Posted by Ernie Brown on Tue, Dec 27, 2011 @ 03:13 AM
Have you seen that ad that says: "STOP FACTORING" ... but when you click on the add it takes you into the process of ... factoring? Love it!
Invoice Factoring by definition is the selling of your invoices at a discount to a third party so that you have the cash today and then they wait to get paid in full and are renumerated by keeping the amount of the discount.
Either way: If you're considering some deviation of the factoring process open your eyes wide and read on because your customer is still going to know (minimally they change the assigned mailing address as does any factor!). And your customers? Who is checking them ... ???
That said the costs may seem better but the reality is that the pricing for a formal factoring program is competitive - and sometimes even less than with this process - and the value added services a factor offers goes beyond the basic transactions so why not get more bang for your buck?
The spear is also thrown about being 'fiscally responsible' ... but are they?
DO YOU HAVE COVENANTS? Your accounts receivables are an asset and if you have a loan and if your bank is not fully aware that you're selling your receivables off you might want to confirm that you're not out of covenant ... unless you want to risk having your loan called which will really make your life a lot of fun - NOT!
ARE YOU INVESTING IN THESE RECEIVABLES? If you are then ...
- Who actually owns the account receivable?
- Does the seller have any liens? IRS issues? Judgements?
- Does the customer paying the receivable have any liens? IRS issues? Judgements?
If either the seller or the customer have issues and you buy their receivables are you aware that the transaction may stand to be turned around up to 90 days after it occured ... and you may stand to lose becuase of this!
MORE? What is the condition of that invoice ... which is your collateral i.e. Is the sale complete and/or the services accepted and if so who has confirmed that it this?
LASTLY: How is the credit of the payor and who establishes and guarantees that for you?
Does it make sense that when you consider many of the confirmations and "check offs" that factors execute before they'll fund a deal or buy an invoice that there are valid and serious reasons for every question and every verification?
Face it: They are in the business of ensuring cash flow at a competitive price ... which may not always be the lowest ... and without any hiccups that could cause problems.
"STOP FACTORING" says the add ... but when you sell your invoices or invest in buying invoices you're part of the process of factoring so to avoid being caught in a process that may just be a watered down version of a proven process keep this article in mind and 'peal back the onion' real well to ensure you know what you are getting!
Better yet: Here are ten things you should know about factoring with no strings attached ... Ten Things You Should Know About Factoring ... Face it: Education is your key to success!
Posted by Ernie Brown on Sun, Nov 06, 2011 @ 04:40 AM
Why do invoice factoring and working capital providers ask what they ask ... or should ask?
Working capital provider or not: Be careful when money changes hands!
Whether factoring invoices or offering a signature loan funders and lenders - as well as you as a buyer of goods and services - should do some homework or be prepared for a rude awakening if things aren't in good order with whom you do business with.
IMAGINE THIS ONE ... You buy that new Ipod or the like and a few days later the police knock on the door and demand it back because it
was from a shipment that was stolen ... or someone registered a judgement against the store that sold it ... or the IRS decided to liquidate the seller.
"They can't do that!" you say? Actually they can and often times go back as long as 90 days after the actual transaction was executed ...
Long since do I remember the supplier of a $40K (+) copying machine that sold it to a company having 941 issues and two months later the IRS put their foot down and unraveled the transaction and he had to take back the machine and give back the $40K so that IRS could take it. Oh ... one other thing: He couldn't send the machine back to his suppler and had to eat it. It happens ...
The point herein? Did you ever give thought to whether what you buy is free and clear of encumbrances and that nothing will disrupt the transaction further down the road? For the most part I don't ... not unless I'm buying an invoice or lending.
That said: Learn from what invoice factors and lenders ask what they do and do so in an ongoing manner i.e. they need to ensure that the invoice and collateral is real, not pledged to someone else, and not in jeopardy of a third party swooping in and causing a problem. You too should be aware of this during these times or that "deal" may not be such a deal after all. It seems like it's a pain but the reality is that this awareness actually makes you a better and more secure business ... tough though it may seem at times.
