In general terms, the banking industry has turned its back on the small and midsize business owner. Statistically, banks reject 70% of all loan applications that pass over their desks. With the national mortgage crisis continuing to spiral out of control the entire banking industry is under immense pressure and it has tightened its stoic grip on lending standards. Just ask any business owner who is currently seeking financing from large prominent banks and small community institutions. Everyone will tell you that these establishments are simply not extending financing to small and midsize businesses. According to a recent New York Times article, a Wachovia banking executive was quoted as saying, “We’re saying NO to almost everybody” when it comes to small business loans. And frankly, if a business has little history, marginal credit, and no tangible assets they need not apply at all.
The major problem is that business owners are mentally programmed to go to banks when they need money. (After all, these owners have been putting their hard earned money into the banks and the banks have been making considerable profits from the deposits, so it only makes sense for the bank to grant the business owner a loan when it is needed.) However, when the bank rejects the request of the owner, the owner feels there are little or no alternatives for the funding of his business. But, there is an alternative to traditional bank financing and as an informed business owner it is imperative that you understand what options you have.
One of the best kept secrets in American small business is the idea of FACTORING. This financing medium provides an almost limitless source of working capital for growth and is a proven powerful financial source for small to midsize businesses. Factoring, in its purest form, is simply the process of buying the accounts receivable of a company. As a small business owner, it is not financially feasible to wait 30-90 days for payment. But, if we are marketing to large businesses and governmental agencies, these entities expect extended payment terms. If those terms are not granted, the small business owner will forfeit the sale. Factoring allows the small business owner to offer terms of payment and still receive the funds immediately, in essence receiving a net zero term on invoices. With a factoring relationship in place the small business owner can meet weekly payroll concerns, pay taxes and vendors in a timely manner, and purchase necessary materials.
One point that should be duly noted is that this method of commercial finance is NOT A LOAN. The factor actually purchases the invoices. A typical scenario works like this: A business needs working capital for some immediate purpose. The owner contacts a factoring company and a financial relationship is started. When the factor purchases the accounts receivable of the business, the factor directly advances 80% of the invoice face amount at the time of purchase. This means that if $100,000 in total invoices were submitted for factoring, then an initial working capital advance of $80,000 would be provided. The $20,000 balance that is not advanced is called the reserve. The reserve is used as a cushion against potential non-payments. When the reserve is distributed to the business owner, the factor will calculate and deduct any fees for services and additionally will chargeback any invoices that have aged beyond the factor’s normal holding period, generally 60-90 days. The factor’s fees can range anywhere from 1.5% – 3.5% for advances.
Factoring companies are the mirror image of banks. The most important feature is that factors are not lenders, which means that a factor can provide financial assistance to companies that are growing without the traditional restraints of conventional financing. There are no cumbersome applications, no loan committees, and no rigid formalized production. Factoring is quite the opposite. The application process is fast and straightforward. Most factors require only a two-page application and can have funds to the small business within days of approval.
Furthermore, a business owner may consider factoring as an alternative because the business qualifies based on sales, not on assets. If a business generates $1 million in annual sales, it is a valuable operation. However, if it only has $50,000 in hard assets, that business will not qualify for much of a loan. In factoring, the issue is the strength of the receivables being sold, not on the collateral of the business – which is a major criteria for banks.
Another feature of factoring is that since factoring is not a loan, your business will not incur further debt. This is important for startup businesses that want to become “bankable” in the future. With factoring, there is no compromise on your balance sheet, you simply sold an asset.
One last vital element of factoring is that this form of financing is one of the few alternatives for businesses in bankruptcy. Banks cannot be involved with companies in bankruptcy, because they are lenders. Factors are not lenders, they are purchasers.
Any business that invoices another business for goods or services will qualify for factoring. Usually, businesses that are in the startup or expansion mode are the ones that benefit from factoring. But, factoring is designed to meet the needs of any business that has little credit history, is undercapitalized, or lacks tangible assets.
Factoring, as a funding source, works best for businesses in the service sector industry. Businesses such as employment staffing, janitorial, commercial landscaping, advertising agencies, security services, and consulting are prime candidates. These are the businesses that have human resources, but no tangible “loan-able” assets such as real estate, equipment, inventory, buildings or other structures.
For companies for whom bank financing is not a viable option, factoring provides access to cash. Companies in financial need are able to retrieve working capital from their accounts receivable quickly, easily, and without acquiring more debt. Factoring has gained popularity since the mortgage fiasco has overwhelmed the banking industry. Since small to midsize businesses are routinely being denied loans by banks, the owners of these companies have no choice but to at least ask, “What is factoring?”
Now, you know.
