Articles Tagged ‘small business growth’

If You Knew You Would be Out of Business in a Year– Would You Change?

Monday, February 6th, 2012

The answer to this question seems clear. Of course you would change. The thought that obstacles would not occur in life or business is an unreal idea. Ask yourself, “can I handle obstacles?” Again we go back to, “what would you do if you knew your couldn’t fail.” Lina Sanchez talks about it in her article in the Gwennett Network. We have no choice in life but to handle obstacles; even if we “don’t handle them” we’re handling them!

Companies often wait too long to change. As Eastman Kodak files for bankruptcy, the 131 year old company, with a great formula but one that couldn’t change quick enough. Who can forget the Kodak name, the leader of inexpensive cameras? What we don’t know about Kodak is that the company’s own researchers had invented the first digital camera way back in 1976. This put Kodak in a position where they could have dominated the industry and owning every category of cameras, printers, inks and more. Unfortunately it never happened. It’s been said that the Kodak leaders couldn’t imagine a world where pictures weren’t shot on film. This company had the technology but not the vision on how to use it. Kodak believed in saving family memories by capturing them on film–they were way ahead of the social media revolution. (If you’ve not seen this video on the social media revolution this will be an eye opener!)

Nokia is another company that failed to act despite the fact that they had created a formula for a tablet-shaped handset. They just couldn’t execute the plan. (The Harvard Business Review, November 2011 has many great articles on companies that couldn’t change.)

Being a leader means understanding when things change in the environment, such as in our present economy the business has to change . Unfortunately making changes in one’s business because of environmental changes is very reactive and good leadership should be proactive not reactive. As we see, some companies such as Neihaus Companies (which I featured in my last blog) are flourishing in this economy, why, because they have a plan and have stuck to it. Having a plan doesn’t mean you can’t be flexible in fact being flexible and giving yourself “wiggle room” should be part of your plan.

Here are 5 ways that you can help your business and your life be proactive.

1. Don’t wait for things to happen. Build your business on sound principles, and prepare today for the future. If you’re planning for an eventual new roof, prepare for changes in the economy and that your ideas may need to be replaced. This leads to changes in your differentiation and reviewing your competitive advantage. (Your customers can help you with this.)
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Invoice Discounting: an Alternate Source of Small Business Funding

Tuesday, November 23rd, 2010

One of the main problems facing small business owners today is the ongoing issue of how to make cash flow stretch to accommodate their growth plans.

Their problem is not new. It has been prevalent for a long time and yet there are still only a few viable financing methods available for small businesses.  When the need for capital arises, the first thought is to approach a bank for assistance. A bank can provide a term loan, a line of credit or perhaps an SBA loan. Unfortunately, there seems to be reluctance among the banks to offer loans to small businesses in the $25,000 to $50,000 amount range.

The reasons for this reluctance seem to be two-fold. First, banks are ‘equity’ lenders. They expect their customers to have established equity in the form of capital and retained earnings before the bank can accommodate their needs. Small businesses are typically under-capitalized, and many have been in business for less than three years. They are just at a point in their existence where the business is starting to become profitable. Consequently, when the need arises for additional working capital, the customer cannot meet the bank’s balance sheet requirements.

Secondly, for banks to make small business loans they must do so on a profitable basis. Lending $25,000 to a small company has approximately the same administrative cost to the lender as lending $100,000 – $200,000. It is natural that the lender will choose the larger opportunity, as it carries the similar administrative cost but yields a higher return.

Where does this leave small business?  
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