Did you ever give thought as to why banks go to the lengths they do to ensure your assets and records are in good order before they'll lend you money ... and then race to the courthouse to register their UCC's and/or liens? There's a reason for it ...
Along that line? I recently came across a borrower who had a lender they walked away from for millions because the lender had not secured themselves properly ... and it was 100% legal.
Why do we ask what we, when we by invoices, ask what we do about invoices when we buy them and shudder when we look at what companies such as the Receivables Exchange do? It's simple: We don't want to "get the invoice home" and hear a knock at the door because something is wrong such as the invoice isn't real and/or the customer didn't get the product they were promised. Face it: Factoring Fraud is a big problem!
That said: If you ever consider buying an invoice? Make sure ...
- The invoice is free and clear of all encumbrances
- There are no covenants governing it
- Whom you are buying the invoice from has no liens, encumbrances, and/or whose assets are not controlled by an agreement and/or covenant
Why do lenders ask what they ask? They need to do all that they can to ensure that the payment stream a borrower says they have is free and clear i.e. are their 941's and/or other obligations paid etc.?
This is why ...
- Factors only buy invoices for work that is completed and can be shown to be complete ... oh: And why they contact your customer!
- Invoices must be free of liens and not being used as collateral for other loans and/or cash advances
- The company must have their 941's (Payroll trust money) in good standing as well as their taxes filed
- The company must be registered in good standing with their respective state
- If a companie's net worth is negative and there are large payables these must be worked through
The same should apply for all lenders ... as well as companies transacting business with other companies ... and not just funders! To boot: Keep this in mind if you are buying something from a distressed company or you could lose your money and the property!
Seem unreasonable? It's not ... asking the questions that most of us take for granted and probably shouldn't can keep us from owning that infamous bridge in Brooklyn!
Yours in business ... and the best to you and yours in Health, Happiness, and Prosperity!
Ernie
Posted by Ernie Brown on Thu, Oct 13, 2011 @ 10:59 AM
When a staffing company said they were talking to two other factoring companies about working capital and were all confused by the contracts why should it come as a surprise?
A necessary 'evil' in all contracts are called COVENANTS. These little devils, sometimes inserted in a seemingly harmless manner, can have the teeth of a piranha and the aggression of a female bear protecting her cubs.
Many a borrower can tell you about these if they've violated them ... so what is to be done? As negative as these sound the reality is that covenants create warning signs and/or limits as indicators that a borrower/client's financial position is changing and whose intention is to allow the lender/funder to begin corrective action early on ... if they choose to. Sadly ... a lender/funder can also come down hard on their client if they choose to.
Covenants are also put in there to ensure that a borrower doesn't run amock and jeopardize being able to pay back a lender/funder ... but some will say that they are there to entrap a borrower and nothing less!
Most of us are familiar with what credit card covenants i.e. if you pay a few days late or a day late twice in six months and your rate can go from 9% to 29% ... plus late fees. These are covenants ... therefore ...
RULE NO. 1: NEVER SIGN A CONTRACT WITHOUT READING IT AND UNDERSTANDING IT!
RULE NO. 2: MANY THINGS IN A CONTRACT ARE NEGOTIABLE UNLESS IT JEOPARDIZES THE FUNDER'S OR LENDER'S COLLATERAL POSITION. REMEMBER: THEY WITH THE GOLD MAKE THE RULES ...
RULE NO. 3: IF YOU DON'T ASK YOU WON'T GET ... AND WHAT YOU DON'T KNOW CAN - OR MIGHT - HURT YOU.
That said we offer invoice factoring so I asked the owners of the company I was working with what they had learned thus far. They had a minimal handle on the process as in only what they had been told ... so I referred them to some materials and information so they could educate themselves fully. Why? The success of their company depends on this ... and then came their feedback ... and perceptions ... and where the confusion was coming from.
Terms such as ...
- Advance Rates ... were these guaranteed or conditional?
- Concentration Limits ... was any one customer too powerful?
- Return of Reserves ... what was the obligation of the funder to send monies back when an invoice was paid?
- Late payment schedule ... were there penalties if a customer paid late?
