Archive for 'Small Business'

Internet Ecommerce Business – Internet Marketing

Sunday, June 28th, 2009 at 2:55 pm  
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If you were to ask any Internet business owner about how well organized their operations are, they’ll more than likely say, Possibly not.

In fact, many organizations throw up an expensive website using all the latest bells and whistles, only to find it a generally unsatisfying experience. Apart from the technical versus sales and marketing issues of the website itself, many organizations, both in terms of appropriate behaviors, as well as of effective organizational designs has been sadly neglected by many established site owners.

You may have a business site with dedicated Web staff, yet it is poorly integrated within your parent organization and tasked with non-defined roles.
A simple question needs to be asked, Do you have a networking group directed by a chief Web officer and composed of dedicated staff for each business function? If not, then depending upon your organizations’ size and abilities, you’ll need to implement such a group or outsource those functions.

Typically, many conventional site owners have acquired organizational habits that are not well aligned to the needs of internet marketing. It should be noted there are various undesirable traits or behaviors found in many organizations that must be guarded against.

 
You might find that increasing complexity in your company has resulted in inflexibility and slow decision making processes. There is also a tendency towards internal conflict and stratification, as well as a leadership that would tend to emphasize capital investment as a solution to all problems.

 
The movement towards networking with a specific group, which characterizes a typical consumer goods business, will carry with it limited coordination among your departments and divisions resulting in a weakened sense of market trends and increased dissatisfaction.

 
These features are in direct conflict with what you should know about the cultural characteristics of pure successful ecommerce businesses. An Internet business is predominantly a flat organization with quick decision making, where risk taking is encouraged and failure is merely an education.

 
Employees may tend to work long hours at the office by choice and are very self disciplined. Typically, such companies use guiding principles rather than procedures and tend to lead by example. When these two types of cultural environments are brought together, unexpected and perhaps dysfunctional behaviors must be expected to emerge.

Given the cultural and organizational differences between new and old ecommerce businesses, the way in which you, as an established site owner should set up and manage Internet operations, is therefore extremely important.
 

One factor to consider, is that small Internet businesses are more flexible organizationally. You should consider that ecommerce has provided greater electronic quality for smaller businesses in relation to their larger competitors.
 

You will need an increased willingness to seek appropriate alliances and partnerships, plus consider organizational designs, company spin-offs, etc., that will provide convergence to the integrated business model required to overcome these mismatches in culture and outlook.
 

The many advantages derived from the Internet must be exploited both within and between existing sectors of your offline business. With the ways in which networked organizations are evolving, it should be realized that only those retaining an Internet culture, in a parallel or networking group style of operation, closely identifies with the ecommerce aspects of a business’overall objectives will become more successful.

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How To Maximize The Benefits Of A Networking Event?

Sunday, June 28th, 2009 at 2:54 pm  
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Everyone needs to network: entrepreneurs, small business owners, job seekers!
But does everyone maximize the benefits of networking?
The purpose of networking is to build relationships so you will get leads from someone you know, or from someone who knows someone you know. When you attend a networking event the purpose is to meet business people from various industries to get exposure.

What networking is not?
Networking is not a numbers game; you need to focus on quality and not on quantity. Some people think that they had a successful event when they have collected 30, 40 or more business cards, but they are missing the real point. How many of these 30 or 40 people will you be able to follow-up? How many of these 30 or 40 will follow-up with you?
What is the purpose to collect a huge number of business cards that will end up in a shoe-box on one of your shelves?
Networking is not a place to sell. You have to be prepared to give your elevator pitch to introduce yourself, not give a sales pitch. If you attend an event expecting to find a client to close a sale right away, chances are you will be very disappointed. Furthermore the other attendees might not appreciate your attitude.

What networking is?
Networking is more than just shaking hands and collecting business cards.
It is about building relationships and being committed to help other business professionals.

It is about the quality of your contacts and not the amount of your contacts.

It is about consistency. The best is to belong to two or three groups, attend their events regularly, get to know the other members, and in exchange they will get to know you and trust you. When you see the same people over and over you develop a strong and relationship with them. The benefit of building relationships with a committed group of people will result in new leads for your business.

It is about patience. The benefit will not appear overnight, and this is why you need to follow up with your contacts. Networking is like dating, one meeting is not enough to know someone. It will probably take some time, some meetings, some lunches or some drinks before you really start doing business together.

