Credit Cards Filling the Cash Flow Gap for Small Businesses

Credit Cards Filling the Cash Flow Gap for Small Businesses

Last week the House Committee on Small Business examined the role of credit cards in financing small business. Without capital, small businesses can’t grow, and the American economy loses out on their important contributions.  In the current economic climate, however, small firms are finding it difficult to secure affordable financing. And the reality is that if you don’t look for cash when your business is flourishing, you sure won’t find it during a downturn which could cause you some serious cash flow problems.

“When a small firm can’t buy equipment, or has to lay off its workers, our entire economy suffers,” said Chairwoman Nydia M. Velázquez. “These businesses are the principal drivers of our economic growth, but without capital they can’t lead us back to recovery.”

In a recent Federal Reserve survey of senior loan officers, 65% of respondents reported tightening lending standards in the first quarter of 2008.  The impact of this move is compounded by federal loan programs — such as the SBA’s 7(a) initiative — which are increasing fees and making it more difficult for entrepreneurs to get financing.  Witnesses at the hearing noted that because SBA’s programs are falling far short of their intended purpose, they are having to turn elsewhere to meet their capital needs.  This has contributed to small firms’ increased use of credit cards — up 14% in the past five years alone.
 
“With fewer options in the private market, and in the midst of an economic downturn, it is inexcusable for SBA to make it tougher for small firms to get capital,” said Chairwoman Velázquez. “Affordable financing means access to opportunity.  No one understands that better than a small business owner.  That’s why many are turning to plastic — to keep their businesses and our economy going.”
 
Credit cards have always been a convenient means of payment for small firms — expediting transactions and allowing for considerable ease and security.  Witnesses also discussed how entrepreneurs leverage use of these financial tools, and said they are an increasingly important part of their financial strategy. The testimony also underscored that 70% of small businesses pay off their full balance each month. That gives them the equivalent of 30-day interest-free loans, which makes charging purchases all the more practical. (That’s a good thing!) Witnesses stressed that this is just one example of how credit cards give them the flexibility they need to run their businesses.
 
“Our small firms are facing a considerable financing gap. Viewing credit cards as the tools they’ve become for small firms just makes sense,” said Chairwoman Velázquez.  “We must strengthen what is working in the current system and correct what is not.”

What about you? Have your financial sources dried up? Are you using your credit cards for business cash flow purposes? Leave me a comment. 

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Green Catering – Not Just Wheatgrass

Green Catering – Not Just Wheatgrass

The Coloradoan has a nice profile of Karen Hunt and her five-year-old company A Green Affair.   A Green Affair is an environmentally conscious catering and event design consulting service that brings eco-friendly to any event, including corporate meetings. 

 

Her service isn’t about tofu, wheat grass and bamboo centerpieces.  It’s about organic flours, and flowers, grass fed meats and sustainable seafood.  The menus are luscious and the décor beautiful.  Expanding the socially responsible theme, A Green Affair ensures that leftover food is donated to food banks, so nothing is wasted, and the goodness of the event continues into the community.  

 

Something to chew on if you’re planning a function or if you’re in the catering/event planning industry.  Ms. Hunt expects green to be a permanent part of the business.

 

Read More From The Coloradoan:

 

Woman Turns Events into Green Affairs 
 

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The Intranet: It’s like the Internet… only smaller and much more private

The Intranet: It’s like the Internet… only smaller and much more private

One of the great features of the Internet is how easily data and other information can be shared among users. In fact, this was the original purpose of the Internet – to make sure that data could be shared by various military installations in the event of a nuclear war. Over time, universities “got online” and eventually average users—and here we are today.

Likewise, the navigation of the Web has been streamlined in such a way that information can be retrieved quickly and requires little installed software beyond a Web browser such as Internet Explorer, Safari or Firefox. However, the downside of the Internet is that this information is also available in such a way that it can be found and accessed by other users. So what do you do if you need to share information between selected users—much like the Internet’s original purpose?

Your Own Private Internet

A closed version of the Internet is an “intranet,” which is a private, or at least semi-private computer network. It relies on the basic Internet protocols (those unique addresses that every computer online has), as well as the same type of network connectivity between machines. But unlike a basic Local Area Network (LAN), an intranet doesn’t require that all the computers on this network have to be within the same room or building, thus making it ideal for small businesses that might not have all the users in the same place.

As with the Internet the network can rely on the public telecommunication system to connect distant computers together. The difference is that this semi-closed network is basically protected by firewalls or other encryption, making it like an exclusive club. Outsiders can try to access it, but without the right password or other protocol access is denied.

You can connect to an intranet through your existing connections, and possibly any outside computer. The downside to intranets that are accessible through the Internet is that they are susceptible to hackers, who can attempt to gain access to the entire network.