If you would like more information about this topic, or to receive a free booklet of “When Banks Say NO!…a Small Business Guide to Factoring” , please visit our website at www.KeyWorldFinancial.com. To schedule an interview please contact Annlette Key at 1-877-539-4321, or email info@KeyWorldFinancial.com
Month: September 2008
How does my martial arts training directly relate to my success as an article marketing expert?
When I was seven, I was a scared, scrawny cry baby. Kids in the neighborhood stole my hat and I ran home crying! My younger brother, who was only four at the time, knocked on the bully’s’ door to get my hat back.
My parents enrolled me into Chirico’s School of Karate, where I learned steps that took me from NOTHING to a SELF-ASSURED 4th DEGREE BLACK BELT.
I also learned secrets on how to become a champion in the martial arts. I discovered that these same secrets helped me become a champion in all areas of my life.
So do you want to know what these life-changing, business-evolving secrets are?
7 Black Belt Secrets for Article Marketing Success
Secret #1: Watch who you hang around with
One of our black belts drives all the way from Pennsylvania to New Jersey to practice. That’s a 3-hour round trip.
Why?
The furious energy at Chirico’s School of Karate is undeniable as soon as you walk in the door. You’re surrounded by a true grandmaster with more than 40 years of martial arts training and black belts who are determined to succeed.
Who are YOU hanging around? Where are your articles being associated? Are you just blasting articles out there? Or are you carefully selecting websites and ezines which your targeted audiences and prospects read? Remember, who you associate with will determine the level of success you can reach.
Secret #2: Consistency is the key for long-term success
When I don’t train consistently because of traveling or personal issues, I lose karate tournaments. If you want to achieve your business goals online, you have to consistently write and submit articles. You have to be in front of your audience on a regular basis. Otherwise you will lose sales to your competitors.
Secret #3: Ups and downs are part of the process
During my martial arts training, I learned that there is NO possible way that you can win every tournament. Yes, I can’t even tell you how many trophies, medals and plaques I have won throughout my more than 20 years of martial arts training. But, I also lost count of how many tournaments I lost in the very first round.
Not every article you write and submit online will be a success. You will have ups and downs with your article marketing efforts, but you have to keep writing consistently. It’s the only way you will win in the long term.
Secret #4: Hard work is part of the game
It took me ten years of blood, sweat and tears to get promoted to the rank of black belt. I learned that there are NO obstacles that I couldn’t beat if I consistently persevere.
How many of us secretly wish our success would be handed to us on a silver platter? Get real. There is work involved. The solution is to make the hard work FUN by doing what you love to do (sharing your expertise) and delegating what you don’t (the mind boggling, manual article submission.)
Secret #5: Model others who are already successful
My instructor is a 10th degree black belt grandmaster. Yet, he doesn’t try to reinvent his own martial arts training programs from scratch. He adapts training techniques, forms and strategies that were created from the ancient masters who have proven their immense success.
When writing your articles, model article templates that work for others and then adapt it to your own writing style.
Secret #6: Don’t put all your eggs in one basket
When we practice self-defense, we train for a variety of attacks from the front, sides and back. We do grappling and ground techniques. And, we even practice fighting against multiple attackers. So we’re ready for all situations.
Just like we want multiple fighting strategies, you want multiple streams of income that will help you fight the recession. You can easily turn your articles into products like special reports and eBooks.
Secret #7: Find a mentor or coach for faster results
I would not have been a state champion for two years in a row, if my instructor didn’t walk me through every step of the way. I know many entrepreneurs who have wasted thousands of dollars on marketing programs that got them nowhere. Don’t make that mistake. Invest in someone to show you the way – the right way – the first time. (Not sure where to start? Join my Write Your Way to Profits Insiders Circle)
Follow these secrets, and you will reach article marketing success. You will be found online. And, you will get more prospects, publicity and profits
Article Marketing Expert Eric Gruber uses the power of articles to create online opportunities for entrepreneurs who want more publicity, prospects and profits. Now, Eric is sharing the exact roadmap, broken into 5 easy-to-follow steps that thousands have used to launch and build their businesses online with articles. And, he’s giving this knowledge for FREE, with his new e-Book at: http://www.BroadcastYourArticles.com/freebook
Article Contributed by Eric Gruber
Most new online business owners think that Internet marketing is their magic pill to making more money.
I have news for you…It’s not magic. It’s a process.
But once you WORK that process, it CAN work like magic!
Here’s the Internet Sales Cycle Broken Down into 5 Simple Parts
1. Collect Leads
The absolute best way is to get leads online is to write unique, original articles that position you as the expert in your specific niche. And, it’s not that hard. All you have to write is a simple 500-word “how-to” or “top tips” article that will solve your prospect’s pain. Wonder what a “how-to article” is? You’re reading one!