Here are some tips on how to maximize the benefits of a networking event.
• Be prepared when you attend a networking event. Know your goals. Are you looking for leads, partners, new clients, services?

* Bring your business cards and a pen to take notes on the back of the cards you receive.

* Have an effective 15 to 30 second elevator pitch. Learn how to sell yourself before your services or products. People want to hear about you first and when they know you and trust you, they will buy your services or refer you to someone else.

* Have a brochure and/or a web site. Some people will probably want to hear more about your business later, so give them the opportunity to get the information they are looking for.

* Meet people, ask about their business or services. Be curious and ask about them. people love to speak about themselves, so ask questions and listen to their answers.

* Be a problem solver. people will be more interested in you if you tell them how you can solve their problem instead of just hearing your story.

* Go to people; don’t wait for them to come to you. Some people are very shy, they will be very happy if you make the first move.

* Go to events with a friend, a colleague, a client, and introduce people to each other.

* Send a thank you note or email to your new contacts. Thank them for their time and reintroduce yourself in a few lines. They met lots of people during the event and your business card doesn’t say everything about you. So it is good to reinforce your introduction.

* Give them the link to your web site. Tell them about your newsletter, if you have one. This is the best way to stay in touch on a regular basis.

* Schedule follow-up meetings with the people you had a good connection with, or if you think that you can help each other.

* Do it again and again. You will see that networking can expand your contacts, which will definitely help grow your business.

(c) 2006 Biba F. Pédron

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Joining The Conversation

Sunday, June 28th, 2009 at 2:53 pm  
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Brand marketing is all about enhancing the mindshare of one’s products or services. The aim is for your brand name to be at the top of the consumer’s mind at the mere mention of generic terms relating to your company’s services. Arguably the best way of keeping that mindshare is by having a constant presence where your customers are. In this day and age of electronic commerce, there’s no better place to turn to than the World Wide Web.

Markets are conversations, so it is said. And the Web is perhaps the biggest conversation taking place, with exchanges of information going about the world in lightning speed, as people please-whether they be in email messages, forums, chats, or blogs. How people talk about your brand on the Web can make or break your reputation as a company, or your brand’s reputation as a product or service.

This is where blogs come in handy. The advent of the so-called Web 2.0 ushered in a concept previously unheard of in media and related industries-the massive democratization of content. Web 2.0, among other things, basically lets the consumers of information become the creators of content themselves. The Web is moving away from content with central editorial control, such as newspapers and magazines. Today’s most popular websites are not those controlled by one central group, but include mostly community- and enduser-managed sites, such as Wikipedia and DIGG.com.

Blogs let any individual or group join in on the big conversation. You write about anything online, and someone will eventually read your posts. That person can choose to talk back, and if so, a conversation is started. What’s great is that this conversation is open to the public, and anyone can join in or at least read what’s been going on.

In starting a blog, you can talk about your company’s services, or about the industry you are presently in. It would be fantastic for people to read what you write, and to respond by writing on their own blogs, or commenting on yours. You now have a direct line to your consumer-base. Isn’t that great? You are now able to get a feel of what the consumer wants. What’s more, your presence on the Web boosts recognition of your brand.

Consider adding more people to your army of bloggers-employees, partners, clients (or even hired freelancers), and the effect is multiplied. Your company is no longer represented by a stone-cold establishment. Your brand is represented by names, by faces-that of bloggers!

One notable success story in a “brand” blogging endeavor is Microsoft, the software giant considered by many people to be the “evil empire.” For so long, Microsoft has been the epitome of the stone-cold establishment. It had no human face, save for key persons like Bill Gates and Steve Ballmer-executives and officers whom people don’t really know. Microsoft’s brand name had also been suffering because of anti-trust lawsuits being filed here and there. Something had to be done, or Microsoft’s brand might be further associated with “evil.”

In its desire to shift away from all this, Microsoft, in 2004, decided to let employees blog publicly-about their work, about technology trends, about anything under the sun. One mid-level manager by the name of Robert Scoble, stood out, with his profound views and innovative ideas on technology. He was able to successfully communicate with the rest of the world about the inner workings of his company, and along the way dispelling myths about the company. He is now considered to be the persona of Microsoft in the blogosphere. Blogging has now become part of his job description. He is also one of the world’s most popular blogging personalities.

Any business enterprise-no matter how big or small-can use blogs to the advantage of their brand. Whether you’re a startup needing exposure, or you’re an established company that wants to better relate to shed its stone-cold façade in favor of a more human approach to doing business, blogging will definitely help your brand go a long way.