- And others ...
were in all of the contracts but described differently and even appeared multiple times ... so what does one do? Read carefully ... and get it explained to your satisfaction!!!
The contract? In reality a contract should be simple in format and easy to read so that most anyone can comprehend what it says or doesn't say. It should also have things flow together so that you don't have to chase information in several parts of the contract either. If it's more complicated than that the odds are someone is trying to hide something so buyer beware! This is never to say that there won't be a few terms or conditions that need to be clarified but it does mean that a document should not be written in a way that is confusing, misleading, or worst of all: Hiding something!
A good guideline is that anything in a contract that pertains to collateral, timeliness of payments, and/or process is a great opportunity for a covenant to tie back to it. In executing any agreement ensure that ...
- The operating relationship is clearly defined as in "Here is what we'll do and here is what you are going to do until we (the lender/funder) are paid back" ... Works for me!
- If the borrower gets cute (I use this terminology vs. saying: VIOLATES THE TERMS OF THE AGREEMENT as in tries to cheat the lender/funder etc.) the contract should spell out what the lender/funder can and/or cannot do to protect their position.
- If something changes with the financial status of the borrower/client the actions and/or limits of the actions a lender/funder can make needs to be clearly stated.
- A lender/funder should be happy, if not proud, to go over the terms of their agreements ... and if they aren't then our advice is to watch out!
In closing: Remember that your business depends on you making the right decision and the devil may be in the details but make sure you understand what you are signing and if not make sure it's explained thoroughly!
My best to you in Health, Happiness, and Prosperity!
Ernie Brown Ph: 1-978-256-8634
www.finance-manager.com
Posted by Ernie Brown on Thu, Oct 06, 2011 @ 03:07 AM
Business Finance is a topic that everyone you talk to is an authority on and yet everyone you talk to has a twist to what they'll tell you. Why?
- Business Finance can be accomplished in more ways than one
- Businesses are different
- Resources of borrowers vary
- We've all had to finance something during our lives so we all qualify as authorities ... but are we?
With that said does it not make sense that there is so much diversity ... and confusion?
Is it best to use ...
- Debt Financing
- Collateral Financing
- Cash Flow Financing
- Asset conversion
- Equity
- Investment ... and more
Coupled with the fact that businesses are different as are the resources of borrowers and is it any wonder that confusion can reign supreme?
In moving forward: Give serious thought to staying out of debt and if you're in the business of offering open terms to your clients ensure that you have solid practices in place to protect you and your company because if you don't you're apt to be left holding the bag ... and it won't be pretty.
If you do borrow be careful: We just had to work with a person that as part of his business plan he stated to the lender that he would lose a certain amount of money during his first year in business and he nearly hit that number on the nose. As he moved into his second year and his monthly projections were being maintained and he turned to a positive cash flow the bank he was with got bought out and the acquiring bank said: You lost money and you're out of here and he's now in workout. The sad part is that he did what he said he would do ... and good or bad he personally has "deep pockets" so he's truly in a tough spot.
Our best advice?
- Act on an opportunity
- Talk with resources familiar with your business niche
- Remember that what got financed three years ago is not apt to apply to what you are doing today
- Remember that the lenders make the rules - not you
- Be willing to adjust your game plan to conform to the lending ... the odds of the opposite happening are not likely!
In closing a best suggestion is to ask for advice outside of your sphere of friends. Most friends, God Bless them, will side with you and tell you what you want to hear and sadly you need the critique of an objective professional ... so get that and nothing less!
May you have great health, wonderful opportunity, and reap great prosperity in your travels!
Ernie Brown, Principal of Financial Manager's Resources www.finance-manager.com
Posted by Ernie Brown on Tue, Sep 20, 2011 @ 02:55 PM
Faced with giving up 30% of their company for an equity investor the attorney for the startup company suggested the owner speak with me. In discussing the need for working capital the solution was simple: Factor Receivables. Why?
The business owner had found a contract manufacturer that would supply the goods and provide open terms for 30 days while the largest customer of the business owner would pay in 45 days ... so what is needed here?
Factoring accounts receivables on the 30th day let the business owner stay in good terms with the contract manufacturer and too they only had to factor invoices for 15 days (actually 18 days to allow for the mail to move the checks).