Thus the security for an intranet should be maintained at all times, especially if important data is housed within it. The ease in allowing information to be shared is too great and improved safeguards such as firewalls and encryption can help to deter hackers and prevent the loss of important information.

Additionally, unlike a small office LAN it also is about more than merely accessing another computer’s desktop or hard drives for file and print sharing. Intranets typically use a Web-styled browser, but also support other features such as FTP and e-mail for the sharing of information and communication with other users. This can allow users to share files without the need for these to be e-mailed back and forth.

Benefits of an Intranet
The main goal of an Intranet is to ease information flow, but limit access to the outside world. This is done to increase worker productivity. For a small business this can mean many things.
*Greater access for all employees, especially for a small- or medium-sized business that must rely on the quick sharing of information between multiple offices or locations. This provides faster and easier access to more accurate company information as well.
*Ease of use for employees, because existing applications such as Internet Explorer can be used to navigate the Intranet. This reduces the need to install specialized programs in many cases and requires little additional training of applications.
*Ease of shared data, reducing the need for printouts.
*Protection of sensitive material. As users log in to a closed network, data does not have to be sent out to users in different networks. Instead, the data is accessed by individuals within the company thus limiting the chances that an individual outside the company might access it.
*Updated information can be available to all users at the same time.

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$500 Million for Green from New York

$500 Million for Green from New York

During an Environmental Advisory Webcast today, Thomas DiNapoli, the New York State Comptroller, announced his Green Strategic Investment Program. 

 

“Clean technology and renewable energy have become increasingly profitable. It’s not just about doing good for the environment; going green is good for the bottom line too”.

 

Focusing on the state’s commitment to reduce both greenhouse gases and dependency on foreign oil; DiNapoli will be increasing the amount of green investment, in the New York State’s Retirement Fund’s portfolio, by $500 million over the next three years.  With $16 million already invested in New York green companies, the fund will be looking for more renewable energy and clean technologies to invest in. 

 

More from WIVB

 
DiNapoli announces $500 million commitment to “Green” investments 

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Your Home Equity Loan May Tip You Into Negative Equity

Your Home Equity Loan May Tip You Into Negative Equity

Right now, mortgage lenders are a little wary. They’ve tightened their credit requirements, making it more difficult to get home mortgage loans. And now it’s starting to affect the home equity loan. Not only are mortgage lenders pulling back on how much they are lending, they are also pulling back on how many they qualify.

And that’s not all. If you have a home equity line of credit, you may have found that it is shrinking. This is because mortgage lenders are reaching into that pool as well, in an effort to mitigate some of the pressure they are feeling in response to credit market stress.

Another thing to watch out for is negative equity. The current decrease in home values across the country may mean that your current home equity loan may have tipped you into negative equity. Take a good look at where you are at, and make sure that your home equity loan hasn’t caused you this problem. And if it has, now might be a good time to start making some extra payments if you can swing them.

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IT Flying Under The Green Radar

IT Flying Under The Green Radar

Dennis Szubert of Silicon.com points that since the IT industry produces as many carbon emissions as the airline industry, they’ve been lucky that they haven’t come under the same environmental microscope that that the airlines have. That luck is bound to run out however, and IT managers need to step in front of their energy consumption, and have a solid, green agenda before the environmentalists come calling.  

 

Using data from Quocirca’s research report, Data Centre Asset Plannning, we can see that IT professionals are still in the dark when it comes to their energy consumption.    Quocirca interviewed more than 300 US, UK and European IT directors, and found that 61% of respondents did not see a reduction of power consumption as a core directive from the business.  Of the companies that had an official carbon footprint reduction policy, only 35% passed it on to the IT department as a formal objective.  Most surprisingly, less than one-fifth of data centre managers have the data centre electricity bill included in their overall budgets, most companies just divide the bill equally between departments. 

 

Read More from Silicon.com

 

IT must be called to account over emissions

 

From Quocirca

 

Data Center Asset Planning

 
 

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Are You a Mother Hen?

Are You a Mother Hen?

I was at a Westfield Mall this weekend and talking to one of the concierges ( I spent more than the minimum amount to receive free parking and was getting my ticket validated – a nice perk).

The staff was incredibly friendly and attentive. A guy [who wasn’t helping me] had his red shirt, black pants and tie uniform on but I noticed a bit of a blue t-shirt sticking out that wasn’t tucked in. Not a big deal at all but I noticed it.

In the middle of all of this, his supervisor came by and was talking to him and then he said, “Hey man, a bit of your t-shirt is sticking out, can you tuck it in?” The guy took note, tucked in his t-shirt and they both went on their way.

THE REAL WORLD RETAILING TAKEAWAY
Hold your employees accountable by managing them on every aspect of their job.

