21. November 2017

In the hundreds of thousands of business owners that we have come in contact with over the years we have found certain traits common to the most successful ones. Those traits are:

1. Be Present
So many times as entrepreneurs our minds are going a million miles a minute which tends to make us not present in many circumstances. Business associates are giving you their ideas, yet you are formulating what to say and where the conversation will go next. We tend to do the same thing with co-workers, employees, family, and friends. So excited to get what we have out there that we are not present for what they are talking about or what their needs are. Be present.

2. Hardest Worker
There can be no doubt that you are the hardest worker in the firm, burning the candle at both ends. People don’t follow slackers, they follow by example. It get easier to demand that extra level of commitment when they see that you are already giving it. Set the example that you wish for those you lead to follow.

3. Is 150% Possible
Is it possible for you to be all in and completely passionate about your business. Is anything beyond giving it your 100% best effort even possible? If you want to attract serious business relationships and possibly investors to your cause then they need to sense and see your passion for what you are building.

4. Your Mouth Says, But Your Body ...
We all have seen this one. The mouth is saying one thing but the body language is screaming something completely different. “I am so excited to talk to you” (I wish he would hurry up so I can go). Most people can read body language much better than they think they can and they pick up on the sense that our mouth is no being honest with them. In all your business relationships make sure that your mouth is aligned to what your body is saying.

5. Glass Is Half Full
If you are not a glass is half full type of person, if that is not your normally everyday state of mind, then you have no business being an entrepreneur. Attitude is contagious and you will find that you only attract the glass is half empty people who are always right when something fails. “See I told you so”. It is easy to predict failure when you already made up your mind to be on the losing team. One trait that every successful entrepreneur has is a glass is half for attitude. That positive attitude attracts others with the “we can do this” winning perspective.

6. Love What You Do
This one is so very easy, if you done love what you do then no one else will either. Way too many small business owners create jobs for themselves and view that job like a noose around their necks. Just someplace they have to go and something they half to do to keep food on the table. You would have way less stress just taking the actual job and dumping all the extra business owner headaches. Success in business starts with loving what you do and having a passion to succeed at it.

7. Listen and Be Open 
Sometimes trying to give advice to an entrepreneur and having them listen to it is like talking to a wall. Part of being a successful business owner is that “A” type leader personality. It is having the belief in yourself and your abilities to succeed. But even the best sports player realizes very early that they need the advice and experience of their coaches to get the best out of themselves. So seek out advice and criticism and be open to listening and applying it. You just be surprised how many talented people there are out there who really know what they are doing and that you can learn from.

8. Test and Plan Everything
Even the best researched plans need to be tested. Whatever your product or service is it can stand to be tested to see how it can be optimized, made more efficient, be more cost effective, or have more market appeal. The only way to find that out is to test different things and analyze the outcome. A/B testing is often very effective. “A” draws, “B” does not. “A” costs us less, but “B” out sells. The better you plan and test the more profitable your business will become.

9. Time Out
Take time out so you don’t burn out. As the leader of your business you too need time to recharge your batteries. Sometimes taking a break and getting away from the business for a while can bring renewed clarity or whole new problem solving. There is such a thing as being so close to an issue or problem that you can’t see the forest for all the trees.

Business Planning, Business Startups, Entrepreneurship

17. November 2017

Don't you hate how clever these scammers are? Do you wonder what they could do if they spent their energy doing something real rather than ripping people off? Life is short and this is how they choose to spend their days? What jerks! Well, let's look at a few of the most common.

1 – Shipping To You Now or Your Invoice
Emailed to you typically from a recognized brand name with a slight twist such as amazon.somethingservices.net where amazon is in there somewhere but only as a sub-domain or folder name. The scammer sent out hundreds of thousands of these that look real because they had your name, your business name, your email, maybe even your address and phone. The scammers want you to click on something to either install malware on your computer or to send you to a phishing site to collect your payment info. Usually it is for something small like $19.95 so that many people will simply completed the form.

2 – Your Domain Is Expiring
These scammers send out millions of emails to domain owners requesting payment for expiring domains when they have nothing to do with your domain provider or your domain hosting service and your domain is not even expiring (although many times it is). They get you to enter your credit card or your banking info to make the payment and it all looks very legit, but it is anything but. The scammers then have the info they need to sell your data all over the dark web and really cause you a lot of headaches. These scammers we also simply use the links to install malware in an attempt take control of your computer and learn all your user ID and Passwords to any sites you enter after the malware install is successful.