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Help Your Small Business Succeed With A Credit Card

Sunday, June 28th, 2009 at 2:53 pm  
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One of the many difficulties of starting a small business is gaining access to capital during the startup phase. With the large growth in small specialty businesses across the country, credit card companies are beginning to design special programs to help this new breed of business achieve success. For even those small businesses that have access to capital, the perks and benefits associated with small business credit card programs, can still be useful to help you compete more effectively in the marketplace. Below are just six of the many ways in which a small business credit card can help your business to operate more smoothly and improve your bottom line.

Ease Your Cash Crunch
A small business credit card can ease your business’s cash woes. Through the development and implementation of a sound financial plan that utilizes a credit card you can guarantee that your business will always meet payroll, be able to purchase inventory on an as needed basis, and manage both seasonal and business fluctuations without depleting your cash reservoir. Another added advantage is the cash advance feature, which allows you to withdraw cash from an ATM to cover emergencies and other unanticipated expenses.

Unlike a personal credit card, a business credit card also provides a business size credit line, which is substantially higher.

Keep Track of Business Expenses
Through the use of a credit card, you can, with little to no effort, separate your business expenses from your personal expenses. This allows for easy identification of tax deductions and filing of accurate income tax returns.

Secure Multiple Cards
You can also secure more than one card through small business credit card programs. This allows you to give employees the authority to make purchases while freeing up your schedule for more pressing issues. You can also do this with ease since you are also given the ability to set spending limits for different employees, which will further help you to control your expenses.

Access Free Business Resources
Anything free is good! Some credit card companies also provide clients with a wealth of resources to help manage cash flow and develop good record keeping procedures free of charge. Extensive reporting is conducted on both a monthly and bimonthly basis to help you track your expenses down to the penny. Additionally, free business checks and electronic funds transfers are also available.

In addition to that, you can also access reports, data and advice on developing business and marketing plans, conducting market analysis, and pricing products through a company’s web site. You can also increase your knowledge of other products and services like software programs that can help your day-to-day operations run more efficiently.

Build Credit to Qualify for Larger Loans
Obtaining a credit card and using it wisely can also be a stepping-stone to help your business qualify and secure a loan with a major bank or venture capitalist firm. By establishing a good relationship and credit history with a company that also offers other products and services, it’ll just be a matter of time before other cost-saving services are thrown your way.

Perks and Rewards
Perks and Reward Programs designed especially for small businesses are by far one of the best features of a small business credit card program. Small businesses can earn airline points and cash back rewards just like the big boys. Discounts are also available through select merchants like FedEx and Staples, which can result in huge cost savings for supplies and other operational expenses. Some companies also go an extra mile by providing rental car and lodging benefits.

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What Is A Notary Signing Agent And How Do You Start A Business?

Sunday, June 28th, 2009 at 2:52 pm  
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A Notary Signing Agent is a Notary Public who has acquired a familiarity and understanding of mortgage loan documents either via experience or training. This individual will work as either is hired as an independent contractor for signing agencies, or as a self-employed person receiving assignment through his/her own marketing and advertising efforts.

The job consist of ensuring that real estate loan documents are properly executed by the borrower(s), notarized, and returned promptly for processing to the title or escrow officer. This is an important and vital service for borrowers and closing agents, without which a mortgage loan transaction would not be able to be consummated.

The Statue of Frauds and the Patriotic Act seek to maintain integrity of a signerâ??s signature to authenticate a document, and to identify the borrower for tax reporting and anti-money laundering regulation. This is significantly role for a notary very important, now that so many more transactions are being conducted online or by telephone.

A Notary Signing Agent will travel to the customers home or office at their convenience to execute loan documents instead of having the borrower interrupt their busy schedule to drive to a the title company, or escrow agentâ??s office.

This convenience allows all parties to the transaction be more productive and in any cases reduce the settlement cost. Closing agents have discover this is a much preferred means of doing business, allowing the borrower to review the documents in the privacy of their home or office while increasing the volume of loan a closing agency can handle.

Your primary duties will include: answering phones, customer service, some filing, notarizing documents, networking and marketing your services. You will be required to pass a test or exam sponsored by your state’s governing agency to obtain a certificate or commission. At times being a Notary Signing Agent can be fast-paced and require flexibility and patience.

To really be highly successful as a Notary Signing Agent you must be reliable, honest, willing to learn, a good communicator, work well with others, enjoy dealing with people, and be somewhat computer literate. Being multi-lingual is a great advantage, as it increases the population of people you can serve.

