Small Business Growth Tips

The Secret to Success for Main Street Small Businesses

Selling Delight: The Small Business Advantage

I was at a dinner gathering a few weeks ago, and some of the guests were talking about trips they'd recently taken. One of the attendees told a story about a weekend getaway, where his wife and kids visited an ice cream shop in Chicago. This particular ice cream shop was recommended by another family, so they were eager to go. One night after an incredible dinner, they decided it was time for dessert. So, off they went to this memorable place. After waiting in line and being sat, the owner of this remarkable small business walked up to their table to greet them, telling them all about his signature dessert. It was 75 scoops of ice cream with every topping imaginable, all piled into a massive bowl and placed in the middle of your table. It was massive, heavenly, and came with a price tag of $100.

Some of you may be saying to yourself, there's no way I’d pay $100 for ice cream. What patrons are willing to pay for at this particular small local business (and lined up out the door, I might add) is the experience, and the story they get to tell about it afterward. The kids couldn’t be happier, taking photos and posting them all over social media, while the parents sit in amazement. Let’s face it, I’ve never heard someone get excited and command the room of 30 guests talking about a $2.00 chocolate chip cone at the local drive through. Have you?  The reality is, the parents couldn’t care less how much this dessert cost, because the look on their kids face while devouring this monstrosity is priceless. The owner of the shop is shrewd; he's identified what makes his small business special, and that's what he's selling. Yes, it’s the 75 scoops of ice cream, more sprinkles and hot fudge than you could possibly swallow, but this place creates an everlasting memory, and people will gladly pay for that experience.

It’s not a level playing field for SMBs

Let’s face it, independent small businesses are operating at a significant disadvantage in our current economy. They have to pay a lease on their buildings, usually exorbitant insurance costs, utilities, labor expenses, inventory expenses, and a host of other bills just to keep the lights on and the doors open. In that sense, they have almost no chance of competing with huge companies that can leverage their capital, technological advantages, and economies of scale to undercut smaller, Main Street-style businesses – “Mom and Pops” – at every turn.

Think of it this way: Suppose you're a small business that sells shoes. How can you convince a customer to buy shoes from you instead of from Amazon.com? Thanks to your overhead, you can't sell your shoes as cheaply as Amazon can. You can't afford to maintain the inventory or warehouses that Amazon can, so you might not have the right shoes in the right sizes in stock at all times. You can't afford to be open 24 hours a day, so you can't sell your shoes at 3 a.m. the way Amazon can, and the customer can't buy shoes from you on his couch lounging around freely in his underwear.

That sounds hopeless, doesn't it? Well, it shouldn't, because you've got something that Amazon doesn't have. You have the opportunity to sell an experience. You have the opportunity to create a memory. You have the power to give your customers personal, hands-on attention. You can find out about their individual needs, and you can help them find exactly the shoes that will work best for them. You can give them a shoe-buying experience that will have them walking out the door smiling, and they'll be very likely to come back the next time they need a pair of shoes.

Relationships are Everything

The secret to succeeding as an independent business owner is providing value to your customers that they can't find elsewhere. As a small business owner on Main Street, the greatest value you have to offer is the human touch. You can do business the way that it's been done for centuries, with small business owners and their staffs developing relationships with the people of the communities they serve. Customers value those relationships, and they're willing to patronize the independent businesses that provide them.

No one is going to sit around the dinner table telling stories about buying shoes from Amazon. The process is efficient and relatively cheap, but it doesn't inspire interest, joy, passion, or loyalty. People will, however, tell stories about the ice cream shop that brings a mountain of ice cream to your table if you want it, and the people who hear the story just might decide to visit the shop. As a small business owner, you have the ability to offer your creativity, your heart, and your personal dedication to your customers. If you do that, you'll delight the people you do business with, and there will be no stopping you.

You may also like: The Fourth Industrial Revolution: Preventing Economic Collapse by Fostering Independent Businesses

Author: Charles Barr, Co-Founder & Director of LVRG Funding, a "boutique" small business funding company dedicated to helping America's small businesses thrive and grow. Charles is highly dedicated to the genesis of professional development, social networking and civic engagement, with a passion for cultivating creativity, entrepreneurship and a spirit of community.

10 Incredibly Valuable Tips for Boosting Small Business Cash Flow

Businesses big and small use a variety of cash flow strategies, such as getting advances on invoices, requiring advance deposits, and more. Going the more traditional route and applying for a bank loan may seem smarter, especially today with many of the big banks increasing their small business outreach and lending options.

However, if your small business were to find itself in a sudden cash crunch, a bank’s extended loan approval process could leave you unable to pay creditors and employees or buy needed inventory. Small business owners need to think creatively to keep their cash flowing.

