28. October 2017

The Census Bureau defines Microbusinesses a firms having one to nine (1 to 9) employees. They count them in the years ending in 2 and 7, so in our case 2012 and 2017. 

They last reported that microbusinesses are the most common kind of businesses which have employees and that in 2012 there were 3.7 million microbusinesses. 

Most microbusinesses are not startups but rather have already survived that 97.5% startup failure rate. They are in fact over 60% more than five years old. (Source: Bureau of Labor Statistics)

Microbusinesses typically account for more than 20% of the new job growth in the USA each year, therefore they account for a major shot in the economy's arm. 

The real estate, insurance and finance industries make up the largest shares of microbusinesses. And at last count made up 85 percent of these three industries.

Financing for microbusinesses can be even harder than other types of small business with even obtaining merchant processing accounts being a struggle at times. This is a major reason that microbusinesses need to pay special care to making their businesses pre-qualified, fundable, and bankable. Your industry and your size have placed you at a major disadvantage for obtaining traditional lending and the only way you have of breaking through that is to have already removed all other high risk of default factors before you apply.

The good news is that microbusinesses are providing roughly 12 million jobs in the USA and with just a little help about what it takes for them to become bankable they could provide even more. 

Build Business Credit, Business Loan Approvals, Lender Compliance Items, Pre-Qualify for Business Loans, Small Business Financing

27. October 2017

By government definition, a small business is any business that is independent (not a subsidiary or having a parent company)that has less than 500 employees. 

These "Small Businesses" account for 99.9% of all USA businesses, are currently creating 62% of new jobs, make up 48% of employees, and 41% of the payroll in the USA. 

There are 29.6 million small businesses in the USA with 80% having no employees with roughly 400,000 new businesses being formed each month and also 390,000 closing each month.

So what we have learned is that 6 out of every 10 new jobs are from small businesses, 5 out of 10 employees are, and $4 out of every $10 is being pumped into the economy by small businesses.

Source: https://www.sba.gov/sites/default/files/Whats-New-w-Small-Business-2017.pdf

The other harsh reality is that 97.5% of new small business startups are failing. This usually means their owners have risked everything; personal savings, personal credit, and gone into debt trying to create something they believe in. This is also why Banks and other traditional lenders do not get involved as the risks of default are simply too high.

This leads to the other harsh statistic that 97% of small business loan applications are being declined. Lenders are looking for all the warning signs of a high risk of default and when they find even one they decline. 

Lenders are not in business to lose money for their investors so managing the default ratios in their loan portfolios becomes the primary concern. They have no concern of helping small businesses succeed, they simple do not want to lend to those that will fail.

Therefore as a small business owner if you want to receive traditional or bank lending you first have to make your business "bankable". 

The process of making your business bankable is clearly laid out for you step-by-step inside the Fundability.com business finance and credit educational system. The system is free. If you want to move your business from the 97% who get declined and into the 3% who get approved you will first need to place your business into the 3% Low Risk of Default category which is what Fundability.com teaches you how to do.

The upside of becoming bankable is that you give your business a far better chance of success.   

Build Business Credit, Business Loan Approvals, Pre-Qualify for Business Loans, Small Business Financing

23. October 2017

And that number goes up when talking about small businesses with 10 or less employees. Small business owners have no insurance because it is their belief that there is not enough cash flow to support it and it is expensive.

First, let's review the cost of not having business insurance. No insurance means that you are putting your business at risk. Fire, flood, storm damage, theft, an accident, or a lawsuit anyone of which can wipe out your business and might do the same to your personal assets.

Fact, when it comes time to close on many types of business loans the lenders are going to require to see proof of insurance. They are usually all too happy to provide it, but it will be at double or triple the market rate. Better to get yours before they require it of you.

Many insurance companies have what they call "a business owner's policy". These policies provide basic property and accident coverage at a reasonable costs. These policies will normally satisfy your Landlord as well. You can usually lower the cost of this basic coverage by increasing the amount of your deductible. This costs you more if you need to make a claim, but can still keep you from being wiped out.

Be sure to look at what your policy covers, such as; fire, storms, casualty, theft, fraud, embezzlement, and injury claims. Floods are almost never covered under a basic business policy and normally require a rider.

The bottom line is that operating a business without having business insurance is a very bad idea and one that can damage you personally if you don't attend to it. 

