I saw this video on my friends site at http://www.monyeandyou.com
I think it says it all. Check it out…
Entrepreneur vs Employee from FIVOSZ on Vimeo.
As a business owner you have a few certainties in your business life:
You need customers to survive.
You’ll have a roller coaster ride of emotions starting and growing the business.
Without a good bookkeeping system you’ll never know exactly how much profit there was.
Competition is everywhere sooner or later.
And of course, the need for cash flow (capital).
At a minimum there will be the desire to have access to capital regardless if you have to use it or not. Capital can come in several forms. It can be a stash of cash you keep in an account only for emergencies. It can be a credit line (also known as a life line to many businesses) from a bank. It can be a credit line from an alternative financing source. It can be an investor willing to contribute capital to the business.
No matter how you establish access to capital it’s important to have that “life line”. As many of you have heard before the statistics for small business failure are very high in the first year and most don’t survive five years in business. In fact only 4% of business start-ups will ever reach $1,000,000 in annual revenue. That’s right – just 4%, shocking I know. I was surprised myself to realize the low probability of becoming a millionaire as an entrepreneur, although if you compare it to winning the lottery, your chances are much greater for success with starting a business.
So what do you need to do to get that critical “life line” so many entrepreneurs and small business owners require to survive? The answer to that question could be a series of books describing every detail of raising capital and obtaining a loan. In brief they are: Credit, Collateral and Capacity.
Sales are to a business as the heart pumping is to life!
So why not have a system for sales. A system is a specific, effective and repeatable way to do something.
The READ selling process is as follows:
People are not sold, they decide to buy based on their own reasons, not yours. Selling is not about personality, it’s about process. Keep in mind when you are selling (which is about 90% of the time in business) people buy based on emotions and justify with logic. Have an emotional reason for people to buy something from you, but also have facts to back up why they made their decision once they go home.
First, I don’t believe the government should be the ones telling banks what to lend or not to lend. The banker is the one that needs to decide if someone is a good credit risk or not based on what level of risk they want to or can take on at the time they are going to lend.
The challenge however is what people consider small business. Politicians are always so tricky with how they use their words. Small business is so broad it could mean a 1 person operation working from home up to a 499 employee company with six locations in 3 states generating $50,000,000 in revenue.
The small business owners who really need access to capital right now are the ones that are the highest risk and the least likely to get financing. These are the 1-5 employee companies under five years old. They see the opportunity to grow and add jobs by taking market share from other companies that are struggling to keep the doors open because they grew too fast or had too much overhead. These small business owners can really drive the local economies and initiate job growth again. The challenge is they aren’t qualified businesses or borrowers 80% of the time. They either have low FICO scores or their financials don’t justify the loan amount they want or need. Most of these companies are seeking $25,000 to $250,000.
When I talk to the banks about programs for these companies they send you to their credit card division where the approval process is strictly driven by FICO score and years in business (which these clients lack.) The government and news talk about small business lending and getting it going again, but what they refer to are the companies with 100-500 employees and are looking for $500,000 – $5m in loans. I’m sure these companies can help create jobs also, but the reality is there are A LOT more 1-5 employee companies than 100-500 companies.
The SBA community express loans do help the smaller 1-5 person operation but most small entrepreneurs aren’t aware of these loans and banks aren’t interested in spending a lot of time writing them. It is still a lot of paperwork with little money for the bank, so they prefer to write larger loans and lower their risk with bigger companies. I don’t blame them for that. A great resource for the 1-5 person business is friends, family and smaller angel investors. They can even look at peer to peer lending sites such as www.prosper.com.
So in my opinion the politicians are just a lot of talk, posturing to look good in the media so people think they are “small business” friendly. It’s actually an oxymoron to say politician and “small business friendly” in the same sentence. Government won’t create the free market jobs, they just need to get out of the way and let the small business owners do it themselves.
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The best business tool I’ve used during my last 20 years of starting, growing, financing and selling companies is….
Attending seminars and events.
There is no other business tool that can provide so many benefits all at once. I’ve not only met people from all over the world who I could call up and go to dinner with when in town, but they are also great people I can potentially do business with in the future. The contacts and network I’ve built over the last 20 years just by attending seminars and events is priceless.
