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Business in the News: Facing Today’s Credit Card Crunch

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Article Contributed by Andy Lax

If you are a business owner, you have probably felt the pinch – if not a full smack down – from today’s faltering economy. Even more distressing, the situation may become worse before we turn the economic corner.

In a recent Washingtonpost.com article Retailers Report a Crisis in All Aisles, it was noted that retailers posted the worst November sales in 30 years according to the International Council of Shopping Centers. In fact, retail sales dropped 2.7% as compared to November of last year.

What is the impetus behind lagging sales? Simply, consumers are scaling back on their credit card spending. This is due primarily to:

  • Tightening of credit card lending (causing a 5% drop in consumer spending)
  • Recent increases in credit card interest rates and reduced credit limits
  • Consumers maxed on their credit cards or buried under credit card debt
  • Future economic uncertainty causing consumer frugality

In its 2004 – 2006 heyday, credit card spending enjoyed double-digit growth. However, as the saying goes, “what comes up must come down” and in 2007, annual growth dropped considerably to 8%. 2009 is not expected to fair any better with credit card spending estimated to rise a meager 3.3%.

The Domino Effect

Decreased consumer spending is causing a disastrous domino effect that is causing a tremendous strain on some retailers. In Retailers Report a Crisis in All Aisles, it was noted that retailers who have relied on consumers’ easy access to credit to purchase high-end merchandise such as flat screen TVs are faltering under the weight of decreased credit card spending.

The plight of Circuit City was placed under the spotlight to magnify the problem caused by consumers foregoing credit card use. When viewing the domino effect, the first domino to fall was consumer sales, followed by decreased inventory, as vendors tightened lending out of fear the company would not have enough incoming revenue to make payments. Decreased inventory further dissuaded shoppers from pulling out their plastic. This factor decreased sales even more, toppling yet another domino.

The New York Stock Exchange stopped listing Circuit City shares Dec. 15th as they nose-dived to an abysmal 19 cents. This is unfortunately a distressing “sign of the times” and could be in store (no pun intended) for other well known retailers.

On a brighter note, the Federal Reserve is in the process of instituting a program, which may assist retailers reeling from the current credit card crunch. It is in the process of buying an estimated $200 billion in securities backed by credit card, automobile and student loans in an effort to fuel markets running on empty.

Business Survival Training 101

Regardless if you head a large, medium, small or home-based business, your primary concern no doubt is to ensure your company survives and hopefully thrives during today’s economic downturn.

Instead of becoming discouraged, try to view the current credit card crunch in a more positive light. It has been estimated that the average credit card debt per household is $6,528 – an increase of an astounding 138% over the last 20 years!

Can a mountain of credit card debt and the financial, emotional and physical strain that goes along with it be considered healthy? Many consumers are now forced to live within their means, which consumer advocates believe to be a good thing.

You are probably wondering how this can possibly benefit your business. Although there will be challenges, it essentially boils down to learning how to adjust to the new reality of decreased consumer spending.

Although consumers are currently using credit cards less, it is still imperative to allow for this option. Credit cards remain the preferred mode of payment for most individuals and accepting plastic is absolutely essential when selling your goods or services online or offline.

If you are not currently accepting credit cards, but wish to do so, make certain to do your homework before choosing a merchant account provider (MAP), necessary when accepting plastic for purchases. Make certain to compare and contrast fee structures offered by numberous MAPs to locate one most compatible with your business needs and offers the best “bang for your buck”.

If you already have a merchant account, go over your statements with a fine toothcomb to pinpoint areas where you could potentially save money. Speak with your MAP to see if your account is still in step with your business. Are there areas where certain fees could be decreased?

There is also no harm in shopping around. Think about how many times you have done just that when looking for a better deal with your car insurance on sites like this for example. Is there a MAP offering better terms than what you currently receive? Even if your present merchant account has an early termination fee, you may discover that switching to another MAP will save you money in the long run.

In today’s stunted economy, it is more important than ever to be creative and devise methods to increase the value of your goods or services. One sure fire way to do so is to reduce your overall operational expenses. The money you save could then be passed onto your customers/clients in the form of buyer-friendly prices – sure to give you a leading edge over your competitors.

About the Author
Andy Lax has worked in the credit card processing industry for over five years and is now an Account Manager at IntelliCollect, a merchant account provider that enables business owners to accept credit cards and electronic checks.

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How to Get Free Government Money 101

