Top 10 Reasons You MUST Join Your Local Chamber of Commerse

As a business owner, you may feel that your days are too full already and joining the local chamber of commerce (CoC) will be too time-consuming. Think again — the real question is whether you can afford not to join the CoC. The advantages that these worthy organizations confer are well worth the time invested, and your business should benefit by increased networking and timely information about your community and your industry.

Here are the 10 top reasons for joining your local CoC:

  1. Credibility
    The general public holds the CoC in high regard, and being affiliated with one helps burnish the reputations of members. You’ll also improve relations with other businesses, especially if they too are CoC members.
  2. Visibility
    Hanging a CoC plaque in your front window or on your office wall announces to the world your ambition to make your business the best it can be. You get the added visibility of a listing in the CoC newsletters and social media sites, as well as specialized CoC publications. You can join in and advertise at CoC events and fundraisers, which should generate goodwill in the community. All in all, CoC membership is a big boost to your public relations.
  3. Networking
    You can capitalize on a great opportunity by joining one or more CoC committees. Not only will you make important connections with your fellow businesspeople, you may also rub elbows with local politicians and other community leaders. Pick a committee where you can make a difference that will help both your business and the community at large.
  4. Democracy
    Speaking of politicians, your membership in the CoC helps you advance your own interests on the tough political and social questions of the day. Don’t just complain about high taxes, red tape and over-regulation, do something about it by helping the CoC confront misguided representatives with the truth. CoC fights to keep free enterprise free and ensure fair treatment for all businesses.
  5. B2B
    Nothing promotes business-to-business relationships like membership in the CoC. Your fellow business owners become like an extended family, and you are likely to increase commerce with your fellow members. No other organization does a better job at promoting local connections and networking opportunities.
  6. Information
    A local CoC is a one-stop source for all kinds of local, regional and national information important for the success of your business. CoC sends out newsletters with community updates and the latest information that can help you run your business. The CoC community calendar lets you plan your time so that you can attend important events — don’t underestimate the promotional value of these occasions. Naturally, it’s wise to invest a few dollars placing ads in the local CoC publications.
  7. Recommendations
    One nice fringe benefit of CoC membership is all the recommendations you are likely to receive from other CoC members on behalf of vendors and consumers seeking new relationships.
  8. Special Events
    Throughout the year, you’ll find that the CoC offers many special events and programs that can enlighten you and give you additional networking opportunities. It’s a fun way to generate new leads for your business.
  9. Advertising
    Advertising via a CoC vehicle adds extra punch to your marketing and promotional activity. Fellow CoC members take note of and appreciate money spent on advertisements in CoC publications and media, since this helps grow the organization.
  10. Discounts
    CoC members enjoy a number of special discounts and exclusive services offered by other members. You might be able save money on, for instance, office supplies or phone equipment.

As you can see, the CoC is a useful ally as you develop and grow your business. Don’t wait another moment — join your CoC today!

Understanding When Your Business Needs Funding

Just about every business, big or small, needs financing. You have to remember that you can have profits without having much money in your bank account. If you run short of cash, it will negatively affect the entire business, including paying for:

  • Startup costs
  • Inventory purchases
  • Payables
  • Uncollected receivables
  • Other uses for working capital
  • Capital expenditures

Funding Facts

Small business funding is available in the form of debt and equity. If you are a small business, you may not have a way to raise equity, and/or you may not want to be selling partial ownership to someone else.  Selling equity in a rush to the wrong person, can put you in a place where you feel like your hands are tied in decisions that should have been completely yours to make. Thus, you are more likely to use debt as a means of raising funds. You use the small business funding to pay your bills and to grow your business. While it’s possible that you have enough cash in the bank to finance all your needs, the great majority of businesses rely on at least some outside money to start operations, undergo an expansion program and/or replenish their working capital (current assets minus current liabilities).

Roadblocks to Success

If you are a well-prepared business owner, you’ve assembled a business plan that includes your estimated cash flows. Whenever you project negative cash flows, you will need additional funding through equity or debt. In other words, it’s time to take out a small business loan when you are depleting your cash.

