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Business Trends Finance & Capital How-To Guides Operations Planning & Management

How Merchant Cash Advance Works: Tips for Getting the Best Rates and Terms

Merchant cash advance transactions are big business. In the past few years, the industry has grown from a few providers to what some predict will be an almost 10 billion dollar industry. Search engine results for “merchant cash advance” produce literally thousands of provider results. How do you wade through all of these providers to find the right one for your business? How do you get the best deal? Here’s a quick guide to a successful merchant cash advance transaction.
Only “merchants” can apply. A merchant is someone that owns and operates a business that performs credit card processing functions as a way to accept customer payments. Providers have different requirements regarding the length of time you need to be in business- many also require a certain sales volume for approval. Generally, you’ll need to have at least a few thousand dollars in credit card sales to qualify for a cash advance transaction.
You have to qualify. Cash advances have become a popular method of financing because the approval process is fast and easy. But be careful- just because you’re “approved” doesn’t mean you’ll be able to repay the advance according to the agreement. Many unscrupulous providers have been known to approve businesses they know won’t be able make repayments as scheduled in order to collect the fees and penalties associated with defaulting.
Service agreements set the terms. Once you’re approved for a business cash advance, the provider will send you a service agreement with all of the important information- your advance amount, the “safe” retrieval rate (based on your daily credit card sales volume), and advance fees should all be included in this agreement. Since a merchant advance isn’t a loan, it isn’t subject to lending or usury laws- providers can basically charge whatever they want for services, up to 50% or more of the advance amount in some cases. Be extremely wary of agreements with fees that kick in if sales volume drops below a certain amount (called daily minimum fees) or “balloon” repayment clauses that require payment in full if certain conditions are or are not met.
Repayment is taken from daily sales revenue. You begin repayment the day you receive your advance check, much like a traditional loan. Before you take out an advance, you need to make sure that your current sales volume is able to support the repayment structure specified in the agreement.
What happens next? If you repay your advance according to the agreement, everything is fine. Repayment is usually quick- you should have the advance balance paid off within several months of initiating the transaction. The service agreement governs potential defaults- most agreements contain some kind of a “balloon” repayment clause (see above) or give the provider the authority to place a lien on business equipment or property if you can’t pay back the advance. Providers have also been known withdraw money straight from a business checking account. Before you sign the service agreement, you need to make sure that you know exactly what will happen if you can’t repay the advance according to the terms.

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Success Attitude

Dealing With Fear In The “Discomfort Zone”

Dealing%20With%20Fear%20In%20The%20%E2%80%9CDiscomfort%20Zone%E2%80%9D.jpgHow about those times when you feel frustrated or beat yourself up because you haven’t changed a behavior or achieved a goal you say you want? Perhaps it’s a change of behavior or a goal that you haven’t been able to achieve. You’ve tried with some limited success and you continue to backslide. Maybe you haven’t even taken the first step because you feel afraid.

So, let’s say there is a change you feel ready to make even if you feel afraid or resistant. You know inside that it is time to shift from thinking and talking about what you want into DOING. Being actively engaged in demonstration through action is a critical factor in manifestation when you say YES to what you want and who you are meant to be.

Common desires include:
* Reducing weight, living a healthier lifestyle
* Financial freedom, having a steady flow of abundance
* A loving relationship with a soul mate
* Health, energy, vitality
* Making money doing what you love
* Inner peace and joy

When we begin moving past our comfort level, our ego/mind begins to freak out with fear. Sometimes our panic is obvious. We feel physical sensations: heart beating fast, dry throat, shallow breathing, a sense of panic or urgency, or a knot on our stomach. When our conscious or subconscious thoughts, are fixed on imagined events that may or may not ever happen the future, fear can turn to panic.

Uncertainty, feeling out of control can send us zooming into sabotage. When people unconsciously feel powerless or “trapped” they look for ways to feel more in control which can often be projected by trying to control others. In the throes of fear and distress our human instinct is to grab onto something that creates the illusion of control so we can breathe a sigh of relief. We feel like we have been saved as if we were downing in deep water and found a life preserver to keep us afloat. Even though our relief might be a temporary fix, we feel back in the driver’s seat because our immediate sense of urgency has been calmed.