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I should not be providing this information, the government should.
I believe the IRS should include a book like this to every American when they send you your tax forms. That way every American would know how to get their tax money back, because even though I call this “free money,” it really isn’t free. This is money that you gave to the government to pay your taxes and now you can get it back.
Here are a few basics on Government Money Programs that everyone should know:
1) Only 12% of Gov’t Money goes to the poor
Most Americans think that government money programs are for everyone else… for instance only the poor, minorities or friends of the president.
But, only 12% of Government Handouts go to the poor
And only 25% of Government Programs Have Income Requirements
The rich and famous, including Donald Trump, H. Ross Perot, Dick Cheney and George W. Bush, all made millions as private citizens with the help of government money programs. If they’re eligible, you certainly should be too.
2) Only 20% of Free Money is called “Grants”
Most free money programs are not called “grants” by the government, they’re called “direct payments.” It is very easy for someone not to know all about government jargon, but just a little research can clear up quite a few misconceptions. Don’t discourage yourself by focusing only on “grants” and dismissing the other 80%.
3) 50 Million people don’t even know they’re eligible
This is one of the most important points to keep in mind: The Government cannot and does not advertise programs that offer free money. But it’s out there, lots of it. You just have to invest time finding the programs.
4) You can’t make one phone call and just get a check in the mail
Getting government money is like looking for a job. When you knock on one door and ask about a job, and they tell you that you are not qualified, you don’t go home and wait for them to change their mind.
No Way. You would never hear back. You have to be persistent and go from one company to the next until you find a good fit.
5) Free Money keeps growing no matter who is sitting in the White House
We constantly hear about government budget cuts and that makes people believe that government money is going away or will soon be gone. But every year for the past 30 years the amount of free government money given out to individuals keeps growing. It keeps increasing no matter if it’s the republicans or the democrats who are in charge. With the new Obama administration especially, we will be seeing more offered to small business and entrepreneurs in the form of government money programs.
6) You certainly don’t need a professional grant writer
Nine out of ten times you will not need help in filling out an application. Most free money programs to pay for your bills, education, health care, housing and even business require just a few pages of blanks to fill in.
If you have trouble filling out an application for money, don’t hire a consultant.  Go to the office that is handing out the money.  The are obligated to help you fill out your application and they are in the best position to know what should be included.
7) You can apply for as many programs as you like
Don’t worry about how many programs you can apply for,  If you see a program that you think might work for you, apply to it. Sure there are some programs that give money for specific reasons and if you get accepted from 2 separate places you will have to refuse one of the offers, but that’s still a nice position to be in.
8) It doesn’t always matter if it sounds like you don’t qualify
Here’s an example:  “All the money is given out by August 30th”: The end of the accounting year for most government agencies September 30, but the agency can start giving out more money beginning October 1, and you can be the first in line.
In all likelihood, you can wait another 30 days for your money.
9) Information can often times be out-of-date
Every day programs come and go. Every day people change their address, phone number and websites. It is just a fact that these things happen in our modern society.
But remember, if a listing leads you to a non-working number or website, it does not necessarily mean that the program is gone. Call the agency listed in the program description and ask.
10) Don’t be intimidated by the idea that the applications are all long and confusing
Getting an application that is only one-page long is not unreasonable at all.  Many of the government programs that give our grants really don’t need a lot of financial information because unlike a bank they are not worried if you don’t pay the money back.  They don’t want it back.  It’s free money.

MatthewLeskoPhoto.jpgMatthew Lesko is a best-selling author, government money expert and business mentor. His website, MyAmericanBenefitsPlan.com, is an interactive, online resource that serves as a hub linking entrepreneurs and free-money-enthusiasts alike. Lesko’s 30 years of researching government money programs and his extensive video talents are all going into the web service. Lesko holds free, online seminars on Wednesdays, live at UncleSamLive.com.

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Solutions Stars Video Conference

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The “Solutions Stars Video Conference” will be held on October 29, 2008 from 1 p.m. until about 3:30 p.m. EST and will feature a series of videos and live discussions with 30 leading small business and marketing experts. Small business owners and entrepreneurs will be able to view streaming videos and chat online about how to use the Internet to benefit their businesses. Select video participants will also be in the chat.
Video participants include best-selling author Tim Ferriss, Zappos CEO Tony Hsieh, and All-Top -Co Founder and top blogger Guy Kawasaki. Marketing experts Steve Hall, Darren Rowse, Chris Brogan, Wendy Piersall, Lee Odden, Toby Bloomberg, Brian Solis, Liz Strauss and others will also share their stories and advice.
Visit http://www.solutionsstarsvideo.com/ for updates, including our full programming schedule with five main content areas:
– Start with Listening
– Building Web Presence
– You Need a Twitter Presence
– To Blog or Not to Blog
– Rising Above the Noise

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Learning from America’s Best Companies

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America’s Best Companies (http://www.americasbestcompanies.com) is dedicated to helping small businesses stay in business, grow their business, and make more money in their business. ABC is built on the strong belief that small businesses are the most important companies in America. After all, the American Dream has always begun with the idea of starting a small business.
To carry out this mission, ABC provide small business with the tools, opportunities, and resources to compete with the existing mega-marts and giant online retailers. They strive to educate the point-and-click generation of today to recognize the unique products and personal services that local business owners provide every day.
For example, ABC provides advice on how to advertise your business through ABC’s own Internet directory and several big-name local search sites like Yahoo, Yellowbook.com, and Yellowpages.com. Second, ABC publishes and hosts an easy-to-build website for your business where you can post in-store specials, coupons, photos, videos, and more. Third, the ABC website provides discounts on a variety of goods and services for all of your most common business needs.
A subscription to the America’s Best Companies magazine will provide you with the most current information and advice available to help you run your business as efficiently as possible. There is a whole lot of helpful information and resources that small business owners would be glad to capitalize on.
http://www.americasbestcompanies.com

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Free Webcast – 5 Tips to Staying on Top in an Economic Downturn

Our friends over at SBTV.com alerted us to this not-to-be-missed, free event:
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Free Webcast: 5 Tips to Staying on Top in an Economic Downturn! Tune in to SBTV.com on Wednesday, May 21st at 12:00 p.m. EST, as Susan Wilson Solovic hosts this very special episode of “Power Lunch with Susan” for time tested tips on starting and growing a business during the tough times. Susan features online micro lender Count Me In and guests Make Mine a Million Dollar Business winner, Francine Glick and Latin Media Dynamo, Nely Galan. Click here for all the details.