#1. Advance on Invoices - Invoice financing is a great solution when you know your invoices will eventually get paid, but want the cash flow sooner. 

#2. Deposits and Partial Payments - Before starting any work, asking for a hefty down on large orders is a smart way to make sure you’ll get paid. Requiring a “security” deposit creates a safety net for your business, protecting it from rollercoaster economies around the world. Make sure you spell out the details of any upfront payment requirements in your contracts.

#3. Cash on Delivery - Requiring COD payments works particularly well when you’re working with new clients—at least until they establish a history of on-time payments.

#4. Payment Plans - If a customer won’t put down a deposit or pay early, consider setting up some type of payment plan so some money comes in on a regular basis. Negotiate monthly payments or payments at each stage of the project or relationship.

#5. Understand Your Operating Cycle - Regardless of size, every small business must deposit, monitor, and manage cash receipts; make payments; fund purchases; and invest in the company. Reviewing and understanding each step in this cash-flow cycle can help a company work more efficiently. 

#6. Layaway Plans - In the case of a highly anticipated or limited release product, consider establishing a layaway plan or offer customers a pre-sale discount. Customers are often willing to pay a premium for items they can’t get elsewhere.

#7. Leasing Equipment - You can save a lot of money by leasing equipment instead of purchasing it. Usually, lease agreements include a service contract, and you can take advantage of lower-cost upgrades when new technology is released.

#8. Review Your Payroll Process - If you pay your employees twice a month instead of every other week, you will be managing 24 payroll periods instead of 26 during the course of a year, making your company more efficient. 

#9. Sell, Sell, Sell - If you own equipment that’s outdated or obsolete, put it up for sale or auction. The same holds true for older inventory: Sell it for a discount to get a quick cash injection to your working capital.

#10. Obtain Capital - Capital is so important to growing a business. If you don’t have what you need for your business’s development, all you’re doing is paying your bills and just getting by. Having enough working capital to pay those bills on time every month is important, but to take your business further, it’s growth capital you should be paying close attention to. To do that, you have to understand how growth capital works, what it does, and how it helps your company develop from a small business to something much larger and stronger.

Cash shortfalls happen. The month you need to pay out for a ton of new inventory could be a naturally slow month for revenue; the need for major repair work could fall in the same month half of your employees worked overtime. Whether they are due to a slow season, lagging client payments or unanticipated expenses, cash shortfalls are survivable if small businesses look ahead and act early. As always, we’re here to help!

 

Small Business Growth in Real America. LVRG Fuels America's Small Businesses on Mainstreet.

Small Businesses and Real America

Small businesses hearken back to a time when the American Dream was alive and well, fueled not by plastic products from China, but by honest, dedicated work. There are still people that conform to these ideals, and these people make up the basis of America's small businesses. Innovative ideas from a number of different catchment areas means that you can open up a business dealing with almost any type of good or service. Throughout America's main streets are new manufacturers, coffee houses, barbershops, craft breweries, bike shops, boutiques, bars, restaurants, entertainment centers, etc. These businesses are what fuel America's growth and help it to withstand times of economic uncertainty. By keeping true to the values that business owners before them have espoused, these local small business owners serve as the platform that supports the American economy.

Securing capital is something that comes in time with virtually every business, whether it's in the initial exhilarating stages of transforming an idea into a company or later on, once operations begin to normalize. Generating the amount of liquid cash necessary to scale appropriately, build inventory, or expand marketing efforts can be a challenge for businesses of any size, making additional cash flow a significant benefit.

Remember the old days, where you'd walk into your bank and walk out with a small business loan? Well, keep them in memory because that sure doesn't exist today. Securing capital can be what it takes to motivate growth and truly seize the proverbial day. But what type of capital is available today and what type of loan makes sense for your particular business? 

Financing a small business usually requires a lot of creative means in order to come up with a viable financing strategy. There are a number of ways that small business owners can finance his or her business. Depending on the type of business, the expected return on investment and the complications that may arise financially, finding funding can vary. A few of the available options for financing growth are:

Small Business Loans - Probably the single most common method for funding business growth is by obtaining a small business loan. However, there are a number of different options that come with small business loans, and in order to choose the right one, you need to understand which loans work best with what type of enterprise. You should take into consideration the type of operation, size of the business in terms of staff and assets, and overall monthly or yearly return. Exploring options for loans can even clue you in to loans that are specifically designed for your type of enterprise. Loans can be either long-term or short-term, and each have their particular uses. Small business loans are usually very reliable, making them a great option for business financing available to small business owners. You can put a small business loan “to work” immediately for your business, whether it means meeting payroll for a few months, negotiating a great deal on inventory for paying in cash or hiring and training those new employees you need.