3 – Hold Your Data Hostage
Ransomware has become very popular in 2017. These scammers use malware and other hacking techniques to gain access to your valuable business data. You then get messages demanding payment to remove their control or they will wipe out your data. You pay and in most cases they do give you back control, but now you have to find out how they got in, if they left a back door to do it again, and very often all your data is for sale to anyone else who wants to pay for it.

4 – FBI and IRS Calls That Aren’t
You answer the phone and the recording says “This is the IRS calling. We are about to take action against you for back taxes. To avoid further action call this number today.” Or “this is the FBI calling. An arrest warrant has been issued for your address. To avoid being arrested call this number today.” News flash. Neither the IRS or the FBI ever call you give you a heads up and neither will leave a number you can call to make a payment so it will all go away. These are also being emailed and even sent via text message. Again that will never happen from the real IRS or FBI. They do not text you and they do not hire call centers in India to do their collections.

5 – You Have Won! Click Here ...
These scams come in emails and text messages. You have won a free AirBNB, a free flight, a free rental car, etc. All you have to do is reply “Yes” or click the “Yes” button. Then you spend months unwinding the fact that they have your passwords, your banking info, or your credit cards. The reality is if “YOU WON” and it is from someone or something you know nothing about then block it but do not reply or click on it.

Be smart and don’t fall for the tricks of these and other scams. Set up your emails to catch spam. Report it as spam if it gets through. Block unknown numbers. Use your phone service “scam likely” tagging systems to alert you before you answer. And never reply to unknown text message senders.

Avoiding Small Business Scams

12. November 2017

Let’s compare business credit to personal credit and see what we know about both.

Scoring Systems
Both business and personal credit have a scoring system. In personal credit it ranges from 350 to 850 and with business credit it ranges from 0 to 100. What is common to both is that if you have 700 or higher personal credit scores lenders and offers will fill up your mail box and if you have 70 or higher business credit your mail box will be just as full.

Types of Credit
To achieve 700 or better personal scores you are going to need a mortgage, some installment accounts, and a few credit cards. One mortgage, 2 or 3 installments (cars, furniture, appliances) and 4 to 7 credit cards. The optimal is about 10 reporting trade lines all showing that you have paid perfectly for at least two years. Business credit is no different in that you are going to need at least 10 reporting trade lines to establish and build string business credit scores and to demonstrate to future lenders that your business has a history of on time payments. The 10 reporting trade lines can be bank or credit union term loans, business credit cards, store business cards, vehicle or equipment financing or leasing, or vendor lines of credit. You just need 10 and those ten must report every month.

Magic Number
There is nothing magic about 10 reporting trade lines other than the fact that many lenders and vendors have set that as the bar for no longer requiring a personal guarantee for lending your business the money or providing your business with the line of credit. Think about it, they need enough reporting payment history to determine a strong pattern of how your business pays its bills month in and month out and that cannot be established if your business only has 2 or 3 reporting trade lines. If you only had two credit cards and one student loan payment would you be qualified for a home mortgage? Probably not.

High Risk Versus Low Risk
Now, let’s make you the landlord and you have a choice between two prospective tenants. One has a five year credit history with 10 or more paid perfect reporting trade lines and credit scores in the 740 range. The other prospect has only 3 reporting trade lines, a few 30 day late payments, and credit scores in the 620 range. Both are willing to meet your lease terms. Which one do you select? Exactly! Lenders and credit providers are no different. They are going to approve the lower risk prospects and pass on those that have too little credit history or poor payment history, just as you would.

Becoming Bankable
Having at least 10 reporting trade lines on your business credit reports is a great step towards becoming bankable. Then you must also pay them on time over a period of time (at least one year) and during that time you must complete all lender compliance items and establish a low 5 bank rating. The 10 trade lines paid on time will create 70 or higher business credit scores. Lender compliance items and bank rating details are covered in separate blog posts. Together these four things make up how your business makes itself become bankable and be able to stand on its own for financing.

Build Business Credit, Business Credit Scores, Lender Compliance Items, Small Business Financing

6. November 2017

You are about to make that decision, "Do I play it safe and take that job or do I take that leap and start that business?"