That said: Why give up 30% of your company for the sake of working capital when the reality is that your credit facility with the factoring company is only limited by your sales volume i.e. you keep your customers supplied and your supplier paid: The perfect world!
Add to this that the factor would do all of the credit work plus insure the account receivables and wouldn't you think it to be a no brainer but when we met with the business owner she was concerned, and should be, about what her end customers would think. Real ... Until we let her speak with two of our other clients that were already factoring their account receivables with the same customer.
Our path forward? We set up a meeting with her bank and asked the bank at what point the bank would come in ... which shocked her ... but at least she knew where she stood. Meanwhile? She has some set objectives, can grow her business on an unlimited basis, and knows her path forward so that she can become a success story instead of giving up a large share of her company to someone just because they have some money to invest!
In closing: Search out options when it comes to capitalizing your company with the following objectives in mind:
- Don't give up equity unless you have to or unless you have a truly solid reason to. Sometimes it's a good move ... but sometimes it's something that you'll regret down the road too.
- Do all that you can to utilize bank funding and choose how you capitalize your company to align with a plan to access bank programs.
- Unless you have a solid foundation in capitalizing companies utilize the services of someone that helps small businesses plan to achieve financing. They know the ropes and shortcuts and can save you time and even how much of your company that you'll come out owning!
Wishing you all the best in health, happiness, and prosperity ...
Ernie Brown Ph: 1-978-256-8634
Posted by Ernie Brown on Tue, Sep 06, 2011 @ 01:28 AM
What reasons would you have not to use factoring to capitalize your company?
What is factoring? Invoice Factoring is the sale of a invoices for cash today for work that has been completed and accepted at a discount i.e. the factoring company buys the invoice and takes ownership of the invoice. In exchange for paying the company selling the invoice cash today they make money by buying the invoice at a reduced amount. Why would a business owner sell their invoices?
Some companies literally "paint themselves into a corner" ... especially if their products and services are value added and in demand! When this happens and customers slow pay OR demand open terms if their cash doesn't come in as fast or faster than they need to pay their bills it's a problem - big time! By selling the invoices this pain is relieved because a business has immediate access to their cash to generate new invoices, meet payroll, or focus on growing their business.
SO ... let's go to the real reason we are here and explore five reasons that justify a company not factoring their invoices to capitalize their business.
NO. 1 They're bankable ... have deep pockets ... and can borrow as much working capital as they need to run their business.
NO. 2 Their business is a cash business i.e. all customers pay COD.
NO. 3 Their business would not benefit by attracting larger customers who would in turn require open terms.
NO. 4 Factoring costs too much. Although a business ower would pay a sales commission to someone to grow their sales they feel that the price of factoring to cash flow and grow on an unlimited basis is too high.
NO. 5 They would rather put their house and everything on the line to guarantee a loan than to factor their invoices and not create any debt.
With the above stated let's expand on them ...
REASON NO. 1 You're bankable. If you are God Bless you. Obviously you've either got solid personal net worth or you've equalled this status by operating a company profitably and without any glitches for probably two or more years ... and add to this that you have the collateral to satisfy the bank.
REASON NO. 2 Your business is a cash business i.e. you are paid COD. Many companies run this way and if they can grow a customer base that will accept paying COD in an ongoing manner then that's awesome!
REASON NO. 3 Your business would not benefit by attracting larger customers you'd have to offer open terms to. Let's get real: Large customers expect and demand open terms ... it's part of business ... and to not offer open terms almost without exception means YOU ARE NOT GOING TO GROW!
REASON NO. 4 Factoring costs too much ... but compared to what? Although you would pay a sales commission to someone to grow your sales you feel that the price of factoring to cash flow and grow your sales on an unlimited basis is too high.
REMEMBER: Lending money is a one time action on the part of a lender. Factors have to pull their boots on with every invoice and every transaction so it is labor intensive and never ending if they want to be around any length of time. If you compare factoring to a sales commission you pay to someone everytime a sale transacts and your business grows isn't this actually cheap money?