One of the biggest challenges beginning Loan Signing Agents face in getting their business up and running is marketing. There are just too many tasks involved in setting-up, managing and marketing a new business. The list of tasks seems daunting and never-ending.

This is what stops most beginners, the amount of time, energy and effort and needed to develop the business and start getting regular clients that pay well and promptly. One of the easiest ways to get your practice off to a good start is to promote your service online through a high-traffic notary portal. Title, insurance, mortgage lenders, medical related industries, traffic schools, auto dealers, bails agents and the general public depend on these sites to find notaries daily for loan signings and other general notarial related work.

This is the quick means to marketing your notary practice and giving your business a jumpstart, while you work to develop long-term business relationships. Plus you get a webpage as part of the price.

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Where To Find The Perfect Business To Buy

Wednesday, June 24th, 2009 at 10:25 pm  
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You dream of owning a business and experiencing its many benefits – freedom, power, wealth, and fulfillment. But you don’t want to start a business on your own. There’s too much risk and uncertainty. Plus, you don’t know what you would want to do that could be successful.

Instead, you want to find an existing business or a proven business idea that you can operate successfully. But the million dollar question is: “Where do you find it?”

There are several methods of finding a business to buy, and each has its own benefits. Here are some options to consider:

Word of Mouth

This method of finding the perfect business to buy is very much chance-based and consists of someone telling you about, or you driving around and seeing, a business that is for sale. Due to its nature, you are exposed to a very limited number of businesses. And unless you are very lucky that one of the few discovered in this fashion is exactly what you want, this method is not very effective at finding the perfect business to buy.

Classified ads in the local newspaper

The old-fashioned method of finding a business to buy is to look in the classified ads in the local newspaper and see if any catch your eye. This is a very difficult way to find a business to buy for several reasons. One, the number of businesses-for-sale listed in the classifieds is very small compared to the overall universe of businesses that are for sale at any time. Two, classified ads typically present you with only three lines of cryptic text to give you background on the business. And three, classifieds do not have a search function so you have to spend a lot of time looking through all of the classifieds to find those businesses that interest you. While classifieds can serve a purpose in buying a business, they are not very efficient or effective.

Business Brokers

Business brokers are typically very professional and knowledgeable in the art of buying and selling a business. Plus they are skilled at helping sellers sell their business. But therein lies the rub – they are contractually obligated to help the seller sell the business. They are not obligated to you as the buyer. Therefore, brokers will usually look out for the seller’s best interests first, which means they will often only show you businesses that they represent. This severely limits your exposure to the number of businesses that are available for sale at any one time, which makes it an inefficient method of finding the perfect business to buy.

However, more common these days are Buyer Brokers. These business brokers represent you, the buyer, in your efforts to buy a business. This can be very effective because the broker knows how to navigate the process of buying a business. However, you often have to personally pay the broker to help you buy a business, which increases your costs. Therefore, it is often best to conduct a search for a business on your own, and then hire an attorney or experienced broker to guide you through the purchase process. But where do you search for businesses on your own?

Online marketplaces

Online marketplaces typically contain an exhaustive list of businesses that are for sale. Plus, it is easy to search these thousands of businesses instantly to find only the ones that meet your criteria. This makes online marketplaces the most effective, efficient and comprehensive method of finding the perfect business to buy.
There are many online marketplaces to choose from, but they are far from equal. Some have inadequate search functions, others are just interested in collecting listing fees from business sellers, and others do not offer the buyer tools to help make your search process easier. As a result, selecting a good business-for-sale marketplace is critical in your search for finding the perfect business to buy.

You want a site that allows you to search its listings for free, and has a strong search function to help you do it effectively. In addition, you want a site that allows you to save your searches and be alerted via email (“Email Alerts”) anytime new businesses are listed that meet your search criteria. This saves you the time and effort of continuously searching sites everyday looking for the right business. Instead, the site does the work for you and presents you with businesses that are of interest to you.

Finally, you want a site that puts its money where its mouth is, one that charges sellers based on performance and not on a pre-set monthly fee. These sites are dedicated to helping match business buyers with sellers while lowering the cost of selling a business. As a result, these sites are very effective for both buyers and sellers.

Resources

* Find the perfect business to buy or franchise to buy,

* To find a broker to help you buy or sell a business, visit BrokerSource

* Sell a business or franchise quickly and easily

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Who Needs A Business Advisor?