Cash Flow Loans - Type of debt financing, generally for working capital, using the expected cash flows that a borrowing company generates as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. Even if your small business is growing, you may find yourself needing extra cash to cover day-to-day expenses such as payroll, rent and inventory, or to pay for short-term projects that could grow your revenue in the long run. Uneven cash flow is one of the biggest challenges of small businesses throughout all industries. In a perfect world, you’d walk into your local bank and walk out with a business loan long before you wound up in a cash crunch. Well, those days are long gone! If you haven’t been in business at least two years, or lack good credit and collateral, chances are a traditional bank loan is never going to happen. In order to deal with this shortfall, a cash flow loan may be your best option.

Revenue Based Loans - Instead of a business being required to pay fixed interest payments like a typical bank loan, a revenue based loan is paid with a percentage of revenues. A revenue based loan could be your businesses lifeblood and provide it with several financial benefits. When your business is growing, chances are you'll need an injection of cash to continue its growth. Bank loans are often times too restrictive and near impossible to obtain these days. In this situation, a revenue based loan may be the best solution. If you use it wisely, a revenue based loan could do wonders for your business. Without being capitalized, chances are you will wind up in a growth stalemate.

Bad Credit Business Loans - Owners of small and medium-sized businesses often face a common challenge: They need capital to grow and strengthen their businesses, but bad credit may be holding them back. Forget trying to get a loan or line of credit from a “traditional” financial institution. A poor credit history will nearly always result in rejection for funding. Bad credit business loans cater to business owners that have cash flow issues or a history of liens, judgments, and bankruptcy.

Merchant Cash Advance (MCA) – A merchant cash advance can provide business borrowers with an upfront fixed amount of cash in as little as 24 hours. The funding amount is based upon a percentage of the businesses credit card receivables or daily cash balances using historical credit card receipts and bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables or cash available plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily, or weekly basis until the obligation has been met. MCA's are good options for small business owners who may not have strong credit but have lots of credit card activity and need financing quickly.

In some cases, access to capital is a great way to take advantage of new opportunities. In others, however, it can be a good way to pull a struggling company out of a pit of poor circumstances. Despite the potential for risk, capital can be the saving grace when trouble comes to call, providing the means to bridge the gap between failure and success. A few extra dollars today may mean an empire tomorrow, and can be the necessary protection against closing up for good.

A business loan or any of the funding options mentioned above, whether for a few thousand dollars or a few million, can make previously unavailable opportunities obtainable, providing a customized solution in a time of need and keeping the lights on even when the going gets rough. With ready access to business capital, the possibilities are literally limitless, offering the assets you need to promote a positive trajectory and inspire healthy growth.

Moreover, the growth of online lending has resulted in the introduction of sub-optimal lenders that engage in less than ethical practices. Unfortunately, some lenders push small business owners to take on more credit than needed, or initially promise unsubstantiated terms and rates in a bait-and-switch scenario.

Yet, there is some hope. Reliable and experienced lenders have begun to focus on dealing with specific groups of small business customers, so as to provide a more prudent and specialized financing advice in supporting businesses’ initiatives for success. By better understanding the characteristics of industry-relevant financial statements and business models, such loan provider offers optimized funding solutions in a more efficient manner. Small business owners are finally coming around, realizing that those cookie cutter, one size fits all small business loans being sold all over the internet are counterproductive and potentially detrimental to their business. Small business owners face unique challenges that require the partnership of an experienced funding firm; not product pushers, boiler room salesmen or overseas telemarketers who can hardly speak English. Indeed, for small businesses, whether receiving funds from an investor or a small business loan from a group like LVRG, business owners will benefit from finding a lender that knows their businesses, and has their best interest at heart. For a small business looking at growth, a company such as LVRG is definitely a good place to start. Call toll free (855) 998-5874 or click below.

 

Small Business Loan Information Overload

In today’s world, we literally have access to an ocean of information. With very little restrictions, people can freely swim in the open sea of the Internet, just as you are reading this article on your laptop or mobile device. The amount and variety of information available to us is appreciably infinite and the search cost has become much lower. Although this has greatly improved our ability to make a more educated choice, it has also created a band of low quality, often inaccurate and misleading information.

Take healthcare for example, a study has shown that over 80% of all Americans look online for health information. More and more patients are going to their doctors having already researched their symptoms on the Internet, and already convinced of their own diagnosis. What is more, doctors are also increasingly turning to the Internet, with nearly half of doctors reporting using the notoriously inaccurate Wikipedia as a source of medical information.   