Of course the education is invaluable as well. I’d much rather learn from others experience of having tried and failed than doing it myself and making the same mistakes. I’ve saved potentially millions of dollars by listening to others approaches in business of how they did things and what worked and didn’t. I’ve taken those lessons and implemented them in my businesses to create multi-milllion dollar companies.
Nowhere else can I find the education, experience and knowledge of so many other entrepreneurs all in one place than at a business seminar. Now, if you think “I’m not the seminar attending type” or “I don’t like crowds”, etc. etc. I was there too once. I use to think it was a waste of time and I am not a very outgoing person so I’d rather be at home with my family than traveling to attend an event with a bunch of strangers, but I know attending these events helps me grow as a person and catapults my business ahead of any competitors.
Which is why I’ve taken the time to build a core team of amazing entrepreneurs to help build our seminars at Earn.com. The testimonials alone tell you the value the events have provided our members already. Go to www.bbseminar.com to hear and read what many of our attendees have had to say.
If you are looking to start a company, build a business, need financing, investors or just want to build your knowledge and network you can’t miss our next Business Breakthrough event in November. Go to www.bbseminar.com for details. We are offering one night free hotel stay at the event hotel included in the cost of attending so sign-up now. Don’t miss out, our last Business Breakthrough event sold out weeks ahead of time.
Looking forward to seeing you all there.
When do you need to put a business plan together for your company? I was sitting around a table with several very successful business owners over the weekend and one of them asked: “Where can I get a business plan written with a professional writer. I’m setting up a new company soon and would like to get one done.” Of course I told her to see me, as that is something we do for businesses across the country. Then I asked if she or anyone at the table had created a business plan for their existing business.
The answers were interesting. There were twelve of us at the table. All twelve had put something in writing before or during their start-up phase. What they put in writing varied, but all included goals with a few action items. The SBA recently came out with a study that those who develop a business plan are six times more likely to succeed than those that don’t.
So having a business plan is critical for future success, but what exactly should that plan have in it and is it critical for getting financing?
Of the twelve at the table only two had actually hired someone to write a complete and detailed business plan for their company. The other ten had just created their own. Everyone had a different idea of what the plan should include, but there were commonalities.
It was unanimous that you had to have goals for the next year. Most felt it was important to have goals for the next five years. Everyone also believed that you needed to have projected financials for a minimum of three years. Without the three years financials there wasn’t any way to really know if the business was worth starting or continuing. There were three people at the table who had other business ideas they wanted to do and after pulling together the three year projections they chose not to move forward with the business.
When developing a business plan for a new business idea, I would highly recommend starting with the financial projections. After all, you are getting in to business to make money so you want to make sure the business can generate a profit. This is also critical for seeking investor capital. If someone is going to invest in your business they will need to see financial statements.
When you apply for loans or other financing the need for the business plan and financial statements may not be needed by the lender. That is to say the lender may not ask for this documentation in every case, but you should have it in order to project if you can pay back the loan you are applying for.
Many of us have heard the quote from Alan Lakein bestselling author on Time Management – “Failing to Plan is Planning to Fail”.
We should take this advice and use it in our business every day. Planning is a must in business, but it’s also not the only part.
Here are a few other quotes from Mr. Lakein:
“Planning is bringing the future into the present so that you can do something about it now.”
“You cannot do a goal. Long-term planning and goal-setting must therefore be complemented by short-term planning. This kind of planning requires specifying activities. You can do an activity. Activities are steps along the way to a goal. Let’s say you desire security. Putting $10.00 in the bank or talking to your stockbroker about your investment plans are activities that will move you toward you goal.”
Take action today on your plan and create a ritual of doing that every day. With a minimum of one step every day you’ll get to your goal. However, having a business plan creates the map so you don’t take steps in the wrong direction. You’ll get to your goals a lot faster with a plan and daily action.