THAT SAID ... If you could double or triple your sales BUT had to collect your money by transacting it on a credit card would you do that? If the answer is "YES" then factoring makes sense ... but if you'd rather keep your sales where they are and not give up that 2 - 3% then hang in there and we all hope you make it!
REASON NO. 5 You would rather put your house and everything on the line to guarantee a loan than to access working capital and create no debt and to factor. Remember: When you factor you do not create any debt BUT when you borrow you're on the hook to guarantee the money - end.
So ... what are your thoughts as to why you shouldn't factor to capitalize your company? Love to hear from you ... and if you want more here are "Ten Questions You Should Ask If You Are Considering Factoring" ...
Yours in business and the best to you in Health, Happiness, and Prosperity!
Ernie
Posted by Ernie Brown on Tue, Aug 23, 2011 @ 12:46 PM
Receivables? Many of us generate receivables ... but did you ever try to buy something with them?
You can if you've been in business quite a while and have a credit line ... but that's not for everyone now is it?
I compare receivables often times to the life of a butterfly:
- The egg to caterpillar stage is the work part
- Then we wrap it up in an invoice and get to the crysallis stage
- Now we wait for the butterfly to appear ... but until it appears we haven't got much AND there is no guarantee that that butterfly is going to appear either!
Let's get back to the business thing: When does the cash "emerge" from the invoice?
Imagine this: You're going to have to declare a profit to the IRS and yet you can't pay your taxes because all you have is receivables ... and your real money is tied up in them.
How about this one: You're going to get paid by your customer in 45 days BUT you have to pay your staff and employees in 14 days and your suppliers in 30 otherwise your employees will quit and in addition to paying a service fee and interest your supplier is going to put you on COD ... BUT!!! ... we have receivables ... good old receivables!!!
Readers: Let's strike a balance here ... Receivables are necessary thing and they are a good thing BUT we need to have a handle on how we get to the "CASH STATE" of being.
How do we do this if we have weak collateral? Marginal Credit? Minimal operating history ... OOPS: These sound like those nasty questions the
banks ask now don't they? Reality: This is where we want to be going ... The Bank!!!
Meanwhile:
- How do we get to become bankable when we can't borrow?
- How do we fill orders when we only have receivables?
- How do we pay our employees when we only have receivables?
- How do we grow and take on larger customers when all we can do is generate receivables?
NO BRAINER ... Eliminate offering open terms with your customers (they'll love that now won't they?) and go Cash On Delivery ... or find a source to convert our receivables to cash until we're big enough to go into an asset based loan or until we have enough history to become bankable.
Most importantly: The sooner a business owner admits that this is the best way the sooner they can stop turning away business and stop impacting their profits.
Why wait? All business owners search for the lowest cost of funds ... and well they should ... but why not sustain your growth until you find it? Invoice factoring is flexible as in you can opt in and out of agreements with relative ease ... promise!
That said: Why not show growth and sales successes vs. sitting there like a lump of mud hoping the rains don't come along and wash you away? I can't figure it out ... but I see it at least once a week.
Think on these things ... and may your monies come to you on welcome wings!
Posted by Ernie Brown on Mon, Aug 15, 2011 @ 02:37 AM
"Account Receivable" ... Asset or liability?
Factors love account receivables - but so do collection companies. Asset based lenders are all over the place with them and banks can be anywhere from warm to ice cold ... so why is there a difference in perception?
Account Receivable as an asset: When are accounts receivables a desired asset?
- Account Receivables - backed by an invoice - must clearly define a completed transaction
- The invoice must clearly define payment terms ... and collection terms if the buyer doesn't pay
- Smartly: The invoice is backed by a purchase order that is signed by the buyer of the goods and services
Anything else?
- A buyer/receiver of goods must be happy with the goods and acknowledges receipt of the goods
- A buyer/receiver of the goods must be able to pay for the goods
Account Receivable as a liability: What makes an account receivable a liability?
- If, when you create an account receivable, you have taken on debt or obligations that you will have to pay in the future - it can be a liability. How about vendors? Payroll? Shipping? Installation? Utilities? Etc.
