Accounts Receivable Factoring - A Viable Cash-flow Solution for Small and Medium-Sized Enterprises

The pace of change in today’s business environment is inarguably staggering. Growth of e-commerce; changes to business structures; evolving relationships; changes to funding arrangements; access to capital and its sources. All occurring at increasingly exponential rates. Fast. The fact that there is more computing power in the average notebook computer today than it took to put a man on the moon should illustrate how fast things change, and whether in senior management or a business owner you need to keep pace.

In particular, you must stay abreast of changes in your competitive environment, and remain fully apprised of mechanisms that will enable a response fast enough to keep you in the game. This article will look at one of those mechanisms, access to capital and through that, free cash flow. In doing so we’ll use an intuitive framework, peppered with some economics. Why? Intuitive analysis is ideal for answering specific questions; in this case ‘What will best enable my firm to manage rapid changes to competitive economic conditions and stay in the game?’ And I’ll use economics because of Steven Levitt, America’s most outstanding economist under-40, who along with Stephen Dubner considers that ‘if morality represents how we would like the world to work, then economics represents how it actually does work.’

By speaking to specific anchor points, strategic issues affecting the access to capital problem can be explored and initiatives developed to allow a timely solution. In short, it’s the fastest and most accurate way to answer the question you face, because it’s easier to understand and doesn’t get bogged down in extraneous, unnecessary analysis.

One of the anchor points in contemporary business is access to capital, especially when it helps maintain free cash-flow. In many respects they are one and the same thing, the difference merely being access to capital is a necessary precursor to free cash flow (you can’t use it until you have it). And everyone needs it. Payroll, materials, overhead, and debtors taking anywhere from 45 to 120 days to settle their accounts, using your firm as a surrogate line of credit.

Access to capital becomes an even larger issue in the business environment described earlier, where speed to market and the ability to ‘tool-up’ (increase production) are crucial to meeting ever shrinking delivery timelines. Many of us have experienced the elation of being awarded a large tender, something that will fill the order book for the next six months, immediately followed by the hangover that comes with the realization that the firm will struggle to fund the project based on existing and forecast cash flow.

Small-to-medium enterprises encounter particular problems when it comes to cash flow and capital access to fund growing operations, to the point where lack of access is an issue that can threaten continuing operations, even in a rising market. Balance sheets take time to build, and it is against this security that banks will lend.

Developing initiatives to tackle this problem involves looking at some existing options and making a comparison, arriving at a decision that best enables a solution to the problem at hand. In this instance, a comparison of bank funding against invoice factoring provides insight into possible solutions for the capital access / cash flow problem.

A Vending Machine Distributor – Find Out What How This Person Can Help You

A vending machine distributor is a person that sells and delivers vending machines of all kinds. If you are planning to get started in the vending machine business, you do need to start with a distributor in order to get the machines that you need. The distributor could be a single person that sells the vending machines out of his/her basement or it could be a large company with salespeople and a catalog that you can browse through. The vending machine distributor works with the vending machine manufacturers to bring you the machines you want to use in your business.

When you want to start a vending machine business of your own, the first thing you need to do is find a vending machine distributor that has the type of vending machines you want to start with. The problem is knowing how and where to find the distributor and what vending machines are right for you. Many of the distributors you contact can give you valuable advice about what types of vending machines would be best for your area. The distributors that deal with your area will also be able to give you advice about getting into this type of business opportunity. Vending machine routes may be available where the machines are already in place.

As an independent vending machine business owner just getting started, you may not be able to deal with the manufacturers of the machines. This is where a vending machine distributor can really help you. These people know the manufacturers of all the different types of machines and may be able to put you in contact with someone that has used vending machines for sale that are in excellent condition. Since the distributor is usually a good client of the manufacturer buying many machines, for you and others taking advantage of a vending machine business opportunity, he/she will also be able to get a better deal on a new machine.

The Internet is your best source of finding a vending machine distributor. When you come across a business opportunity, vending machine distributors will be able to get you any type of vending machine you want. These people may also be able to supply you with the products that you need for stocking and restocking the machines. This is one factor that you do have to consider when you want to start a vending machine business – how difficult or easy it will be to get the products that you need. You also have to consider the location of the distributor in relation to where you are so that the costs of shipping the machines and the supplies will not be too expensive.

Just looking at the website of the vending machine distributor will give you a pretty good idea of whether or not this person is right for you to deal with. Check to make sure that the distributor keeps the website up to date and that he/she does have the latest vending machines available. Once you find a distributor that you think you might be able to work with to start a vending machine business, you should contact him/her by email or telephone to get further information. In addition to finding a vending machine distributor, you do need to check the references to make sure that you will be dealing with a reputable distributor.