The most notorious cash flow culprit is accounts receivable (A/R). Simply stated, if you extend credit to customers, you will always run up against a few bad apples who take forever to pay their bills. If you make cash inflow estimates of $10K a month and even have sales figures that meet this target, slow collections can result in a cash shortfall. Eventually, you hope to collect at least 95 percent of your A/R, but the longer it takes, the more you will need funding.

As you are waiting for your credit customers to cough up the cash, you still must pay bills to vendors, lenders, the IRS, employees, etc. These folks are not interested in your collection problems –they want to be paid on time. That’s when timely commercial small business loans, such as the ones available from IOU Financial, are just the ticket to get you over the rough patches.

Startup Costs

Another common use for external funding is to pay for the costs of starting your business. To earn money, you have to spend money, and during the startup phase, you are spending aplenty but earning nary a nickel. A startup loan will allow you to purchase the equipment, space, merchandise, recruitment, insurance and dozens of the other things you need in order to open the business.

Going back to your business plan, a startup should have a pretty good idea of how much funding it will need before it can begin selling products or services. The plan will show the necessary borrowing, including a realistic assessment of the interest costs and the payback period. It’s a complete red flag if you can’t secure the funding you need to start your business — better rethink the whole thing. Perhaps you can modify your plans to make them more modest. One strategy is to start very small and then use profits to bootstrap your growth. If even a modest plan can’t scare up enough small business funding, you might have to abandon the whole idea. That’s how capitalism works — allocating resources where they will do the most good (i.e. bring the highest returns on investment).

The bottom line is not to be surprised that you will need financing from time to time. Even healthy established businesses need to take out working capital loans in order to continue to grow.  The solution is to identify reliable lenders, such as IOU Financial, who will have the cash ready for you when you need it. By carefully husbanding your money, you can grow your company and enjoy the fruits of your labor.

What Businesses Benefit the Most From Lower Fuel Costs?

In reality, it’s hard to find many businesses that don’t benefit from lower fuel costs. The biggest losers are oil producers, who receive less revenue for their inventories. This also depresses business activity for oil explorers and producers of alternative energy solutions, since they now have more price competition from cheaper oil and gas. But let’s not shed too many crocodile tears for Exxon and BP. Instead, let’s celebrate the winners.

And The Winners Are…

  1. Transportation Companies: Operating costs for airlines and shipping/delivery companies are much lower when oil and jet-fuel prices fall. Perhaps this will trickle down to a reduction in ticket prices and shipping charges, but somehow these prices never seem to decline. At best, we are not likely to see new fuel surcharges anytime soon.
  2. Automakers: For better or worse, Americans like big, gas-guzzling SUVs and trucks. Lower fuel costs stimulate sales of the mega vehicles, which are far and away the biggest profit-makers for the automakers, especially for the Detroit Big Three. That might also mean more tax revenues and better times for people living in Michigan and other states that produce trucks.
  3. Manufacturers: Petroleum provides a wide variety of organic compounds used to manufacture chemicals, plastics, textiles and a huge assortment of other materials. Lower prices for raw materials means fatter profit margins for manufacturers, and may increase price competition. Wouldn’t that be lovely?
  4. Utilities: Lower fuel costs are great news for fossil-fuel utilities, such as electric generation companies. But there are a couple of caveats. State overseers may require utilities to roll back prices. If that happens, consumers may use more electricity, increasing demand for generation companies and possibly increasing the possibility of brown- and black-outs this summer.
  5. Farmers: Many farming costs are tied to fuel and petroleum costs. Items like fertilizer and insecticides that use organic chemicals may fall. It will cost less to fill the gas tank of tractors and combines. The cost of getting produce to market will decrease. Special exception for corn growers — the lower cost of oil means more price competition for ethanol, so corn producers may find themselves selling corn for food instead of fuel, which may be a less lucrative trend for them. It will cost less to feed corn to livestock, which might mean lower meat prices.
  6. Travel Industry: If lower fuel costs translate into lower ticket prices, people might be more willing to fly to vacation destinations in America and around the world. Travel agencies and travel websites, as well the hospitality, restaurant and entertainment industries, will benefit from this trend. This also bodes well for car rental companies, Greyhound and Amtrak.
  7. Liquor Makers: A huge percentage of the price of your favorite bottle of bourbon stems from taxes. But the cost of production involves many processes that directly or indirectly require fuel, including acquiring grain, creating mash, distilling alcohol, bottling and distribution. Once again, liquor prices seem to be on a one-way up-escalator, but we can always dream.

