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Tag : small business advice

By Bob Callander

Credit Scores are on the Rise

Credit Scores are on the Rise

Summarized from The Wall Street Journal

 

Consumer credit scores continued to climb in the U.S. this past spring due primarily to lower unemployment and steady economic growth.  This trend is further enhanced by the credit agencies and the way they report historical consumer financial problems.  Foreclosures and bankruptcies originating during the “great recession of 2008 – 2010 are just now starting to fall off individual credit reports.  More than six million U.S. adults will soon have their recession-related financial problems completely wiped out.  Higher credit scores will follow.

Average credit scores nationwide surpassed 700 in April 2017, the highest average scores since 2005.  This helps the economy since higher scores enable lenders to not only make more loans but make them at lower / less risky interest rates.  Most affected will be the purchases of “big-ticket” items as consumers buy more cars, boats, appliances, furniture, and homes.

Credit card borrowing, already on the rise, should also continue to trend further up thanks to higher card limits and more competitive / lower interest rates.

Altogether, higher credit scores are good for borrowers, lenders, and the economy in general.  Look for a flood of new loan solicitations and credit card promotions.  The economic cycle leading to easier credit for more credit worthy consumers is well underway.

By Bob Callander

What to Know Before Your Manufacturing Company Applies for Credit

What to Know Before Your Manufacturing Company Applies for Credit

As a manufacturing or processing company, you must constantly stay current with technological improvements in advanced machine tools, computerized conveyors, material handling equipment, storage facilities, etc.  This equipment does not come cheaply.  While lease and loan financing are available, applying for credit can be tedious, time-consuming, and frustrating, even for those companies with extensive and positive credit history. Fortunately, there are ways to make this process less painful, while also enhancing the probability of credit approval.  Wouldn’t it be nice to hear, “Yes, your credit is approved,” more often?

It all starts by understanding credit from a financial institution’s point of view.  Credit professionals typically cope with two opposing forces…wanting to extend credit as often as possible and wanting to keep their institutional money safe. Here are a few ways you can help:

  1. Ask for a reasonable amount of credit in relationship to your company’s capacity to pay it back. Cash flow is the key. You must show how and where your company will get the money to make repayment.  Will the loan be used to lower your costs, produce greater revenue, or both?  Be specific and detailed.  This is exactly what your financial institution is looking for.
  1. Tell your company’s story in a way that makes sense and helps your financial institution understand your complete history. When and how did you start your business?  How much did you personally invest?  Where did other money come from?  What are key elements of your success?  How will adding new equipment now help you expand?  Will the cost of expansion pay for itself?
  1. Prepare and provide historical financial statements that answer the questions your financial institution will ask. The numbers must support your request.  Confusing and inconsistent financial statements always throw up a red flag, thus slowing the process and lowering the probability of credit approval.
  1. Don’t try to hide the bad news. Every business goes through difficulties.  Your financial statements will show this.  Talk about these problems as openly and willingly as you would your successes.  If you make your financial institution dig for the explanations you will slow the process.  They always discover the whole truth eventually, so why not just save everyone a lot of time.  Besides, your honesty will build trust and credibility.

Prepare and provide financial projections to help your creditor see into your future the way you do.  They don’t know your business or share your vision.  If your projections are both realistic and positive, they’ll hop on board and want to help you succeed.  That’s when you will hear them say … “Yes, your request is approved.”

winning at business

By The Leasing Group

Finding Your Competitive Edge

Check the Internet any day of the week and you’ll find no shortage of “experts” promoting easy paths to intelligent investing and wealth accumulation. How many times have you seen a title that begged you to see what the latest advice is for business success:  “Follow These Seven Strategies to Achieve Success.”

We’ve done the research for you and found the best business advice without any push to buy our latest book. Why you may ask? It’s simple to us, we want to help our customers become the most successful they can be. We know at The Leasing Group if we can propel you along on your path to success you’ll make our community a better  place to live,work, and grow.

Find an Edge

No company will get far without a solid value proposition, be it price, location, service, experience, quality or whatever else drives revenue.  Every entrepreneur must discover an edge.  What sets you apart from your competitors?  When you figure it out, go tell the world.

Be so good they can’t ignore you.” Marc Andressen, American Entrepreneur

Manage Risk

We evaluate options and make decisions everyday, and options carry risk.  The trick is to manage the process.  Before going bankrupt, the Penn Central Railroad bet the company on the future of passenger trains.  That was a big risk.  Penn would have been better off hedging their bet with automobiles and airplanes.

Be Disciplined

Someone once told us that a good entrepreneur never does anything between 8:00 and 5:00 that can be done between 5:00 and 8:00.  In other words, working hours are made for selling.  Paperwork comes later. That takes a lot of discipline.

Never stop learning.” – Indra Nooyi, Chief Executive Officer of PepsiCo

Stir Emotions

Make a concerted effort to get your customers, employees, and suppliers emotionally attached to your business. Products and services delivered well are great, but without emotional attachment they become another commodity.