Many of these policies have no deductible for liability actions with a standard starting point deductible of $250 for property damage. Again, most lenders, leasing companies, landlords, etc. will require proof of insurance before doing a deal with you.

Business Loan Approvals, Lender Compliance Items, Pre-Qualify for Business Loans, Small Business Financing

19. October 2017

As a Vendor or a Lender everything you pronounce a person or a business as "Declined" you make an enemy. If you are Home depot and a business owner applies for your Commercial Card and you decline them, well then they never want to shop at Home Depot again. You just created a Lowes customer for life. And why?

Anyone hearing declined from whatever source is offended. Declined at Wells Fargo so they will never do business there again, when it didn't have to be. But when "Declined" or "Approved" are your only two options you have left yourself only two choices, approve them and make a friend who speaks well about you to others or decline them and make an enemy who speaks badly about you to others.

Enter a third choice and that is "Not Yet". 

"We very much want to approve you but you are Not Yet where we can. To help you get there we would like you to go to Fundability.com. It is a free service that provides you with all the education, tools, and help you need for us and many others to approve you".

Now think about the mental state of those who simply hear "Declined" versus those who hear "Not Yet". How would you feel? There is a world of difference.

Vendors and Lenders are in business themselves to make a profit so they must guard against their number of defaults. That is just good business. Approving everyone has been tried over and over again and it always leads to failure. Too many defaults leads to too many losses, which leads to a business closure.

Business owners has to do their part as well. Their part is to not apply before they know they are pre-qualified. Home Depot wants to approve you. Of course they do. They don't want you as an enemy. But when you walk in unprepared for the test, then you are as much to blame for the "Declined" as they are and maybe even more.

The solution to both sides of this is to remove "Declined" from the equation. If as a business owner you go to Fundability.com first, before you apply, then you will know with whom you are pre-qualified. And if you are a Vendor or a Lender who says "Not Yet" and sends that business owner to Fundability.com then you have empowered their success rather than damaging it.

Solutions to problems are usually found if only we take the time to look.

Business Loan Approvals, Pre-Qualify for Business Loans, Small Business Financing, Vendor Credit Lines

15. October 2017

A difficult task for any business is conducting market research. This research can impact a business in many ways including how you brand your products and who you market to. Although market research can aide a lot with your businesses marketing efforts, it also plays a key role when your business is attempting to obtain financing. 

The lenders or investors main objective when evaluating your business is to determine whether or not they will get their money back. Good market research will help set your potential lenders mind at ease, and you will be more apt to obtain the business capital you need. The lender also wants to know things about the market such as the competition and the demand for your product or services. 

To begin the process of researching your market you can start by searching trade associations, trade show websites, and trade magazines. They exist in nearly every industry and can supply a wealth of information related to your market. The best part is that many of the trade related websites provide the information free of charge. The government also provides a number of valuable resources for market research. For example, the Economic Census, released every five years from the U.S. Census Bureau, provides an excellent glimpse at industrial activity including the Industry Series report that offers separate reports for many industries and shows the number of businesses within an industry, sales volume, number of employees, and more. Other good resources for market researching are corporate websites of your competition and press releases from your competition. White papers provide good market research data because they are well-researched documents. 

Magazines and Newspapers are another inexpensive resource for market research. As part of their research for articles journalists often gain access to expensive market research reports which may be mentioned in an article. Additionally, expert sites such as Google Answers provide value in offering direction to someone who seeks information. They don't provide the hard numbers you may be looking for, but you may find the expert opinions useful when putting together your market research. Finally, another inexpensive resource for obtaining market data can be found at Academic Research Centers. 

Market research companies and investment houses are expensive alternatives to market research. The information found with a market research company is generally well researched and contains extensive product/industry metrics and statistics, including forecasts and trend analysis. It is not uncommon to pay well into the thousands of dollars for a report that is only a hundred or so pages long. Since money is typically tight for a business starting out, it's best to go after your market research using the methods above for gathering free and inexpensive research data. 

Although market research is extremely important to your business plan and your business capital search, it is only one piece of the puzzle. Before a lender even looks at your market research they will look at things such as your business management team's experience, your past business successes, and your "lending character " or your ability to repay a loan. It is vital that you not only have a good business plan, but you also need a good business financing plan as well. 

Business Loan Approvals, Pre-Qualify for Business Loans, Small Business Financing