Risk versus reward is the question every entrepreneur asks themselves before they start their business. Simply put, "is doing this worth the risk?"  You have a business idea for a product or service that you believe is marketable and that will have more upside than taking that job and that is where the decision is made and you elect to go for it.

Now take your entrepreneurial hat off and put on the lender's hat for just a minute.  You believe in your business idea but is that belief based on supportable research or just your enthusiasm. A lender cannot afford to share your vision as you are asking them to share your risk as well.

When lender's consider sharing the risk of your startup business it now comes down to the numbers and the numbers are stacked against you. The numbers say that over 90% of small business startups fail. Lenders look into their own loan portfolio for default warning and high risk signs. There they find that home based businesses fail more often. Businesses operating from cell phone fail more often. Businesses with only free email accounts fail more often.

Now in you walk all excited to get your great business idea going and to the lenders all they see is all these red flags of high risk waiving in their faces. Their answer has to be "Declined" because you have left them no other choice. They see your business as having all the failure warning signs of so many more that came before you and proven those numbers to be oh so right.

Well maybe their warning signs of high risk of default should be a wakeup call to the your level of risk as well. Most businesses fail due to not doing enough homework before they start and then not having enough capital to execute after they start. 

You can handle the first part by doing your homework. Research your proposed market and be ready to present the facts about; competition, market size, market penetration, cost to market, profit margins, time to market, market demographics, and how is new technology going to impact you.

You can also handle the second part by completing Lender Compliance. These are things like having a business entity, insurance, a real business address, an FCC business phone, a good website, social media presence, local and mobile search presence, a CRM, and a good accounting system. These are all things that you will need, that will send clients to you, and in the end will lower your risk of failure along with changing how lenders look at your risk of default.

To get the best grade possible, you wouldn't take that all important final exam without study and practice. So why would you start a business without research and preparation? We don't know, but that is what most small business owners do, and that is why so many fail. 

Knock out both parts right at the beginning of your new business and you will not only lower your risk but you will find more lenders that are willing to share it with you.

Small Business Financing, Business Startups, Entrepreneurship, Business Planning

3. November 2017

So you have a great business idea, now what? You want to turn your idea into a reality but how? Where do you start?

It starts with a fairly simple foundation. First, form an entity. You do not want to be doing business as a sole proprietorship or partnership where 100% of all liability and debt will flow directly back to you personally. Even if you plan to have no employees you should still operate your new business as an entity.

Consider forming either an LLC or Incorporation. There are a lot of inexpensive services out there to help you with that and to help with the features and benefits of each. Bottom line is that if you plan on having employees or if you plan on having a business that can stand on its own for financing then you are going to have to an entity to make that happen.

Next you need to write it all down and plan it all out. This is where going through the exercise of creating an SBA qualified business plan really helps. Whether you plan on applying for an SBA business loan or not is not the point here. The SBA business plan model will help you determine if your business idea is sound and if it makes sense. Also there are over one thousand Small Business Development Centers (SBDC) in the country that provide free help creating your business plan.

Turning your great business idea into a real business plan can help your idea gel and also point out to you many things you may not have thought of yet, such as; location, demographics, expenses, equipment, employees, out sourcing, taxes, inventory, materials, competition, technology, and more. The last thing you want to do is to create a new business where demographics, technology, or competition may have already made it out dated, not cost effective, or not feasible. Creating your SBA business plan will help you to look at all these so that you are not starting a Blockbuster Video or Tower Records.

Once you have created your entity and you're satisfied with your business plan, the next phase is to secure financing. Eevn if you have a lot of capital of your own you are going to want to secure your backup financing as when you really need it is not the time to start looking for it. Here is where Fundability.com really comes into play. Being a free service it guides you through all the aspects and steps required to get your new business pre-qualified and better yet to become bankable.

Becoming bankable simply means that your business has become able to stand on its own for financing without always having to rely upon your personal credit to do so. Make no mistake, when your business is a pure startup then its early stage financing is going to be tied to the personal credit of those owning 15% or more of the business. Fundability.com helps here too by showing you how to optimize personal credit and to maximize your financing opportunities.

Small Business Financing, Business Startups, Entrepreneurship, Business Planning