small business

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 A colorful banner heading up the Wall Street Journal today blasts:  Too Many Distractions, Or Is It Adult ADHD?    

Since I typed that sentence I took the earphones out of my ears because I thought I heard my cell phone ringing; but realized, although it wasn’t a call coming in, I did, indeed, have an important email on my blackberry to read and digest.  Even for those of us who do not suffer with ADHD, distractions bombard us with 4G speed.

Is it even possible to stay focused?  The answer is, it doesn’t matter if it’s possible or not.  If you are in a small or medium-sized business:  you must. 

New ideas come to you and at you all the time.  It’s easy to become enamored with a new sales channel, a new opportunity, a new social media thingy.  It’s hard to pick three must-achieve goals and hammer away at them relentlessly, ignoring the distractions.   

Even if you are disciplined and focused personally, how focused is your organization?  

The WSJ Personal Journal provides a questionnaire tool to help the reader evaluate himself.  Here’s a quick questionnaire to test your organizational focus:

  1.  Did your organization achieve your top three goals last quarter?
  2. Do you know your top 3 to 5 goals for this quarter?
  3. Does every person in your organization know the top 3 to 5 goals for the quarter and how they contribute?


What have you done to make sure every person in your organization is relentlessly focused on the right top three priorities?

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According to an article in today’s USA Today, small businesses vital to economic recovery are increasingly going bankrupt.  This is likely happening for two reasons:

1.  Their customers are going bankrupt so they aren’t being paid outstanding balances
2.  Capital is tied up in accounts receivable

We all know that it is virtually impossible for SMBs to receive sufficient bank loans or generate the credit necessary for their business to thrive.  Even with the meager stimulus checks beginning to circulate from the federal government, the overriding issue for most SMBs is not having the cash on hand to hire more talent, pay off debt and/or take on more customers. 

In fact, did you know that it currently takes a small business 56 days to get paid by its customers (probably more in today’s economy). And, according to AMI’s Q2 2009 SMB surveys, “restricted cash flow” is one of the major challenges facing SMBs both in the U.S. and around globe.  As such, now more than ever, it’s essential that small business owners only partner with vendors & suppliers that are in good economic standing.  Additionally, having access to the capital commonly tied up in accounts receivable should be the number one priority for small businesses, as those funds represent many businesses largest untapped resources. 

If I were to offer some quick advice for small business owners, I’d strongly suggest making sure that you know why your customers buy from you, choose those customers carefully and do everything you can to generate access to all of the assets available to you – whether its government stimulus, a small bank loan or uncovering capital tied up in accounts receivable.

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Recently I met with one of the Managing Directors of Equities at Sandler O’Neill, investment bankers and research analysts to financial institutions.  Our conversation centered on the current state of the capital markets, a topic very important to FTRANS as our mission is to provide small and medium businesses access to the cash flow they need to run their businesses.

He had several charts tracking 20 years of year over year changes in bank and non-bank credit availability.  Two charts grabbed my attention.  One illustrated non-bank home mortgage availability dropped from a $700 billion increase year over year to a $300 billion decrease, a $1 trillion change since the beginning of this year.  Yes, a trillion.  The other chart, clearly showed the recent, significant drop in non-bank consumer credit which together declined a whopping $1.4 trillion year over year.   The decline in these non-bank shadow credit markets was chilling.

shadow markets

Why does your typical small to medium business owner care that home mortgage lending and consumer credit have cratered?  Experts estimate that at least 20% to 30% of small businesses have used to the equity in their home to start up their business, ease a cash flow crunch or grow their business.   Additionally, according to a June 18, 2009 article in the New York Times entitled, “A Credit Squeeze for Small Business Owners,” by Andrew Martin, 59% of small businesses in the US rely on credit cards to finance their day-to-day operations.         

A quick Google search uncovers recent articles touting the benefits of leveraging the equity in your home as a funding source for small and medium sized businesses.  Housing prices were rising and the interest was deductible.  Of course, we are also aware of the low, introductory “teaser” rates formerly offered for credit card balance transfers when opening a new card account.  As illustrated by the charts, both of these financial markets have diminished significantly.   As a result, for most businesses, these funding streams are now dry and businesses are going to have to tap alternative sources of capital such as leveraging their receivables.   If you are a small business owner, the health of your Customer Portfolio (your sales + your ability to convert those sales into cash) is going to, more than ever, play a significant part in the viability of your business.

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Daily News SmallBiz, a free social network for small businesses, was launched this week by The Daily News, in partnership with   The site offers users the ability to network with small businesses throughout North America and access business and sales lead resources.

Daily News CEO, Marc Kramer, had this to say, “Our small business social network will provide a networking platform and access to business solutions for small business owners and their employees.”

He continued, “By providing an active community and business support system, it is our goal to offer a sustainable service to help them cope with these difficult economic times and help them build for their future.”

If you’re interested in checking out this small business network for over 500,000 businesses, read more here.

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Discover Small Business Watch reports that in March 2009, economic confidence among small business owners experienced the largest increase in nine months.  In addition, the number of small business owners who say the economy is getting worse dropped to 60 percent (down from 69 percent the previous month).  To read the whole report, click here.

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