It’s obvious that the American consumer is the biggest winner when fuel prices decline. Lower prices on gasoline and on products that have costs tied to petroleum mean more money in the wallet of John Q. Public. This drives demand, boosts the economy and increases the demand for investments in new plant and facilities. If your business finds that demand is outstripping your production capacity, consider a loan from IOU Financial to finance expansion. Interest rates are still low, so now is a great time to anticipate greater demand and grow your business.

Avoid Roadblocks to Your Success

Just about every business, big or small, needs financing. You have to remember that you can have profits without having much money in your bank account. If you run short of cash, it will negatively affect the entire business, including paying for:

  • Startup costs
  • Inventory purchases
  • Payables
  • Uncollected receivables
  • Other uses for working capital
  • Capital expenditures

Funding Facts

Funding is available in the form of debt and equity. If you are a small business, you may not have a way to raise equity, and/or you may not want to be selling partial ownership to someone else. Thus, you are more likely to use debt as a means of raising funds. You use the funding to pay your bills and to grow your business. While it’s possible that you have enough cash in the bank to finance all your needs, the great majority of businesses rely on at least some outside money to start operations, undergo an expansion program and/or replenish their working capital (current assets minus current liabilities).

Roadblocks to Success

If you are a well-prepared business owner, you’ve assembled a business plan that includes your estimated cash flows. Whenever you project negative cash flows, you will need additional funding through equity or debt. In other words, it’s time to take out a loan when you are depleting your cash.

The most notorious cash flow culprit is accounts receivable (A/R). Simply stated, if you extend credit to customers, you will always run up against a few bad apples who take forever to pay their bills. If you make cash inflow estimates of $10K a month and even have sales figures that meet this target, slow collections can result in a cash shortfall. Eventually, you hope to collect at least 95 percent of your A/R, but the longer it takes, the more you will need funding.

As you are waiting for your credit customers to cough up the cash, you still must pay bills to vendors, lenders, the IRS, employees, etc. These folks are not interested in your collection problems –they want to be paid on time. That’s when timely commercial loans, such as the ones available from IOU Financial, are just the ticket to get you over the rough patches.

Startup Costs

Another common use for external funding is to pay for the costs of starting your business. To earn money, you have to spend money, and during the startup phase, you are spending aplenty but earning nary a nickel. A startup loan will allow you to purchase the equipment, space, merchandise, recruitment, insurance and dozens of the other things you need in order to open the business.

Going back to your business plan, a startup should have a pretty good idea of how much funding it will need before it can begin selling products or services. The plan will show the necessary borrowing, including a realistic assessment of the interest costs and the payback period. It’s a complete red flag if you can’t secure the funding you need to start your business — better rethink the whole thing. Perhaps you can modify your plans to make them more modest. One strategy is to start very small and then use profits to bootstrap your growth. If even a modest plan can’t scare up enough funding, you might have to abandon the whole idea. That’s how capitalism works — allocating resources where they will do the most good (i.e. bring the highest returns on investment).

The bottom line is not to be surprised that you will need financing from time to time. Even healthy established businesses need to take out working capital loans in order to continue to grow.  The solution is to identify reliable lenders, such as IOU Financial, who will have the cash ready for you when you need it. By carefully husbanding your money, you can grow your company and enjoy the fruits of your labor.