If you Google “information overload” you will be inundated with information: more than 7 million hits in 0.05 seconds. Some of it is mere noise; obscure companies promoting their services and even more obscure bloggers sounding off. The overall impression is at once overwhelming and confusing. “information overload” is one of the biggest irritations in modern life and it's getting worse every day.  

Amazon has filed lawsuits against users who wrote fake reviews on products for pay but admit that the activity is still prevalent, not only on Amazon but Google and other review websites.  Furthermore, countless web pages and affiliate blogs selling everything from merchant cash advances to vitamins, sex pills to dietary supplements; all boasting bogus results and misleading cues.  The Internet has made it possible for us to buy virtually anything we can imagine, regardless of how ludicrous it may be. Returning to the ocean analogy, we’re now playing in much deeper waters, where the waves are high and winds are strong. To make the most of the current environment, especially as it relates to small business owners whose success often depends on obtaining realistic and truthful information, business owners must filter through the nonsense and search through an ideal set of information to maintain a competitive edge. Are you educating yourself on truthful information, or fake offers, teaser rates and false promises?   

One of the larger financial blogs on the internet boasts about making it simple to find the best deals on all types of financial products, from: credit cards, insurance, small business loans to mortgage rates, etc. However, this site is nothing more than a large affiliate marketing platform and much of their content is written only for keywords and placement on Google. No question about it, they have SEO down to a science but their content is misleading and inaccurate. So we decided to dig deeper and finally found a little link that led to a page titled, "how we make money." Here are the highlights: "We make money when you get the funding you need. Some of the loan providers on our site pay us a referral fee when customers like you get approved for a loan. Some of the financial institutions with products on our site may pay us a referral fee when customers get approved for certain products. When you click to apply for those products through our site, we may receive compensation from the company that issues that product. While we try to feature as many financial products on our site. We recognize that our site does not feature every product available on the market." How unbiased can they be, if they are only steering you to a few sites that pay them referral fees?

While education and research is imperative for success, too much information can shroud sensible decision making. Especially, when most of the the information you are absorbing is false. People are getting bombarded with information from all angles, and instead of becoming more educated and knowledgeable, often times they only wind up getting frustrated and extremely confused. The Internet has been proven to be a double edge sword; one blade allows you to efficiently work through business matters and obtain information that otherwise may not had access to, while the other can hurt your effectiveness, as you have to constantly decipher what is right or wrong, authentic or apocryphal. Just as fire is a wonderful servant but a terrible master, information on the Internet, especially as it pertains to finances, need to be carefully digested.

Small business loan and merchant cash advance marketplaces have been flourishing in the last few years, and so has the number of specious lenders increased. The old adage of what seems too good to be true, probably is. Yet, so many people forgo the legitimate and obtainable funding offers to grow their business, while wasting their time searching out unfounded loan options that simply don’t exist. Chasing butterflies we like to call it. Thousands of consumer reports indicate fake, fraud, or misleading instances of online small business loan offers, which not only waste time for consumers but result in negative outcomes. Every day, seemingly smart business owners get locked into small business loans that they don’t understand and may very well put their business in jeopardy, all because they heard what they wanted to hear and refused to listen to reason.

Many of the propositions discussed here have been supported through recent research and suggest that too much information may hurt consumer decision making. Through a series of established economic models and numerical analyses, the researchers find that an intermediate amount of information is better than too much, or unlimited information.

Whether you like it or not, the tide of the Information era is looming larger by the day, and it is up to your prudence to navigate through these waters in finding the best small business financing options for your particular business. Especially for an important decision as getting a small business loan to fuel your growth initiatives or simply meet payroll; you should avoid listening to the song of sirens and steer toward a reliable and knowledgeable loan provider and resource such as LVRG. 

Small Business Finance, Small Business Loans & Small Biz Funding. Could There Be Too Much Information Out There?

In today’s world, we literally have access to an ocean of information.  With very little restrictions, people can freely swim in the open sea of the Internet, just as you are reading this article on your laptop or mobile device.  The amount and variety of information available to us is appreciably infinite and the search cost has become much lower.  Although this has greatly improved our ability to make a more educated choice, it has also created a band of low quality, often inaccurate and misleading information.

Take healthcare for example, a study has shown that over 80% of all Americans look online for health information.  More and more patients are going to their doctors having already researched their symptoms on the Internet, and already convinced of their own diagnosis.  What is more, doctors are also increasingly turning to the Internet, with nearly half of doctors reporting using the notoriously inaccurate Wikipedia as a source of medical information.   