Then, you want to submit your articles to the top websites, ezines and article directories that your targeted audience is reading. This way, you will be able to drive more website traffic and build your list.
2. Get Them into Your Sales Funnel – And Build Your List
Once you’ve written your article, you need a way to get prospects into your “sales funnel.” The best way to make this easy is to offer a special report, e-Book, e-course, checklist, audio, video or anything else your heart desires. You will not charge for the product. Your goal is to get names now, and make sales later. You will put this information at the end of your article in what we call the bio box.
In the bio box, you can promote your:
– Website
– Products
– Services
– Specific “call-to-action” that leads them to the special product you offer
For an example just read my bio box at the end of this article.
Most people make the mistake of trying to sell high-priced products and services in the bio box. Getting visitors on your list should be your number one objective! Why? Up to 99% of your first-time visitors will not buy from you. They’ll take a quick look and then they’ll click away. If you did not capture their names and email addresses, you will have lost them forever.
3. Follow Up
Marketing studies have always shown that your prospects need to be exposed to your message at least 7 times before they’ll take any action! That’s why you need to build and maintain relationships with your list.
This is where ezines, e-course and autoresponders work like a charm. They will follow up for you automatically. In fact, with the marketing and shopping cart system My Easy Online Store, you can schedule email messages up to two years away! It’s like putting your marketing on autopilot, so you can just set it and forget it!
4. Close the Sale
Your ezine, e-courses, special reports and autoresponder messages should drive readers to what you have to offer. However, don’t forget to provide useful content and information. That’s why they gave you their names and emails and that’s why they’ll stay on your list.
Here are two reasons why you shouldn’t make the mistake of trying to sell from the actual email:
1) You don’t have the room in an email to fully explain what you’re selling and demonstrate its value to the prospect
2) It can turn people off who aren’t ready to buy yet. You’ll instantly lose those prospects from your list.
The idea of the email is to get them excited about your offering and to get them to CLICK. Once they click, then they should be taken to a sales page that you set up specifically for that product or service you’re promoting. It’s THERE and ONLY THERE that the prospect will get the full scoop on how great your product, book or service is, why they need it, how much it costs and how to order.
5. Upsell, and Upsell Again
Here’s the biggest mistake I made when I started to sell my first information product online, “The A to Z Article Marketing System.” It was the ONLY product! I didn’t even have a membership club in place. So once people bought my product, I had nothing else in my funnel to sell them. I had to work extra hard at finding new prospects all the time. It’s been said for ages: “It is easier to sell an existing client a new product than to find a new client.”
That’s why you need to continue turning (churning has a bad connotation) out valuable new products and programs that your customers will eat up like crazy. You can simply create new products by recycling the articles you used to collect leads.
Now, you have it — the Internet sales cycle broken down into five easy parts. Now, you should see the missing links in your own Internet sales cycle. Have patience, keep learning and don’t stop writing. You’ll begin fill in these gaps, and start to see the magic of article marketing work for you.
Article Marketing Expert Eric Gruber uses the power of articles to create online opportunities for entrepreneurs who want more publicity, prospects and profits. Now, Eric is sharing the exact roadmap, broken into 5 easy-to-follow steps that thousands have used to launch and build their businesses online with articles. And, he’s giving this knowledge for FREE, with his new e-Book at: http://www.BroadcastYourArticles.com/freebook
Article Contributed by Eric Gruber
Article marketing has many perks and benefits. We can communicate with people on a global scale. We can reach many targeted customers very easily. And we have the added bonus of showing our readers that we’re experts in our niches. This builds customer confidence.
But one of the challenges of marketing our businesses online is figuring out how to reach through the cold, mechanical computer screen and make a real human connection. Remember, people want to do business with people they trust.
So, what can you do with your articles to establish trust online with people you may never see or meet in real life?
5 Ways to Build Trust & Win Customer Confidence with Article Marketing
1) Don’t stop writing.
You can’t submit one or two articles and then expect to be regarded as an expert in your niche. It is the accumulation of repeated positive experiences with you that makes a lasting impact. As you’re doing your article marketing, you should regard each article as a way to grow your relationships with prospects and clients. Decide on an article submission schedule that you think you can consistently complete long term. Once a month is a good goal.
2) Show readers that you’re worthy of trust.
To build trust online, you want to show authenticity. So, before you write one word, think how you want to come across as a person. The more you’re willing to let your guard down and portray yourself as a real person, the more you’ll be rewarded.
3) Connect with readers by showing them that you started out just like them.
Remember, most people buy on emotional impulses and not on logical, intellectual decisions. That’s why during my speeches to large Internet marketing conferences and in my articles, I explain how I couldn’t find a job and how I put my parents into debt as they tried helping me pay my bills. I explain how I even had to ask my grandparents for money. And I talk about the mistakes I made.