David Gass – Founder
Business Credit Services, Inc.
www.bcscredit.com
This is a question I really want an answer to. What are you willing to pay for a $100,000 credit line in your business name?I started thinking about this when one of our lending managers received a call from a company who offers $100,000 credit lines to small business owners. The requirements for approval seemed relatively simple, have a FICO score of 680 or better and a business license. Our manager was obviously intrigued based on today’s lending climate.
He spent quite a bit of time working with the company and their underwriters to completely understand their process and requirements before we started offering it to our clients. They told us there were other companies similar to ours offering their program and we should jump on board.
Obviously as part of our due diligence we spend time researching a company before we refer our clients to them. I don’t just jump in based on someone telling me our competitors are doing it. I always do my own due diligence first. In addition we want to see all the paperwork a client would have to sign so we are completely informed of what they are expected to do.
It was during this phase of research we realized what they were charging the clients.
I don’t want to tell you just yet what that figure is. I need to prepare you first, so you don’t fall out of your chair.
When I first founded BCS we spent a lot of time researching companies offering bank lines of credit for small business owners up to $50,000. The line was provided with a good personal FICO score, business credit score and reported to the business credit bureaus so it didn’t show up on your personal credit report. It was a pretty good deal to have four or five of these credit lines even though you may have personally guaranteed it because it wasn’t showing on your personal credit report.
Imagine having access to $250,000 any time you needed it and never having it damage your borrowing ability personally. That’s what many of our clients were and still are able to do with good personal and business credit. Yes, there are some of these programs still available although less than 40% of what it was just 2 years ago.
When we first researched these banks we found brokers who were offering these lines to small business owners for a 5-10% fee when they got them the line of credit. I suppose I can understand someone paying for someone else to research the banks and find them so you don’t have to hassle with applying and getting denied by banks with stricter requirements. The more you apply and get denied the less likely you will get approved when you find the bank that you could have gotten credit with initially.
Even so these companies were charging up to $25,000 for $250,000 in credit lines. If you were to break that down as an annual percentage rate in addition to what the bank charged you would find annual percentage rates of 400% or more. Average credit cards are running 15%
When I saw what everyone was charging to do this, I decided to research the banks ourselves and offer our Business Credit Builder clients access to the list and requirements free of charge. They wouldn’t pay anything extra to know who the banks were, saving them up to $25,000. Obviously for an investment of less than $2,500 with BCS to do much more than just find an application but rather build their business credit profile, a $25,000 savings was worth the initial investment.
So back to the company we just found today offering $100,000 credit lines. In the paperwork we found that they were no different than these other brokers we have seen in the past charging finder fees for getting them the financing. However, this time possibly because it’s more difficult now than ever to obtain small business credit, they have increased the fee to 29% up front when the credit line is secured. In addition they said if you want to make money too just add whatever you want on top of that. That means some companies out there brokering this company’s services are charging upwards of $35,000 for a $100,000 line of credit.
If you could qualify for this line of credit you can find another one somewhere else for no fee.
Please do me a favor and the next time someone wants to get you a credit line ask what all the fees are. It’s really not worth the money for what these sharks are charging.
David Gass – Founder
Business Credit Services, Inc.
www.bcscredit.com
“Men are not prisoners of fate, but only prisoners of their own minds.” – Franklin D. Roosevelt
To begin, let me ask you some revealing questions. As a business owner, can you walk away from your business today for one or two months and come back to find it operating smoothly and profitably? Can you even escape for two weeks? Have you ever had a work-free vacation? If your answers are “no”, you don’t have a successful business, you have a glorified job in which you are trapped! You don’t have an effective business system; you are the business system! In a large sense, you are a prisoner of your own success.
No matter what industry you are in, you should not be a prisoner to your business! If you are, you have it backwards. Your business should serve you and your dreams. It should give you greater freedom, not less. In fact, your business, properly designed, should function practically without you, not because of you. It should run predictably and automatically whether you are in the office or not, in the store or not, out in the field or not, on vacation or not. Your business should not depend upon your presence, personality, problem solving and perspiration for its daily survival. If so, your business does not work, you do!
Bottom line, you should run your business; it should not run you, your family or your life. Your business should work harder so you don’t have to. It should be systems-dependent and not owner-dependent or expert-dependent for its success. It should have its own heart, mind, and soul – it should not steal your vital organs and spirit!