Wednesday, June 24th, 2009 at 10:25 pm  
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The simple answer to the seemingly complex question of “Who needs a business advisor?” is … everyone responsible for operating a business. That’s right. The Fortune 50 CEO to the one-person show needs an advisor.

The CEO of a public company has mentors as well as a board of directors to turn to. They often don’t have a choice of who their advisors are but small business owners do. Unfortunately, with this choice of advisors comes another choice that is often made instead. That choice is to not get any help at all.

Not getting any help at all is very often the cause of the business failure statistics we hear so much about. The small business owner will often claim that they don’t have the time or money for an advisor. Think about that comment. How can you not have the money to get help from someone that can potentially save or make you more money since you obviously are not getting it done on your own? Or how about that time you are lacking? Maybe if that owner sat down for an hour with an advisor, they would be able to see why they don’t have time and do something about it with the help of someone who has already been in those shoes.

A coach or advisor gives to small business owners something most of them don’t have; a sounding board and a board of directors to turn to for advice. These are two great resources to use when trying to avoid “trial and error” decisions and processes.

I’m not knocking trial and error as the way to learn things. I’ve personally used that method and faired well in many cases. But that is a case-by-case basis, not for on-going daily concerns. Don’t forget that this method is also very costly and time consuming. Why not ask someone who has probably already faced the problem?

What many business owners do not realize is that they rarely go through any trials and tribulations that someone else has never dealt with. Not to mention that about 70-75% of their business is the same as every other business including HR, finances, sales, marketing and funding. The other 25-30% is industry specific.

Small to mid sized business owners take away much more from an advisor than big businesses. This, if for no other reason, is the case because the smaller companies have owners that wear a lot of hats. Many of those hats take time away from the things the owner actually needs to make a priority to see their company succeed. Things they should be doing that they don’t have time to get to or things they are taking care of that they have no experience in doing. These situations take away from them doing what they do best. That’s a problem.

The question now is how to find an advisor. There are many types of business advisors out there. Some are purely “coaches” and others are true developers and implementers that will roll up their sleeves with you when asked to. It’s up to you to pick the type of person you want or need. Here are a few things to think about:

- Do they click with your personality? There are many good advisors out there but if they don’t click with you as a “business friend”, don’t bother with them because you will end up fighting them even when you agree on the advice.

- Have they owned a small business before? Gray hair does not equal business ownership knowledge. I promise you that the ex-CEO or Senior manager from a huge company knows very little about successfully operating a small business. These are two significantly different worlds.

- Don’t worry if a potential advisor doesn’t know your specific industry. Remember that a lot of your troubles have nothing to do with your industry. It would help though if the advisor had contacts/resources for you in your industry for when specific problems are addressed.

- Look for flexibility. A potential advisor that pushes for more than 20 hours a month of your time from day one is probably out for money. Until they start working with you, there is no way of knowing that they need that much time per month to meet your goals and timelines. A good advisor will understand that you have made a commitment to get back on track just by the fact that you are talking to them. They shouldn’t need to try and get a ridiculous time/money commitment from you if they want to help.

- Make it a local thing. This suggestion is a two-part issue. First, the advisor should agree that when face time is needed that they come to you. Second, there is absolutely no reason why a small business with locations in one state needs a business advisor that must fly in or travel more than 2 hours to see them. These companies somehow find suckers to take their so-so advice and huge reports full of fluff and also pay for travel costs. There are plenty of advisors local to every company in this country. Yes, even in Hawaii.

Once you made the very intelligent decision of getting help in making your business a success, keep a few things in mind. You should really commit to working with your advisor for a good 6 months. Nothing gets fixed overnight. Also, since you are paying for it, please do yourself a favor and be open to suggestions, bring important things to your advisor for help in making a decision and make the use of your time with the advisor a priority. Don’t forget that an advisor or coach should never make a decision for you. It’s your company, they are there to make suggestions and guide you.

Working with an advisor can be a very enlightening experience. You will start to see the forest from the trees and not feel like you are the only person on the planet going through tough times as a business owner.

All business owners eventually need help. The successful ones put aside their pride and desire to be at the center of all aspects of the company and get the help. Do yourself and your company a favor and be one of the truly successful business owners. Get an advisor and get all you can out of them. If your advisor loves what he/she does for a living as such as you love what you do, you can’t go wrong.