A small Small Business summary

Small business is a term that is used day-to-day. That is because in the past decade the rise of small business has been larger than in any other decade prior. This is largely due to the increasing number of services that are available to small business owners, to enable them to keep their business running.

There really isn't any guidelines for when the term small business is used, however it is simply defined as a business which has a small number of employees. How few employees is debatable, and the definition of when a business changes from a small business to a larger corporation varies both by country and industry. This number is generally less then 100 employees.

As mentioned before small businesses due to their nature, are in most times sole proprietorships, partnerships, or privately owned. Common in may countries, small businesses, are most oftenly related to: accountants, restaurants, guest houses, photographers, small shops, hairdressers, tradesmen, solicitors, lawyers, small-scale manufacturing etc.

Small businesses in often cases are located in private homes, for two main reasons. The first is because it is economical and in most cases convenient. The second reason is that there are several benifits with tax,etc for having your business in your home.

Running a small business is an exciting venture, and a great way to introduce yourself into the business world, and to gain business sense. If you are interested in starting your own small business, I would recommend having a talk with a local lawyer or accountant, who will be able to answer questions that are specific to your local area. Good luck with your new venture!

A Phone by Any Other Name...

I recently left the company I was working for and took a new position with a new employer at a much higher salary.  My business is IT, and I left the comfort and stabilty of my old job to work for a startup firm which I think will be a big success.  They knew they were going to have to pay for quality personnel so they had no problem meeting my demands in terms of salary, benefits and stock options.  What I didn't realize is that while they aren't skimping on compensation, the office environment they provide leaves a lot to be desired.

I can put up with the miniscule cubical.  I can live with the lack of natural light (although I feel like a cave troll).  I can even do without the cafeteria, water cooler, and coffee maker.  What I really miss is my old phone. 

You see, my old phone was indeed, not an "old" phone.  It was a multi-line handling, LCD displaying, caller IDing monster that gave me more options than a new car salesman.  My "new" phone has none of those amenities.  There is no transfer or hold button, no screen to display who is calling, no headset and no electronic directory.  In short, the only difference between this phone and a Garfield phone you might buy at Spencer's Gifts is that this phone isn't shaped like a cartoon cat.  My job would be so much easier and my days so much more productive if only we had a real office phone system in place.  The current system is so poorly automated that only a very small percentage of the calls I get are actually meant for me.  Likewise, I get several E-mails a day asking why I haven't returned phone calls in regard to messages I never received.

I guess the old addage that "you don't know what you've got until it's gone" really holds true in this case.

Since I came here, I have actively lobbied to have the old phone system replaced, but to no avail.  I think I may be the only one here who knows what he's missing.  Oh well...I'm sure I'm not the only one out there who has experienced this.  Maybe you too have lost a beloved phone in a career move.  I sympathize with you.  I'd leave my number so we could comiserate, but you'd probably never reach me anyway.

A Call to Action

Because of a recent boom in business, my company needed to update our office phone system. We had a very nice system in place already, but our business had tripled within a matter of months. Since we rely on phone orders for the vast majority of our sales, we needed to upgrade in order to handle the increase in call volume. We were lucky to have a great relationship with our telephone equipment provider, as within days we were able to have a new system ready to put in place. It's not often that businesses find themselves in situations like this, but when they do come up, it's important to know that the companies you have chosen to do business with are capable of meeting your needs in a timely manner. 

Prior to this happening, we had a trunk study performed, after which we were told that we were losing business as a result of not having a new phone system in place. Anyone who has ever run a business knows that losing money because you are ill equipped to handle your customer's needs is the worst way to lose money. Being able to make a phone call and knowing it would be taken care of quickly and efficiently was a great relief to me. I knew that with every passing day, thousands of dollars were being lost and that's something I couldn't afford to let happen. The whole situation made me think about the importance of knowing qualified vendors who can get you the products you need, when you need them.

I soon began looking into other areas where we were dependent upon other companies for goods and services to see if we were utilizing vendors who could facilitate the changes our growing business was experiencing. After a long, hard look, we decided to switch shipping companies and to switch to a new overnight call center operator. It's not that our needs weren't being met at the time, but that if things continued to grow, we would likely outpace our current vendor's ability to provide service. Being proactive in your business relationships is just as important as being proactive about your business. After all, most companies depend on other companies to make their operations run smoothly. I encourage all business owners to seek out the service providers and vendors that can handle your needs both now and in the future. When your business grows, you'll be happy you did.

Stop the Stupid Stuff In Your Business

We are living in a world of change. Shift happens! Competition comes from all over the world, which means that many American businesses are in trouble.

Many decisions are being made that are contrary to both good business sense and building customer loyalty.

Most organizations' marketing is usually an exercise in figuring out what to do to get current or potential customers to spend more dollars with them.