- If problems with the product/service delivery may motivate the customer to hold back payment or force you to incur additional costs
- If the customer cannot pay or has incurred an event to keep them from paying ... whose holding the bag now?
So ... how do we make sure that an account receivable is an asset and not a liability so we don't end up like our pennilless buddy here?
- Clearly define purchase orders/contracts
- Ensure products and services were received and customers are happy
- Credit check your customers ... even the "old reliable" ones
- Watch for changes in customer payment habits ...
- Maintain solid quality control ... and know your product intimately
What do companies do that create account receivable and incur a liability ... ?
- Poor documentation of sales and/or terms of sales
- Selling to anyone that wants to buy with no credit checks
- Not following up sales or ensuring quality control
Why do factors love account receivable that fit the 'asset' definition? They are great collateral and they'll capitalize your company if they are good.
Why do factors pall at the thought of accepting account receivable that fall into the 'liability' definition? They know the odds are that these will end up in collection.
My questions to you:
- Why should you set yourself up to receive sixty or seventy cents on the dollar for a slow paying account receivable when you can get full value because you didn't do that little extra?
- Why should you risk your business for the sake of selling to someone that won't pay you?
- Why would you not document your dealings or provide good quality control with your customers?
Why do I write this? I consult with companies on how to factor nationwide and the above principles are what helps small companies grow if they are followed and sometimes bring large companies come to their knees if they don't. That said here are "Ten questions you should ask about factoring" if ever you're considering factoring or call me @ 1-877-813-2923 and let's talk.
That said one of my favorite questions to ask some business owners I meet? "Why are you investing in your own demise?"
Sound harsh? It's not as harsh as someone losing their business ... or worse!
Take a step back and look at how you're doing business and then be smart and build your company on assets using practices that keep them from becoming liabilities ... because we all know where the wrong road will lead you!
Posted by Ernie Brown on Mon, Aug 08, 2011 @ 04:22 AM
Accounts receivables are great unless you need working capital ... now.
And that's when I love the response when someone asks me about the cost of factoring ... but gives little or no thought to the value added benefits of it.
Actually? I don't love it because making good business decisions is - or should be - a process of comparisons with the question being: Which avenue leads my business to the most profits with the least amount of risk and the least amount of liability? End ...
That said: If you added a compenent or complimentary service to your existing products or services that would add 10 - 20 - 100% to your sales and increase your profit margins by those or double those numbers BUT would only increase your variable costs 2 - 5% would you use that component or add that complementary service?
When I ask this question guess what most business owners and advisors respond with? "I'd have to be insane not to do that ... " So tell me something, before the men with the white coats arrive: If factoring will provide the benefits above ... Why are we so fixated on it "costing too much?"
The answer is easy and so I'm told it goes back to the 15th Century when children were indoctrinated to be good servants of the Czars and Royalties of Europe.
That teaching process carries over to our thought process about financing: We're entitled to borrow cheap money .... and you should never look at money as a component of manufacturing even if it means that it doubles or triples your sales and your profits! Right?
That said: When isn't the cost of factoring your receivables too high?
My rule of thumb is that this number comes into effect when the cost of the money exceeds the percentage of your budget that your fixed costs take. And remember ... this is just a rule of thumb.
The reason I say this is that so long as the contribution to margin i.e. the net benefit to the profit margin is going to grow with increased sales then the cost of the money is irrelevant not withstanding that we want to get that money for the lowest cost ... unless of course we are turning away sales, disappointing customers, or ruining our credit by not paying our bills in a timely manner.
From here the question becomes when and how long does it take us to get the money to finance our business?
If you think that I don't meet people every day that are not completing sales because they are 'searching' for low cost money you're kidding yourself. My question? Why not fill the sales using my money and take a slightly reduced profit but build customer rapport and brand your product ... and too: Search for your cheap money.
Consider this: Isn't it easier to access cheaper money when you can show successful sales fulfillment and profits than going on the premise "If you lend me the money now my customers will buy my product later!"? I know one thing: The bank is not apt to swallow this line ... not in today's market!
In closing, whether it's this question or something else: Remember to do a comparison of the costs, the benefits, and the risks ... but only if you want to stay in business!