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7 Critical Business Financing Mistakes

Wednesday, June 24th, 2009 at 10:24 pm  
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Avoiding the top 7 business financing mistakes is a key component in business survival.

If you start committing these business financing mistakes too often, you will greatly reduce any chance you have for longer term business success.

The key is to understand the causes and significance of each so that you’re in a position to make better decisions.

>>> Business Financing Mistakes (1) – No Monthly Bookkeeping.

Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making.

While everything has a cost, bookkeeping services are dirt cheap compared to most other costs a business will incur.

And once a bookkeeping process gets established, the cost usually goes down or becomes more cost effective as there is no wasted effort in recording all the business activity.

By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs.

>>> Business Financing Mistakes (2) – No Projected Cash Flow.

No meaningful bookkeeping creates a lack of knowing where you’ve been. No projected cash flow creates a lack of knowing where you’re going.

Without keeping score, businesses tend to stray further and further away from their targets and wait for a crisis that forces a change in monthly spending habits.

Even if you have a projected cash flow, it needs to be realistic.

A certain level of conservatism needs to be present, or it will become meaningless in very short order.

>>> Business Financing Mistakes (3) – Inadequate Working Capital

No amount of record keeping will help you if you don’t have enough working capital to properly operate the business.

That’s why its important to accurately create a cash flow forecast before you even start up, acquire, or expand a business.

Too often the working capital component is completely ignored with the primary focus going towards capital asset investments.

When this happens, the cash flow crunch is usually felt quickly as there is insufficient funds to properly manage through the normal sales cycle.

>>> Business Financing Mistakes (4) – Poor Payment Management.

Unless you have meaningful working capital, forecasting, and bookkeeping in place, you’re likely going to have cash management problems.

The result is the need to stretch out and defer payments that have come due.

This can be the very edge of the slippery slope.

I mean, if you don’t find out what’s causing the cash flow problem in the first place, stretching out payments may only help you dig a deeper hole.

The primary targets are government remittances, trade payables, and credit card payments.

>>> Business Financing Mistakes (5) – Poor Credit Management

There can be severe credit consequences to deferring payments for both short periods of time and indefinite periods of time.

First, late payments of credit cards are probably the most common ways in which both businesses and individuals destroy their credit.

Second, NSF checks are also recorded through business credit reports and are another form of black mark.

Third, if you put off a payment too long, a creditor could file a judgement against you further damaging your credit.

Fourth, when you apply for future credit, being behind with government payments can result in an automatic turndown by many lenders.

It gets worse.

Each time you apply for credit, credit inquiries are listed on your credit report.

This can cause two additional problems.

First, multiple inquiries can reduce you overall credit rating or score.

Second, lenders tend to be less willing to grant credit to a business that has a multitude of inquiries on its credit report.

If you do get into situations where you’re short cash for a finite period of time, make sure you proactively discuss the situation with your creditors and negotiate repayment arrangements that you can both live with and that won’t jeopardize your credit.

>>> Business Financing Mistakes (6) – No Recorded Profitability

For startups, the most important thing you can do from a financing point of view is get profitable as fast as possible.

Most lenders must see at least one year of profitable financial statements before they will consider lending funds based on the strength of the business.

Before short term profitability is demonstrated, business financing is based primary on personal credit and net worth.

For existing businesses, historical results need to show profitability to acquire additional capital.

The measurement of this ability to repay is based on the net income recorded for the business by a third party accredited accountant.

In many cases, businesses work with their accountants to reduce business tax as much as possible but also destroy or restrict their ability to borrow in the process when the business net income is insufficient to service any additional debt.

>>> Business Financing Mistakes (7) – No Financing Strategy

A proper financing strategy creates 1) the financing required to support the present and future cash flows of the business, 2) the debt repayment schedule that the cash flow can service, and 3) the contingency funding necessary to address unplanned or unique business needs.

This sounds good in principle, but does not tend to be well practiced.

Why?

Because financing is largely an unplanned and after the fact event.

It seems once everything else is figured out, then a business will try to locate financing.

There are many reasons for this including: entrepreneurs are more marketing oriented, people believe financing is easy to secure when they need it, the short term impact of putting off financial issues are not as immediate as other things, and so on.

Regardless of the reason, the lack of a workable financing strategy is indeed a mistake.

However, a meaningful financing strategy is not likely to exist if one or more of the other 6 mistakes are present.

This reinforces the point that all mistakes listed are intertwined and when more than one is made, the effect of the negative result can become compounded.

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