10 Reasons Why Your Business Must Go Paperless

Going paperless isn’t only for “tree-huggers” any more. Sure, cutting down or eliminating paper from the office is an extremely valuable contribution to the planet’s ecology, and companies that are green-certified, like IOU Financial, are doing their bit to improve the planet. However, gong paperless pays dividends in many ways that actually affect a company’s bottom line. Here are 10 benefits a company can reap by going paperless:
1. Security While a lot of what gets written down during the day is of little lasting value, firms that keep their important files on paper are at the mercy of prying eyes. A disgruntled or dishonest employee might go through company file cabinets and steal confidential information — like Social Security numbers or credit card numbers. Electronic files are password protected and often encrypted, which makes them harder to steal and also keeps track of all accesses.2. Supply Costs

There may be some upfront costs for training, hardware and software when you go paperless. You get paid back by saving money on paper, pens and pencils, paper clips, hole punches, shredders, erasers, white-out, Scotch tape, staples, thumb tacks, reinforcements, highlighters, clipboards, binders, and more. Often, the payback period is well under a year.

3. Printing Cost

Imagine a world without printers. We wonder if you can. A world without ink cartridges, and printer maintenance people too. Imagine all the people, working without hard copies. It’s a dream, and you can join.

4. Missing Documents

Documents are innocently misfiled, damaged or lost every day in millions of offices across the U.S. This can have repercussions ranging from mild to disastrous. This won’t happen on a well-maintained digital document system that keeps backups in the cloud.

5. Photocopier Costs

Big photocopy machines can be very expensive to buy/lease and maintain, and of course they consume a lot of paper and toner. Paper jams are wasteful of employee time and create frustration and higher maintenance bills. Electronic documents can be shared at will — you don’t need no stinkin’ copiers.

6. Labor Costs

Paper has many unseen costs — ordering, tracking, receiving, storing, distributing, filing, retrieving, re-filing, shredding and disposing, to name a few. Think of how many hours a month your office could be saving by dispensing with these tasks.

7. Email

Blessing in Disguise Department: You will undoubtedly see an increase in email if you eliminate paper. Take this as an opportunity to set up a proper email management and document handling system that files, backs-up and keeps track of emails for easy access and retrieval.

8. Storage Costs

Big companies spend zillions on paper storage costs. There is the space set aside that might be used more productively or not at all (think rented storage space) plus all the storage and warehousing operations. Nothing burns faster than a warehouse full of paper (well, excluding offshore oilrigs), which creates insurance costs.

9. Disaster Recovery

Speaking of fires and such, what happens to all those paper files when disaster strikes — fires, flood, earthquakes, tornadoes, terrorist bombings or whatever? If you’re paperless, all your important files are backed up in the cloud, safe and secure. You can temporarily relocate and have all your electronic documents immediately available, safe and undamaged.

10. Customer Service

For an irate customer or vendor on the phone, nothing could be worse than a harried employee trying to locate the caller’s papers. Prevent violence, or at least violent words, by having all information in searchable, electronic form. Many firms recognize incoming phone numbers and automatically retrieve the appropriate files before an employee answers the call.
We’re sure we could think of some more blessings that accrue from eliminating paper, but we think if you’ve read this far, you are convinced. Tell us the benefits your business has seen (or would see) by eliminating paper! The good public relations you receive by going green are, after all, another important benefit!

Ask An Expert: Kevin O’Leary Discusses Debt vs. Equity

Ever wonder when the right time is to sell equity in your company vs. using a loan to get you to the next level? Kevin O’Leary from ABC’s Shark Tank talks about the right time and place for each. And that IOU Financial is his preferred Small Business Lender. Visit us at www.ioufinancial.com.

America Runs on Small Businesses (Infographic)

 We wanted to share this great infographic on what small businesses really mean to the American economy, found on Entrepreneur, created by business management software firm Sage.

small business and economy infographic

The Current State of True “Small Business” Lending

Last month, a subcommittee on Economic Growth, Tax, and Capital Access held a hearing titled, ”Where Are We Now? Examining the Post-Recession Small Business Lending Environment.” As I listened to witnesses explain to our policymakers the current state of small business lending in our country, I realized just how deep the REAL problems are.

For banks, compliance and regulation are staggering, making it cost prohibitive for them to make “small loans to small businesses.” I quoted that because I agree with the CEO of Dun & Bradstreet, including his comment that we need to all ”get on the same page” when it comes to the definition of small business. Look up the SBA’s definition and you’re labored down by employee count, NAICS Code lists, annual revenue standards by SIC code, etc.