Another way we manage discomfort is to self-soothe in positive ways including: nurturing rituals, affirming self-talk, gratitude, spiritual practices, doing fun things, and connecting with uplifting friends. Or, we can negatively self-soothe through addictive behaviors such as: overeating, drinking, overspending, and overworking that ultimately sabotages our intentions. Sweets, carbs, and junk food are a great way to numb out. Repression becomes an automatic response to discomfort; a powerfull coping mechanism to manage whatever we want to avoid seeing, feeling, or thinking about. Numbing is a way we “get rid” of any feeling we don’t want to deal with. We know that we are choosing to do or not do will probably lead to regret and self-condemnation and we do it anyway…

What about the subtle unconscious ways our fears operate beneath the surface of our minds to create chinks that weaken our inner foundation and begin the erosion of our commitments?

Common forms of self-sabotage:

* Negative procrastination – wasting time, putting obstacles in the way of taking action towards goals, making excuses for delays, rationalizations, and creating confusion.
* Avoidance – getting sick, changing the subject, leaving the room/phone call, poor eye contact, being too busy, getting distracted, keeping people at a distance (emotionally, physically, spiritually), indirect or vague communication, putting things off due to discomfort or overwhelm, and excessive sleeping.
* Destructive habits – addictive behaviors, dishonesty, overindulgence, clutter, disorganization, overspending, overeating, overbooking, and self-neglect.
* Irresponsibility – excessive debt, risky behavior, lateness, missed appointments and deadlines, over-promising and under-delivering, breaking agreements/promises, forgetfulness, and tolerating things.
* Putting others before YOU – people-pleasing, remaining in harmful situations, inability to set and maintain personal boundaries, putting the needs of others before your own, and compliance.
* Negative self-talk – Shoulds, coulds, ought tos, musts, self-criticism and judgments, anticipating or expecting the worst vs. the best, scaring yourself with worst case scenarios, talking yourself out of trusting yourself, your wisdom and instincts, creating confusion, minimizing and devaluing goals….
* Living in drama – making the situation worse or bigger than it really is. Going into “your story” vs. what is really happening or true. Being in your story means, the energy is focused on the pain, difficulty, PROBLEM, old patterns of reacting that makes the situation overwhelming, impossible, HUGE, hopeless, pointless, powerless. This is a great way to abandon goals and works in tandem with negative self-talk and fears.

If we have become attuned to our “management patterns”, we can recognize the signals and use tools to restore a sense of inner calm and perspective without costing us additional stress or pain. (Tip: Slow deliberate breathing and bringing your attention to the here and NOW are two shifting practices that can reduce the intensity of fear. Fear thoughts focus on the future and coming back to the present is key.)

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Newsletter

BIZNESS! Newsletter Issue 86

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Cover Story
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Continued in BIZNESS! Newsletter Issue 86 >>>
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Continue reading these top stories in the BIZNESS! Newsletter >>>

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Categories
People & Relationships

Should You Care if Your Employees Love You?

