Posts Tagged ‘2010 outlook’

SMBs Need To Get Their Financial Houses In Order

August 1, 2015

If as many economists believe the economy will expand in coming quarters, in order to take advantage of new opportunities or even remain competitive will require many small- and medium-size businesses (SMBs) to seek additional funding.

While never easy, finding funds to maintain current sales and/or fuel growth is expected to be harder in the last quarter of this year and more so in 2016.

It is reported many larger banks are opening the lending spigots, other financing sources are tightening their programs.

Institutional lenders blame the advent of the full implementation of the Sarbanes-Oxley Act as a key reason for the changes. However, there are other factors at work.

None of them make funding searches easier.

Low, low interest rates have helped many SMBs to survive the five year economic malaise.

This life jacket may be sinking as the Federal Reserve Governors just signaled that the low to non-existent interest rates will soon be a thing of the past.

In recent years, new funding sources including crowd funding; websites offering individualized paths to multiple lenders; and other non-bank lenders appeared. These channels have experienced explosive growth as start-ups and SMBs sought funds to stay alive or for growth.

However, federal bureaucrats are beginning to eye these non-traditional financing outlets as avenues through which the opportunities for mischief are becoming more frequent, obvious.

For most of the recent depression, community banks and specialized lending groups were the main sources of funding for SMBs.  Over the past twelve months, these sources have been steadily withdrawing from the marketplace. While larger banks have taken up some of the slack, they have not fully replaced the monies no longer available.

Another factor is these larger banks take longer to make a decision and often require onerous terms.

Recent surveys by Information Strategies, Inc. and others indicate a majority of SMB leaders think good times are ahead.

They also anticipate they will need additional funding to meet the costs of satisfying higher demand levels.

Thanks to the revolution by Internet cloud offerings and other technology advances in simplifying the ability to start a new company, SMB leaders also are recognizing that the number of competitors in all fields will be greater than before the recession.

Given this evolving scenario small business leaders should be acting now.

Mitigating against their efforts are two factors:

The first is that many SMBs have depleted their reserves during the past five years maintaining themselves during the economic downturn. They therefore appear more vulnerable to lenders.

The second is that SMBs have found the funding sources are reluctant to accept much risk in their lending practices.

To improve their chances of finding funding, experts suggest SMBs start lining up credit lines or taking out fixed rate loans or accept those with limited interest rate escalation clauses before then end of the current quarter.

As one expert said: “The time to borrow is when you don’t need the monies immediately. This gives the owner/manager time to shop around for the best possible loan source.”

While difficult, it is important that SMBs have, build, or rebuild a cash reserve.

If indeed the economy is strengthening, now is the time to generate financing to take advantage of those new opportunities.

This Summer, Grow Your Business and Refresh Yourself

July 3, 2015

Summer is the time for growing your small- and medium-size business, not slumbering away hot days.

For many, summer is the time for slackening efforts in the face of hot days and vacation schedules.

For smart small- and medium-size business leaders these months can be used to add sales, expand operations and prepare for year-end efforts.

While competitors slumber in the summer doldrums; it may be an opportunity for your business to steal sales.

At the least, July and August workdays can be used to plan fall campaigns, review year-to-date results, recharge employees, and make changes necessary to close year-end business ahead of plan.

Here are five suggestions for making your business more productive this summer:

  1. Review your business’ first six months results and identify what worked and didn’t work during this period. Include, expand the best performing efforts in the final year-end push.
  2. Take advantage of the slower period to reach out to current and former customers with new ideas, promotions. There is less clutter during this period and the message may stand out better.
  3. Develop a business program for hitting the bricks in September. Customers view this month as a fresh beginning, offer them something innovative.
  4. Use this time to refresh the company’s inner-communications with informal gatherings and perhaps a picnic. Casual Fridays are nice but perhaps a Thursday pizza party or adding flex hours will appeal to your staff.
  5. Above all, for small- and medium-size business leaders used to 24/7 work weeks it is important to recharge their own batteries. Leave the business alone for one day a week and let others take charge. The results will most probably surprise those leaders.

Happy Summer!

2010 — A Year Of Opportunities

December 30, 2009

While many companies are still pulling in their efforts, a surprising number are expanding.
Our 2010 Small Business Outlook Study is showing surprising strength.
In fact, compared to last year’s survey, budgets are up an average 7% for such items as sales, marketing and IT resources.
What is down are salaries, employee benefits and bonuses.
Hiring plans are level with few companies reporting plans to expand staff.
Sales and marketing groups are being augmented but the big investment seems to be in Internet sales and customer service.
If you want to take the survey,
We are seeing a significant proportion of smaller firms saying they are investing in sales efforts.
Confusion reigns about what healthcare benefit costs as well as planning.
Most respondents don’t think the new healthcare legislation will have a positive effect on them.
For marketers to small businesses, the watchword should be value.
Marketers must demonstrate how will their product or service help clients add to profits.
The survey shows surprising strength for companies offering value-based products and services.
One cloud on the horizon — many firms are cutting back on travel expenditures.
The recent terrorist attack didn’t help with some firms reporting they had put off travel plans until February.
Regardless of what happens in the early months of 2010, smaller firms seem bent on making 2010 a positive year.