When most of us think of a ”small business,” we think of the dry cleaner or coffee shop down the street, or that favorite lunch spot. We don’t think of a small business as a manufacturer that distributes products to 14 different countries or the wholesale auto parts company that distributes warehouses of parts to thousands of smaller stores. There’s a marked difference in the definition of a small business to banks and the perception of it to the rest of us. To a bank, a ”small business loan” can be $250,000 to up into the millions. But to many people, a small business loan is more in the neighborhood of $30,000 for inventory or $20,000 for a new piece of equipment. In the banks’ defense, they just can’t make money on a loan that size. In fact, I’d estimate that with the cost of compliance and the manual process a bank goes through to underwrite commercial loans, they can’t charge the truly small client enough to make back their cost.

Compounding this problem are bank acquisitions. Bank consolidations mean the balance sheets and deposit totals have gone up. By extension, this means to be ”meaningful,” loans to small businesses have to be LARGE ones. A bank would much rather make ten $1 million dollar loans than process, underwrite, close, and service 400 $25,000 loans. Wouldn’t you? It’s much more cost-effective. Just to close 400 loans you’d probably have to underwrite and process 2,000 applications or more!

On the flip side of this, think of IOU Financial. We  leverage technology to go through those 2,000 applications. We then automatically filter those 2,000 applications down to a manageable 800, and then close 600 of those requested loans. We’ve reduced the process from 14 touches and 45 days down to four touches and four days. All of this enables efficiency and allows us a scalable way to deploy capital to true small business owners via the internet. This is exactly why we’re continuing our rapid growth. We know that the real small business owners need capital to grow and to thrive, which is why we’re here. We’re successfully fulfilling a need that traditional banks are currently not able to.

Small Business Owners: Know the Repayment Terms of your Loan

For small business owners, understanding repayment terms before applying for a loan is critical. For instance, most lenders offer pre-computed interest rates, which means they calculate the interest payment for the entire length of the loan and add it to the principle when the loan is issued. And yes, this does provide a clear picture of exactly how much interest is charged. But, what happens if the borrower pays off the loan early, expecting to save the interest they would have accrued?

In reality, most lenders will still require borrowers to pay the full amount of interest, even if the loan is paid off early.

At IOU Financial, we offer a different approach that actually rewards our borrowers for early loan payoff. Unlike most other lenders, our simple interest process calculates the interest due by the loan’s principle balance that is outstanding each day. Therefore, as the loan amount decreases, so does the interest payment. It’s that simple!

To help small business owners plan out their loan repayment, and as a result, save money, IOU Financial has created a new loan savings calculator that provides a complete picture of the total cost of a loan, as well as options for paying it back in the most cost-effective time frame possible.

We believe knowledge truly is power, especially when it comes to something as important as a small business loan.

Behind the Scenes: Technology Makes it Possible

Most often, the small business owners that come to IOU Financial for a loan have already been painfully exposed to the fact that banks are much less likely to lend to them. These owners come seeking alternative lending options out of necessity, but also end up finding out that the process of working with IOU Financial is so much easier and faster. What they don’t know is that behind the scenes, it is our technology platform and APIs (application programming interfaces) that make our paperless application and approval process possible.

While traditional banks typically touch an application several times as the loan moves from data entry to processing and eventually to underwriting, we use technology that streamlines the entire process, relying on data we gather automatically through the third-party APIs instead of manual steps. For the borrower, this means less paperwork, fewer pieces of documentation to physically provide, and a quicker, more efficient loan application process. Today, we have developed connections to nearly a dozen APIs including Equifax and the Office of Foreign Assets Control (OFAC), as well as eBay and several social media sites. The latter allows us to also consider non-traditional loan criteria, such as Yelp! ratings, in the decision making process.

IOU Financial is raising the bar for technology in the lending space, which is why we can process and approve loans in a matter of days, compared to the weeks or months that are most often the case for traditional lenders. And, as we continue to add more API connections, we will be able to automatically gather data from even more data sources. Our expectation is that in the future, these and other technology advances will allow us to go from application to funding in just minutes or hours.