After the connection is made, then I show my audience how I’ve become an article marketing success. When you show readers that you started out just like them, you will build an instant connection and you will give them hope. This will make it a whole lot easier for them to buy your products or services.
4) Show your results.
You have to give readers a reason to believe your advice. So quantify your results as much as possible and proudly show them. For example, you can end our article like this way:
“By following my advice above, Marketing Expert Scott Glatstein went from just 8 links on Google to more than 2000 links in just one month. His website traffic quadrupled from year ago levels. After the second month of doing article submissions, his traffic increased another ten percent to set a new 5-year high water mark on web traffic.
5) Realize the huge impact recommendations bring.
When we write articles, we’re trying to make connections with people who we may never meet or talk to in person. It’s natural for anyone looking at information on the Internet to think, “Hmmm, can I trust this?” This is why third party recommendations pack a punch, especially if you’re trying to promote a book, product or service.
For example, here’s a bio box we created for “America’s greatest sales and marketing executive” Chet Holmes…
Jay Levinson of Guerilla Marketing says, “Business Growth Expert, Chet Holmes has the best ideas you will ever hear on super-fast business growth.
Article Marketing Success You Can Experience and Enjoy If You Follow My Advice
By following my advice:
• Distribution Industry Technology Expert Dani Kaplan had his best year of business in 27 years of business.
• Lesley Mattos tripled her website traffic
• Kevin Berchelmann, CEO of Triangle Performance acquired a new mid-5 figure client
That’s just a small sampling. Many more results can be found at my website at IWantMoreProspects.com. You, too, can experience these article marketing successes if you follow my article marketing system.
Article Marketing Expert Eric Gruber uses the power of articles to create online opportunities for entrepreneurs who want more publicity, prospects and profits. Now, he’s revealing his top secrets to writing articles so you can boost your website traffic, get more leads and create multiple, profitable streams of income. Go to http://www.BroadcastYourArticles.com and let Eric teach you step-by-step, how to write your way to profits!
Building a successful long-term profitable business isn’t about “marketing” your business, it’s about “managing” your business – the marketing comes once you have your management systems in place.
You cannot begin to market your business if you can’t find the information you need, don’t know who you are marketing to, and don’t know where you are in your business.
So, let’s go back to basics and take a look at one of the key office organization systems you need to have in place to “manage” your business before you can start to “market” your business – your contact management system!
If set up correctly your contact management system allows you to:
* Keep a note of clients, potential clients, and colleagues contact information.
* Easily and effectively follow-up with a prospect.
* Locate critical client contact information quickly and easily.
* Build your business.
Having all of your contact data readily to hand will allow you to build your business. You have all the information you need; it’s all in one place, and you can locate it quickly and easily. Follow-up becomes a much smoother process and in turn it builds your business.
Let me share with you below my 5 easy steps for creating your ideal contact management system so that you constantly have a full pipeline of interested clients and prospects:
1. Choose your system. You need to decide on a system that works best for YOU and YOUR business. This could be using Outlook (as I do) to manage all your contact data, appointments, To Do lists, etc. or you could use dedicated contact management software. A third option might be to utilize one of the many web-based contact management systems.
2. Draw clients into your pipeline. Once you’ve got your contact management system in place, you need to have a system for keeping in touch with people you meet at in-person events, online networking forums, or visitors to your website. One way to do that is to publish a regular ezine (electronic newsletter). This will keep clients and prospects flowing into your business and provide you with a base of interested people who want to find out more about you, your services, and your products.
3. Define the process for working with new clients. Once you’ve got prospects into your pipeline the next step is to create a system so that those clients who are ready to work with you are able to do so. This could be through an initial complimentary consultation to determine if you are a good fit for one another. List everything you currently do and come up with a system for streamlining the whole process.
4. Keep it all up-to-date. It’s all well and good having the systems in place, but if you’re not keeping it all current, then your contact management system quickly becomes of no use to you at all. Ideally, you should be updating your client data as you go along, but if you find you’re not doing that, spend 15/20 minutes at the end of each day, before you shut down your PC, reviewing who you’ve talked to/emailed, what the outcome was, and when you promised to follow-up with them. Note it all down in your contact management system.
5. Create a waiting list! If you find that you have more clients wanting to work with you than you can handle, offer to put them on your waiting list. If you suddenly get a client who has to cancel (and it does happen, for a variety of reasons), then you’re not left with a big hole in your cashflow – you simply approach your waiting list and let them know you have an opening available. Plan to keep in touch with your waiting list on a regular basis so that they don’t forget you!
Consistency is the key to keeping a steady flow of clients and prospects coming into your business. Make the commitment to spend time each and every day on your contact management system, and watch your business grow!