Hire character. Train skill.” – Peter Schutz, former CEO of Porsche

Stay Flexible

Back in 2002, Apple was unprofitable.  Early Internet flops tarnished its appeal, its retail stores were viewed as dumb ideas and music-playing iPods were seen, even by some Apple executives, as relatively insignificant. Worse yet, the Macintosh wasn’t selling. Apple was flexible enough to innovate and create products and revenue streams well beyond their core sources of revenue in the past.  The rest is history as some have touted as Apple possibly being the 1st trillion $ capitalized company ever.

We’ve got to make the small things unforgettable. – Steve Jobs, Visionary

Find a market advantage, manage your risks, be intentional and disciplined, while also flexible to changing your entire focus.  Maybe you’ll be an Apple too.

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By The Leasing Group

The Money Excuses

“I’m offering 20% of my internet company for $50,000.”

“I’m seeking $500,000 in exchange for 35% of my production company.”

 “I’m here to sell you 15% of my distribution company for $250,000.”

 

These are called the “money excuses.”  They give the impression of success, if only enough money is available.  But, they rarely tell the whole story.

 

Have you ever watched the Shark Tank?  Budding entrepreneurs come on the show asking for an investment from the five sharks in exchange for a portion of their companies.  They pitch and plead and beg.  The passionate ones with good sales skills sometimes walk away with a check.  But in the end, after all the wrangling and negotiating, we discover that money wasn’t the only thing they wanted, or the most important.

 

As any good entrepreneur knows, the importance of money is often overstated.  Although these sharks are valuable partners, their value is much greater than any amount of financial support.  A well funded bad idea is still a bad idea.  Likewise, a good idea can succeed without funds from the sharks.

 

So why not be honest and change the pitch?  How about opening the conversation with something like this…

 

Sharks, I’m not here looking for your money.  Any wealthy investor can write me a check.

I’m here because I need your time, expertise and experience. 

Most importantly, I need your connections.  I want you to be my partner. 

What will that cost?”

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small business advice louisville

By The Leasing Group

Kindness is a Choice

The internet is thick with memorable quotes from wise, successful and recognizable business leaders.  They’re easy to find too.  For a quick look, Google search:

 

  • 5 quotes from Mark Cuban to inspire entrepreneurs
  • 25 business lessons from Jack Welch
  • Warren Buffett’s 15 most memorable quotes
  • Jeff Bozos’ 7 secrets of success

 

Much of this wisdom is a bit too obvious and not very original.  But one business quote recently captured my attention…

It’s harder to be kind than clever.  Cleverness is a gift, but kindness is a choice.”

 

As an entrepreneur who never received the gift of cleverness, I was relieved to find out I wasn’t to blame.  Simply put, my gene pool came up short.

 

More importantly, this quote gave me an opportunity to see kindness in a new light, as a choice.  Just imagine all the choices we make every day.

 

Kindness doesn’t require a high IQ, an exceptional work ethic or a quick wit.  Neither does it reside only with the high-achievers and creative thinkers.  It doesn’t care about our race, our residence, who we know, how much we know or what car we drive.  Kindness doesn’t discriminate in any way.

 

No matter our birth, our circumstances, or our fortunes and misfortunes, we can choose to be kind, or not.  It’s up to us.  There are no excuses.

 

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business advice

By The Leasing Group

Do it Anyway

In 1865 Lincoln needed a two thirds majority of Congress to pass the 13th amendment abolishing slavery.  His cabinet said he would never get the votes.  Lincoln did it anyway.

 

In 1933 Franklin Roosevelt proposed radical new government programs to pull the country out of depression.  His legal advisors said these reforms were unconstitutional and would never pass a Supreme Court challenge.  FDR pushed them through Congress anyway.

 

In 1948 Mother Theresa asked the Church for permission to create the Missionaries of Charity, an organization to care for the poorest of the poor.  The Church warned it would be too demanding and unsafe.  Mother Theresa did it anyway.

 

In 1954 Walt Disney needed the Board of Disney to approve construction of Disneyland in AnaheimCalifornia.  The Board said the project was much too ambitious, that it would likely lead to financial ruin.  Disney did it anyway.

 

In 1996 Steve Jobs returned as Apple’s CEO to find his company nearly in bankruptcy.  Friends and associates said he was foolish to go back, that the company could not survive.  Jobs did it anyway.

 

Bold moves are not reserved for the famous.  Thousands of ordinary citizens do extraordinary things everyday in spite of loud opposition from those around them.  Clangs of “it can’t be done” and “it won’t work” and “it’s a waste of time and money,” are common, followed by, “it’s better to play it safe, think smaller, and wait for just the right time.”

Fortunately for us… they do it anyway.