If you Google “information overload” you will be inundated with information: more than 7 million hits in 0.05 seconds. Some of this information is interesting: for example, that the phrase “information overload” was popularized by Alvin Toffler in 1970.  Some of it is mere noise; obscure companies promoting their services and even more obscure bloggers sounding off.  The overall impression is at once overwhelming and confusing. “Information overload” is one of the biggest irritations in modern life and it's getting increasingly worse.  

Recently, Amazon has filed lawsuits against users who wrote fake reviews on products for pay but admit that the activity is still prevalent, not only on Amazon but Google and other review websites.  Furthermore, countless web pages and affiliate blogs selling everything from dietary supplements to business loans boast bogus results and misleading cues.  The Internet has made it possible for us to buy virtually anything we can imagine, regardless of how ludicrous it may be.  Returning to the ocean analogy, we’re now playing in much deeper waters, where the waves are high and winds are strong.  To make the most of the current environment, especially as it relates to small business owners whose success often depends on obtaining realistic and truthful information, business owners need to filter through and search through an ideal set of information to maintain a competitive edge.  Another words, are you educating yourself on truthful and unbiased information, or just reading an affiliate website temping you with fake offers, in an attempt to entice you enough to click on a banner, or fill out an online application, so that they can earn a commission? 

While education and research is imperative for success, too much information can shroud sensible decision making.  Especially, when most of the the information you are absorbing is incorrect, or only half the truth. People are getting bombarded with information from all angles, and instead of becoming more educated and knowledgeable, often times they only wind up getting frustrated and extremely confused.  There is so much inaccurate and flat out false information being pumped into the public, it's hard to distinguish between reality and make believe. It’s one thing if you are buying the latest model basketball shoe from a popular retail website, you know if you order a size 10 Nike Air, you will get a size 10 Nike Air.  But when your livelihood and the livelihood of your family rides in the balance of obtaining the proper small business financial advice, you must be able to sift through the nonsense and understand that not everything on the internet is fact; nor are all small business loan sources created equal.  The Internet has been proven to be a double edge sword; one blade allows you to efficiently work through business matters and obtain information that otherwise may not had access to, while the other can hurt your effectiveness, as you have to constantly decipher what is right or wrong, authentic or apocryphal.  Just as fire is a wonderful servant but a terrible master, information on the Internet, especially as it pertains to finances, need to be carefully digested.

Peer to Peer (P2P) lending and Fintech platforms have been flourishing in the last 5 years, and so has the number of specious lenders increased, just as some of Amazon’s reviews have become tainted.  Banner ads fill your screen and pop-ups appear on every web page you visit offering teaser rates on business loans and merchant cash advances with ridiculous rates.  It's been said that common sense isn't so common after all.  Do you really believe that a random telemarketer will offer you a small business loan at bank rates, while overlooking poor credit, minimal time in business, lack of cash flow, tax liens, judgments and bankruptcies?  The old adage of what seems too good to be true, probably is.  Yet, so many people forgo the legitimate and obtainable funding offers to grow their business, while wasting their time searching out false and unfounded loan options that simply don’t exist.  Hundreds, perhaps thousands, of consumer reports indicate fake, fraud, or misleading instances of online loan offers, which not only waste time for consumers but result in negative outcomes.  Every day, seemingly smart business owners get locked into small business loans that they don’t understand and may very well put their business in jeopardy, all because they heard what they wanted to hear and refused to listen to reason.  

The greatest “search cost” for small businesses is time.  By forgoing reasonable and credible loan terms and rates in search for a better offer, business owners have been led to believe that shopping is the best way to find that better offer, which typically winds up lowering their credit score and often puts them in a negative cash flow cycle.  This pattern can ultimately cause a negative impact in their operation and spiral out of control if not careful.  That’s right, often times the search for that “better rate” puts them in a worse position they were in to start with. Instead of wasting valuable time to find unobtainable and unreasonable loan terms and interest rates, small business owners are better off researching a trustworthy and competent alternative financing providers who have the knowledge, experience and wherewithal to advise you properly.

Many of the propositions discussed here have been supported through recent research by Miguel Villas-Boas and others, who suggest that too much information may hurt consumer decision making.  Through a series of established economic models and numerical analyses, the researchers find that an intermediate amount of information is better than too much, or unlimited information.

Whether you like it or not, the tide of the Information Era is looming larger by the day, and it is up to your prudence to navigate through these waters in finding the best small business financing options for your particular business.   Especially for an important decision as getting a small business loan, revenue based loan, term loan or merchant cash advance to fuel your growth initiatives or simply meet payroll; you should avoid listening to the song of Sirens and steer toward a reliable and knowledgeable loan provider and resource.