimism. One of the most important part of starting a new business, or buying a business is the due diligence needed to evaluate the opportunity. Do you want to start a business or buy a business in the “green Industry”?- perform some due diligence beyond reading the headlines.

Please consider that small business owners and entrepreneurs are wired to think in the now, and fast, and today and ASAP. Much in the Green Industry is very policy driven, and that policy comes from federal and state levels, and that policy is wired to work within targets such as long term, next year, and eventually… To me this creates a disconnect between the small business owner/entrepreneur and the potential opportunities.

My interest in green is from somewhat a different perspective than many. My real interest in Green began back in the early 1980′s and gas prices were once again going up. The college I was attending had offered a major in Energy Management and I viewed this to be an industry with unlimited future, and I pursued and achieved my major in Energy Management. We did experiments on Solar panels, reports on Global Warming, discussed world energy policy, nuclear and many other topics I did find interesting and still do.

Upon graduating with my Energy Management major, I got employed in the energy field and acquired further education and training. My Entrepreneurial spirit got the best of me and the thought of starting and owning a business and being in direct control of my future had me in a start-up in a non-energy related business. Sold that 20 years later and here we are in the year 2010 and wonder how far this exciting field has gone in the last 25 years. It has gotten significant traction in the last years but where is it Jan. 2010? And my interest in the green movement is its inter-relation with energy efficiency. I enjoy the financial side of the green movement. Tangible monies saved as a result of energy technologies and practices utilized. I recognize the byproducts of many of these energy saving measures to be environmental benefits. If you can save a kilowatt hour (kwhr), and that kwhr doesn’t need to be produced by a coal burning power plant, you have dual benefits.

1. I am located in Florida, a state strongly hit by the depressed housing market and construction market and unemployment. I interact with owners in the solar and energy industry and people interested in solar and renewable energy. With current policy (or lack of) in Florida, the solar industry and existing business engage in the solar industry is far from healthy in my opinion (Solar is just one aspect of the various renewable energies and green products and services that comprise the market as a whole.) It appears to be a yo-yo type industry. Policy injects some money into the industry, most policy is short term, policy money is exhausted and the industry slows down. This process get repeated it seems year after year. I also know of very qualified/licensed individual that work in the solar industry part-time, because the thought is the market is not there to support a full-time business. I also attend Solar/energy advocacy meetings that attempt to show support of the industry that is full of individuals interested in entering this field, but where are the job opportunities? Many jobs fall into the contractor categories, but the current market doesn’t seem able to support existing contractors. Various consulting jobs may surface, but expertise (that not everyone may have) is needed and shrinking budgets from potential clients slow these opportunities down as well.

2. OK- so it was said that with stimulus money behind the “green movement” we would be creating lots of jobs- where are the jobs. Numbers and statistics can be “massaged” to represent various results but certainly the empirical info in Florida is not impressive.

The economic stimulus bill’s investments in clean energy have not created many green jobs yet, according to the Council of State Governments.

Only 13,000 green jobs had been created or saved by the stimulus bill through Oct. 10, 2009 according to the council’s analysis of data collected by states. Ohio led the nation with 2,500 green jobs. Rhode Island, by contrast, reported no green jobs as a result of the stimulus bill.

The top programs for green jobs were the Department of Energy’s weatherization assistance program and energy efficiency block grants, and the Environmental Protection Agency’s clean water and drinking water state revolving funds – As reported in the Washington Business journal

3. The Entrepreneur or business owner interest in the Green movement may be:

- “how much “green” can I make from this business opportunity?”

-”I feel good about being in this industry that can have positive impact on the environment”

- “Am I missing out on some significant opportunities? “

- “Can I buy an existing green business with a history of revenues and or profit?”

Conducting a search of “green or energy businesses” that are for sale that have a history of revenues and profits show very limited opportunities. Possibly the largest opportunities are for entrepreneurs to start new ventures and build them and potentially sell those successful businesses down the road. I am a fan of the energy saving part of the green movement and believe energy independence to be very sound policy for our country. I support involvement and interest in this field. But conduct proper due diligence before you proceed with your green business. The newspapers, and news broadcast say green is great, governments are sending lots of stimulus money towards the green movement, but proper research and how you approach the “green industry” in your part of your world will dictate your sustained success in this potentially large industry.