Stop for a moment and think of the consequences. If everything in your business flows through you and is dependent upon you, then you are restricting dramatically the growth and profits of your company. As a single human being, there are natural limits to the amount of work, transactions, problems, and decisions that can flow effectively through you in a given day. Stop being a bottleneck or clog. Otherwise, you will continue to restrict the potential of your employees and business and ensure your persistent exhaustion. Stop missing out on greater personal freedom, money and happiness.
If you would like to achieve greater freedom, fulfillment and financial returns from your business, visit www.earn.com. Earn.com is our new community for entrepreneurs and we are registering the first 1,000 members at no cost to you. You get free access for 30 days for providing us feedback on how to improve the community. After 30 days it’s only $24.95 per month to continue.
David Gass – Founder
Business Credit Services, Inc.
I would like to respond to one of our readers and let everyone know I do read your email responses and will reply to some. I felt if someone took this much time to respond to one of my emails I send to you, it was only considerate to respond to his questions. I have posted his email and below that my response. Have fun reading and I hope you learn some things along the way.
*************************************************************
From: “Richard E”
To: “David Gass”
Date: Tue, 3 Mar 2009 15:34:52 -0500
Subject: Re: I honestly need your help….
Who are you and why does the United States of America back your scam?
David, have you ever owned a business? Did you get it the honorable way,
inheritance? Do you have anything real to offer a small business like mine?
The problem with services like yours is you just want the money. You are
willing to whore yourself out to anyone dumb enough to ask for your advice.
Unfortunately, you really don’t have any idea of what it is like out here.
I have a credit score of right around 800, yet I can get no increase in
credit. I have a net worth of around 500,000 and yet I am rejected when I
ask for a credit increase from 13000 to 30000. Why?
Do I have to get workers comp?
How do I attract more customers?
Should I knowingly break the law and have a booth at local flea market, I
know another dealer has operated illegally there for years?
Should I hire employees to sell or just 1099?
Should I advertise in the newspaper?
Should I advertise on the local cable?
How can I sell an item that costs over $2000 if I cannot get any consumer
financing?
Do you have any real answers for real problems of just the same general crap
that others seem to pedal for money.
Don’t want to be too mean but why should someone like me listen to someone
like you.
I could spend the whole day listening to Warren Buffet that seems obvious,
who the hell is David Gross?
Richard
Either come up with something real and substantial or just delete me from
your time wasting emails. Better yet just delete me.
*********************************************************************
Richard -
Thank you for your email. I understand your skepticism. Yes, there are a lot of online companies and people sending emails offering services, products and advice – some good, some not so good and some downright scams.
I would normally not even respond to an email like yours. However I found some of your questions very interesting, so I thought I would respond. Your questions are in bold and my response follows:
Who are you and why does the United States of America back your scam?
Our company does not run a scam nor would we be listed on the partner page of the IRS and SCORE or be on the Inc5000 list two years in a row or would we have operated our company for the last nine years successfully.
David, have you ever owned a business?
Yes, several. I have built several companies from scratch and sold them successfully. The latest of which is Business Credit Services. I started the company in October of 2000 with $200 and a computer out of my office. Eight years later we do more than $5 million in annual revenue and were listed on the Inc5000 fastest growing companies list two years in a row. This brought the attention of CSC – Corporation Service Company (the largest and oldest incorporating firm in the United States) to acquire BCS from me in October 2008. I don’t think a company of this level would have ever purchased a scam.
Did you get it the honorable way, inheritance?
My father was a school teacher, stay at home mom and three brothers. We were lucky to go to McDonalds or Pizza Hut once a week for dinner. We weren’t poor, but inheritance???? I don’t think so. Thankfully my parents are still alive, so no, no inheritance.
Do you have anything real to offer a small business like mine?
Go to http://store.bcscredit.com, www.earn.com and www.incorporate.com If you can’t find anything real at these sites I don’t know what to tell you. We offer free webinars weekly for small business owners – go to the www.earn.com site to sign up.