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Article Contributed by Roberta Chinsky Matuson
As human beings, we have a natural tendency to want to be loved. But what happens when your desire to be loved interferes with your ability to lead?
People who gravitate toward leadership roles tend to be charismatic. They work hard at keeping their audiences captivated and enjoy the adoration they receive from their followers. This is all fine and good, until their desire to be liked, or even loved, begins to cloud their judgment. Here are some examples of how this can play out:
Colleagues rather than subordinates
In their quest to be liked, leaders drop their guards and become more informal with their employees than they should be. An example of this is when a leader joins his staff at Happy Hour. There is nothing wrong with sharing a beer with the team. However, things can quickly get out of hand when one beer leads to a six-pack. Before you know it, managers are sharing drinking stories from their college days. Throw in a few shots of tequila, and all bets are off.
To effectively lead, your followers must have a high regard for you. Sure, they may look up to you all evening, but will they still respect you in the morning?
Communicating versus commiserating
It is lonely at the top. There are few people who you can confide in regarding your hopes and fears. It can happen to the best of leaders – eventually they stop communicating and start commiserating with their executive team and sometimes with staff.
In these trying times, your team is looking for a leader. Someone who they are confident will be able to steer their ship through these choppy waters. The last thing they need to hear is a leader expressing doubt. If you find that you need a sounding board, consider hiring an executive coach or joining an association. Then be sure you return to the business of communicating the information employees need to hear, so when you turn around, you actually have people following you.
Are you doing too much for your employees?
Are you constantly picking up the slack for members of your team who are not cutting it? When doing so, do you take the time to explain how they can improve their performance? Or do you simply decide it is easier to do things yourself to avoid more conflict?
Conflict fuels improved performance and innovation. It can also strengthen relationships when both parties have an opportunity to have their say. Think about your own personal relationships – do you have more respect and adoration for those who are willing to call you on your actions, or for those that avoid conflict?
It is nice to be loved, but as a leader, it is more important to be respected.
About the Author
Roberta Chinsky Matuson is the President of Human Resource Solutions (www.yourhrexperts.com) and has been helping companies align their people assets with their business goals. She is considered an expert in generational workforce issues. Roberta publishes a monthly newsletter “HR Matters” http://www.yourhrexperts.com/hrjoin.cgi which is jammed with resources, articles and tips to help companies navigate through sticky and complicated HR workforce issues. Click here to read her new blog on Generation Integration http://generationintegration.typepad.com/matuson/. She can be reached at 413-582-1840 or Roberta@yourhrexperts.com.

Categories
Franchise

Opportunities Brewing in the Coffee Franchise Sector

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Article contributed by Franchise Direct
Franchise Direct, one of the world’s leading franchise portals, recently conducted an in-depth study of the coffee franchise sector. After thoroughly examining 29 Franchise Disclosure Documents, Franchise Direct has found that the coffee franchise sector is weathering the recession resiliently, bolstered by a product that is an integral part of American life.
Despite an early dip at the beginning of the recession, this $11 billion a year industry continues to grow and diversify, according to the Franchise Direct study. With coffee consumption remaining constant in this declining economic climate, coffee franchises continue to be a worthwhile investment.
According the study, the coffee franchise industry remains extremely competitive at the top and fragmented at the bottom. Starbucks is the industry’s leading coffee chain, with over 16,000 stores worldwide. Because of the accessibility and popularity of coffee, a franchised approach, boosted by an established brand identity, continues to be one of the most profitable options to profit on this product.
One of the most reassuring reasons to invest in a coffee franchise is the enduring success of the beverage. The Franchise Direct study quotes a recent poll that shows that coffee consumption actually increased last year among the lucrative 25-to-39-year old demographic, while it remained steady amongst 40-to-59-year-old’s. As the recession continues, we can safely assume that the popularity of coffee will continue unabated.
Coffee franchise businesses are also flexibly adapting to new American consumer habits. For instance, in recent years, there has been greater demand for environmentally-friendly products that do not exploit workers in the production process. Coffee franchises have been at the cutting edge of the Fair Trade movement, and with a range of organic goods, they are perfectly positioned to thrive on this developing $1billion industry.
The Franchise Direct study shows that location is the most important factor in a coffee franchise’s success. At the same time, mobile units or kiosks give prospective franchisees a low-overhead, high footfall alternative to the standard franchise unit arrangement.
Underpinning the recent success of coffee franchises is the growing popular consensus that coffee has a number of health benefits for drinkers. While perhaps once seen as unhealthy, coffee, as illustrated by authoritative studies conducted by researchers at Harvard and UCLA, clearly has health incentives.
People exploring franchises for sale will find that coffee franchises sell a product with broad public appeal that is seamlessly adapting to American consumer trends towards healthiness, social responsibility, and environmental sustainability.