The thing I like about the manager’s approach at Westfield was that it was a simple statement to let the guy know. It wasn’t that he was picking on him, micromanaging him or anything of the sort.

That’s a good manager.

In the retail concepts I worked in, we used to give employees the benefit of the doubt but repeat offenders of not wearing the appropriate uniform were sent home to change. It’s okay to point things out to employees to make them better employees. It’s not okay to point things out to employees that are meaningless and serve as an outlet for your pet peeves.

Every employee, believe it or not, wants to be held accountable. It gives them a reason step up and to perform.

Point out a better way to sell, show them that it’s not okay to have all those merchandise boxes behind the cash wrap, remind them to prop open the front door to welcome guests, show them that folded clothes look better because they are more visually appealing.

All of these things are about having your best foot forward as a retail concept. And every employee has a hand in that. Your job is to orchestrate it and ensure that you’re approaching it as a leader and not as a mother hen pecking away at every little thing. See the difference?

How are you holding employees accountable?

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Design Inspiration Is Everywhere

Design Inspiration Is Everywhere

Time Magazine publishes a Style &  Design issue every quarter.  It’s filled with “the people and ideas behind today’s most influential design.”  I just received the most recent issue bundled with my Time magazine a couple days ago.  You can see the TOP 100 issue from 2007 here.

In the most recent summer issue, a couple of pages were dedicated to retail, with the subhead, “more than ever, fashion and design stores are becoming necessary global manifestations of a particular brand’s stylistic DNA.”  A heady title no doubt, but the pictures and descriptions of the stores were inspiring to say the least.

While a small retailer would find it hard to spend the money that the big guys have, it’s easy to get inspired by the designs.  I walked away with several trends to be mindful of.

THE REAL WORLD RETAILING TAKEAWAY
Retailers tell a story – take a look at my post from a few days back. In all of the store concepts that were featured, story-telling was key.

Keep it clean and simple – merchandise was neatly displayed with a “less is more” mentality.  Don’t overwhelm your customer with too much merchandise.  You’ll look more like a Marshall’s than the specialty retail concept that you are.

Create a sense of discovery – Each store had unique fixtures and shelving that created a store layout which begged their customers to wander and discover.  The Yves Saint Laurent boutique in Paris and the Gucci store in New York both had a museum feel with wide open spaces and sparse fixtures.  The Eco store in London, a store focused on greener living, has an old world feel with nooks, crannies and cubbies filled with merchandise throughout the store.

Create an experience – the Lane Crawford store in Beijing has a technology bar and a live DJ to enhance the experience.  One of my favorite stores is Base in South Beach.  With a CD listening bar, books to browse, scents to smell and accessories, shoes and unique furniture items, this boutique has managed to combine all of them into a seamless, cohesive experience that excites the senses.  Base even carries the experience through to their website, with evocative design and a music track that isn’t just music, but an actual track with rotating songs and the names and artists of the songs listed on the home page (and of course you can purchase music right on the site).

Design inspiration is everywhere.  Open your eyes and ears to what’s around you.  Rip pages out of magazines, take a picture on your cell phone of a retail display or fixture you like.  Then do something with the information.  As small retailers, we can and should always be refining our concept to make it the best it possibly can be. 

How are you finding inspiration? 

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Using Your Old Green Business to Start a New Green Business

Using Your Old Green Business to Start a New Green Business

There’s a couple in Berlin, Wisconsin, who have taken their love for the environment, and their business experience with environmentally friendly practices, and have turned them into a consulting practice.  After building an eco-friendly house, the Mullvilles built an eco-friendly car wash, where the Solar Air system heats the building, and the Solar Liquid collector heats the water.  They’ve now opened a new office, beside the car wash, where they operate Sunny Solutions.  They educate and assist other businesses that want to follow an alternative energy path; including helping them locate grants and tax incentives, and providing them with solar heating systems.  . 

 

More From The OshKosh

 
Sunny Solutions Harness Solar Energy  

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Big Belly Garbage Cans – Solar Powered and Really Neat

Big Belly Garbage Cans – Solar Powered and Really Neat

I love this idea.  Jim Poss has invented the “Big Belly”, a solar powered garbage can for parks and beaches.  Why would a garbage can need to be solar powered you ask?  Because the solar energy is used to power a “super stomper”, that crushes the garbage down to 1/5th of it’s size, which allows for greater time between pick ups.  Greater time between pickup = less fuel spent on garbage trucks. At an average price of $3500 per unit, the company has been able to place 1400 Big Bellies, in 32 states, and 15 countries.  They are also developing a larger model that will handle cans, bottles and newspapers. 

 

Read More At the Bainbridge Islander

 

Business Spotlight: Greening Up The Garbage Cans

 

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