Posted by Ernie Brown on Tue, Aug 02, 2011 @ 04:48 AM
During a conversation as to why one of my clients didn’t have a website John Wolforth, a designer of small business web sites, and I had a discussion that I asked him to put into words … so he is a ‘Guest Writer’ … and well worth the while of being read! 
That said: Why wouldn’t someone have a website? In today’s world that’s a great question …
• According to Jupiter Research, half of all small businesses with less than 10 employees do not have a website.
• 7 out of 10 solo businesses do not have a website.
Things will change and things will evolve - but the reality is that the internet is where information, entertainment and the future of our businesses is most likely to happen.
FACT: 80% of us now spend as much time online – if not more - as we do watching television. 9 out of 10 people now do their research online. Terms such as "Google it", "Friend me" and "Tweet" are now part of the English language.
Think of the benefits:
● You can do e-commerce and reach millions vs. hundreds of prospects
● You can have customers or prospects who want more information about you check you out on the web … quietly and privately with no intrusions
An example? If you own a restaurant or retail operation customers check out your new menu or see your new inventory … and in the latter case maybe even buy on line ... BUT NOT IF YOU’RE NOT ON THE WEB!!!
If you successfully started a business, then you definitely possess enough common sense to know that if for no other reason, you need a website because your competitors have one … and if you don’t think that they are taking your business away or accessing far more customers than you are better think again!
Is it perception that so many small business owners have formed an unfavorable opinion about getting a website, or are these perceptions well founded?
From experience here are 3 general reasons why business owners hold back from getting a website:
1) Lack of Trust. Owners tell or have heard horror stories of shady design firms taking their money and getting a low quality site in return, or sometimes no site at all. Then there are the providers who deliver the site and quietly disappear, leaving the client with no support or means to update their site going forward.
THE GOOD NEWS: Many firms require little or no upfront payment, a sure sign they will deliver what's promised. Websites built on modern frameworks like Wordpress include user-friendly programs that allow site content to be updated effortlessly, thus giving control of the site back to the business owner – not the web designer.
2) Skepticism. Business owners simply don't think a website will make a difference in their bottom line because the value added of a website has not been proven or demonstrated to them, therefore they do not consider the cost of a site a practical investment in their business. THE GOOD NEWS: Website value can be proven by researching your competition online and seeing how they're doing. The good, the bad and the ugly truth about how a company performs will be revealed through reviews, comments and news on many outlets such as social media pages (Facebook, Twitter, LinkedIn), community listings (Yelp) and various blogs. How do you find this info? If you’re not sure: Google it.
3) Lack of Knowledge and Understanding. Many business owners view the internet as an unknown i.e. a digital chameleon that is constantly changing and can bite them back if they're not careful. They are also fearful of the there being a huge volume of time and expense that needs to be committed in an ongoing manner. Questions of concern are …
● How would they market their business with it?
● How would they drive traffic to it?
● How would they create a social media presence, and how to manage it?
● How would they sell or not sell on their site?
The above questions can be become overwhelming and the sad result is no action being taken.
THE GOOD NEWS: There are many companies highly specialized in each aspect of creating an online presence. Most of them will provide services - and training - and do so at a range of prices customized to fit your budget. “How do you eat an elephant?” The answer is “One small piece at a time”. A solid website designer will work with you and deliver your website without breaking your bank account. Remember: If they are reputable and want a long-term relationship with you, it’s in their best interest for you to succeed so search this out!
In closing: The internet is the business community of today, and you need to have your business online to really evolve or the odds are that it's only a matter of time before your business falls off the planet but better yet? You could be the next online success story!
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John Wolforth is the Principal of Fix Your Website NOW, a web design and development company that also provides website repair and upgrades. John's primary client focus is on small business, and he believes that anyone can have a website that fits their business and their budget, which helps these business owners get that extra piece of ‘on line’ marketing opportunity. His website is HYPERLINK "http://www.fixyourwebsitenow.com" www.fixyourwebsitenow.com or he can be reached directly at HYPERLINK "mailto:john@fixyourwebsitenow.com" john@fixyourwebsitenow.com .
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