I'm suggesting that instead of thinking about what to do, figure out what to stop doing. In other words, stop doing the "stupid stuff."

Not doing the stupid stuff means finding out what prevents customers from spending money with you and making sure that that action or reaction never happens again.

Here's an example of what I call "stupid stuff." Some airlines now want to charge customers who want to speak to a live agent.

That's stupid stuff in two ways. First, they've chosen to penalize customers who want to continue getting what they've always gotten - one-on-one attention. Worse, they've done it by saying they will charge more for this previously standard level of service. How many customers will they lose because of this decision? I know of at least one.

There are more subtle, but no less damaging, stupid things businesses need to stop doing.

Take, for example, the new Wheaties boxes. General Mills recently introduced Wheaties boxes with photos of the U.S. Olympic gold medalists. One was missing: Paul Hamm. Why?

This was General Mills' response to my inquiry:

"Selecting a Wheaties Champion has never been an easy task, especially when we have witnessed so many outstanding performances by so many championship athletes. But it simply isn't possible to honor every champion on the Wheaties box."

So they leave off the first U.S. man to win the Olympics all-around gymnastics championship in one of the sport's greatest comebacks? His return from a disastrous fall to a near-perfect high-bar routine won near-universal praise and, for most of us, defined the word "champion."

But there was controversy. As most of you know, a South Korean gymnast claimed that a scoring error cost him the gold and appealed to the Court of Arbitration for sport. The court recently ruled that Hamm can keep the gold medal.

Even though the medal was disputed, it was not because of anything Hamm did or did not do. Still, General Mills decided to do the "safe" thing. But by being safe and leaving out Hamm, Wheaties is alienating the millions of customers who see him not as controversial, but as a hero, and losing customers in the process. Now that's "stupid stuff."

So start stopping! Stop saying "No" and start using the word "Yes." Stop charging for services that most of us think are free.

Find out what exasperates, discourages, hassles or confuses your customers and stop it.

Powering Off or Power On?

Do you take your laptop on vacation?  Do you sometimes hate your cell phone or your Blackberry?  Harris Interactive recently reported that one-third of vacationers take their laptops on vacation.  During a Sunday meal at a restaurant recently, I observed a man sitting with his family talking on his cell phone -- obviously about business. He was not happy neither was his family! 

To paraphrase Charles Dickens, It is the best of times.  It is the worst of times.  Certainly that applies when it comes to connectivity. Stories of 9-11 victims being able to communicate with family members in the last minutes of their lives warmed my heart, while the story my friend told of her mother answering her cell phone in the delivery room during the birth of her grandchild chilled my soul. 

How grateful I was for my cell phone when I came across a young woman stalled on an interstate without one, and I could immediately get help. How convenient it is on vacation to use the Internet to explore the options for entertainment in the area on a rainy afternoon, and get directions to find it easily.  How comforting to know that my family can reach me in case of an emergency or something to celebrate! -- regardless of where I am in the world.  The same can be said for my colleagues. 

So here`s the question:  Should you take your laptop on vacation?  Should your cell phone be on 24/7?  Clients often ask, What should I do?  My answer:  That`s the wrong question.  The question is What will you do?    Maybe an even better question would be What would you like to do?  Perhaps the best question of all is What action will bring you the best results?   In order to answer that question, you have to take the time to answer What ARE your best results? 

Repeatedly I have emphasized that one definition of organization is controlling the things you can control, so you can cope with the things you can`t.   In the complex world in which we live, especially with the level of connectivity available, it`s easy to fall into the trap of feeling that we are victims of other people. I cringe when someone complains about having to answer their cell phone.  Says who?  If you don`t want to be reached, you can power off.  If you have to be reachable because your job requires it, then the question may be Am I in the right job?  Or, have you simply trained people that you are always available.  Customer service is great, but it doesn`t require 24/7 response.  It requires good communication.  It`s highly frustrating to leave a message and get no response for days, but few situations would suffer if the response came one hour later so you could have lunch with a colleague without interruption. 

Connectivity can be addictive.  My daughter, who has her PhD in counseling, reminded me that an addiction is something that reduces the quality of your life and the people around you. 

So what does all this have to do with productivity?  My passion is helping individuals and organizations create and sustain a productive environment so everyone can accomplish their work and enjoy their lives.  When used appropriately, connectivity does help you accomplish your work and enable you to play. It can also undermine your priorities at work, destroy your health, and poison your relationships when used inappropriately. 

The issue is not whether you take your laptop on vacation or leave your cell phone on 24/7. For some people, the ability to check e-mail once a day on vacation brings peace of mind and can be done when others are sleeping or swimming. For others, the whole idea of a vacation is not taking your laptop. There is no right or wrong.  The question is whether your choice is enhancing or diminishing your life and the lives of the people around you.

So Power Off or Power On? it`s truly up to you!