The problem with services like yours is you just want the money. You are willing to whore yourself out to anyone dumb enough to ask for your advice. Unfortunately, you really don’t have any idea of what it is like out here. -
Yes, we are interested in making a profit. That is the point. If you don’t make a profit, the business won’t be around very long. However, I believe there are three key principles in entrepreneurship. They are: Learn, Earn and Return. You have to learn first that you don’t know it all. You have to learn that others sometimes have the advice that will help save you a ton of time and money and then take the advice and coaching and do something with it. Those that act eventually Earn. Once you have earned a living you need to give back – RETURN. I work with several groups to give back but the one I spend most time with is the high school students. I believe teaching, coaching and advising students will make a difference in our country’s future. If we can get through to just one student each time we talk to them and they do something to build a business and create jobs we are doing our part to continue to build this great country.
I have a credit score of right around 800, yet I can get no increase in credit. I have a net worth of around 500,000 and yet I am rejected when I ask for a credit increase from 13000 to 30000. Why?
I’m sure there are several factors involved in the reason why so it’s difficult to say. I will tell you however if you are a corporation or LLC and have more than two years in business you shouldn’t have a tough time getting any financing with an 800 fico. I would suggest talking to a local credit union or community bank for a line of credit.
Do I have to get workers comp?
If you hire an employee you need workers comp. It’s up to you if you want to have workers comp if you are the only employee.
How do I attract more customers?
Have a valuable product or service. Attracting companies is easy when you have something of value. Of course it’s important to have good marketing and advertising but a valuable is key.
Should I knowingly break the law and have a booth at local flea market, I know another dealer has operated illegally there for years?
Never knowingly break the law. I believe in doing things the right way the first time so we don’t have to clean up our mistakes later.
Should I hire employees to sell or just 1099?
There are IRS guidelines you have to follow that will tell you if you can hire someone as a 1099. Here is some information about that. http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
Should I advertise in the newspaper?
Try craigslist.com its free and you can test headlines to see what works before spending money in the newspaper.
Should I advertise on the local cable?
Use www.spotrunner.com to test television commercials for very expensive rates.
How can I sell an item that costs over $2000 if I cannot get any consumer financing?
You can try working with a lender to offer a lease on your product or provide payment terms yourself. You would build a book of receivables and potentially be able to factor those receivables for cash upfront.
Do you have any real answers for real problems of just the same general crap that others seem to pedal for money?
We have helped over 15,000 clients obtain over $1 billion dollars in financing. Our parent company has incorporated over 200,000 small businesses and is the resident agent and incorporator for more than 50% of the Fortune 100 and public entities. Yes, we believe we offer real solutions to real problems.
Don’t want to be too mean but why should someone like me listen to someone like you.
I believe it’s up to you to decide who you want to listen to. If you feel you are getting good information continue to read our FREE blogs and listen to our FREE webinars. If you want to hire us because you believe we offer great value, we would love to have you as a client. If you don’t see the value, then you don’t need to continue to read our emails or get our information, just click unsubscribe at the bottom of our emails to opt out.
I could spend the whole day listening to Warren Buffet that seems obvious, who the hell is David Gross?
Actually, it’s David Gass. You can read many of my articles, books and listen to some radio interviews by going to our media center http://bcscredit.com/business_credit_tab/press_media.php
or just Google “David Gass” and see my articles and information posted on hundreds of thousands of websites across the world that others have copied to their sites because they saw value in the information. I don’t believe it’s an either or. Listen to Warren Buffet or David GASS, I believe you can listen to both. Warren Buffet is amazing at what he does and is very smart. He has built an amazing business that very few people have done and he has given most of that fortune away. I respect the man very much. However, I don’t think he would have responded to your email. That’s why people work with me. I’m reachable.
Either come up with something real and substantial or just delete me from your time wasting emails. Better yet just delete me. You can click the link unsubscribe at the bottom of any email we send. We don’t send emails without an unsubscribe or email to reach us. Anyone can unsubscribe at any time, just click the link at the bottom of the email.
I hope if you didn’t get some value from my response at least someone else reading this does. It is meant to provide real answers to questions from someone courageous enough to ask.
David Gass – Founder
Business Credit Services, Inc.
www.bcscredit.com
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