 

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By The Leasing Group

Malcolm’s Greatest Achievement

Malcolm’s life changed the day he strolled into a Barnes & Noble looking for something to read.  On that fateful day, he met Kathy Rackley near the “Best Seller” shelf with an arm-full of books.  Thinking she might be able to help him select something interesting, Malcolm struck up a conversation. Kathy did more than help.  She offered him an invitation.  Two weeks later she introduced Malcolm as the newest member of her book club…a club of all middle-aged women, each one older than Malcolm’s mother.

 

Recently, this African-American University of Georgia football star spoke openly about his new passion for reading with a USA TODAY sports reporter. Specifically, the reporter asked Malcolm to talk about his greatest achievement, the one thing that made him most proud.  Malcolm’s response was characteristically honest.

 

“That’s easy.  I just finished the Hunger Games books in just two days.”

 

“But what about last season’s touchdown catches for the Georgia Bulldogs,” asked the reporter?

 

“I’ve been a very fortunate athlete and I love football.  But football has always come easy for me.  Learning to read was really hard.  I guess as a kid I spent too much time playing outside.”

 

What is your greatest achievement in life?  Is it what you were born to do?  Or, like Malcolm Mitchell, did it require more courage, more hard work and more determination than you ever thought possible?

 

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the truth in business

By The Leasing Group

Truth about the Minimum Wage

Ask about anyone to weigh in on an increase in the minimum wage and you’re bound to get an emotional response.  As with abortion, gun control, and taxes, there’s very little middle ground on this issue.  The minimum wage is very polarizing topic.  Forget about changing minds.

 

For dissenters, the logic goes something like this…a free market system allocates resources, including labor, more efficiently than any other system.  Government interference only serves to disrupt this efficiency resulting in slower economic growth, higher labor costs and lower employment, all bad for businesses and for their workers.  Worse yet, the minimum wage is inflationary, and we all know what that means.  End of story.

 

I’m sure the intellectual thinkers of the day came to this conclusion honestly and without prejudice.  However, in its seventy-five year history, the minimum wage has not been the culprit feared by economic experts.

 

First, there is no evidence linking the minimum wage to a softening economy.  Second, with few exceptions, businesses don’t typically lay off workers just because of hourly wage increases.  Even when they do, unemployment does not necessarily rise.  Third, in a labor driven market, workers typically make more than the minimum anyway.  An increase rarely has the predicted impact.

 

For supporters, the arguments are more tangible.  With so many workers teetering at the poverty level, we’re all better off when workers and their families don’t require the public safety net.  And, since the cost of welfare in all its forms far exceeds the inflationary cost of wage increases, doesn’t a rising tide lift all boats?   Additionally, working families contribute to the tax base.

 

On balance, a modest increase in the minimum wage actually does more good than bad.  I think its time for conservatives (me included) to get out of the way.

 

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By The Leasing Group

The Extra Mile – Land of Opportunity

The English Dictionary defines “going the extra mile” as…”doing more than expected or required to achieve something, expecting nothing extra in return.”

 

Who doesn’t love having an “extra mile” person on the team?  We might even think of ourselves as “extra mile” people from time to time.

 

So, why is going the extra mile such a rare occurrence?  Maybe it’s because extra mile effort is simply too demanding.  Maybe it’s because going the extra mile requires extreme thoughtfulness, superior creativity, unrelenting determination, personal sacrifice and self discipline.

 

Extra mile people are those who solve customer problems without waiting to be asked.  They look for ways to serve and then follow through when others have long since left the building.  Their hands shoot up when called to volunteer and they don’t leave until the job is completely done.  They do what’s necessary, not just what’s required, even on their own time.

 

Going beyond the expected can be a very lonely place and few accept the challenge.  But the “extra mile” is a magical place too, a place filled with opportunity for those with the courage and determination to go there.

 

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buisness advice

By The Leasing Group

Popping the Student Loan Bubble

I usually cringe when I read about Elizabeth Warren advising the Secretary of the Treasury, chairing a Presidential oversight committee or crafting legislation in the Senate.  As chief architect of the Consumer Financial Protection Board and its founding leader, she and the CFPB have harmed community banks, created mountains of bureaucratic red tape, hurt borrowers and done virtually nothing to protect consumers.

 

Now Warren is weighing in on the student loan problem.  On the surface, lowering interest rates and capping monthly payments sounds great.  No one, including me, wants graduates to be saddled with so much debt that they can’t start families, buy homes or create businesses.  But Warren’s proposals don’t address the root causes of this $1.2 trillion crisis.

 

The issue is directly linked to two very bad policies:

 

  1. Easy student access to credit without spending controls.  In other words, students are permitted to borrow for purposes beyond tuition, room and board.  Without controls, loans pay for night lives, smart phones, cars, sporting events and all sorts of non-educational endeavors.
  2. Little oversight of or limits to education cost increases.  Generally, public and private institutions alike do a poor job of controlling their costs.  They don’t have to as long as the government loan program will pay.  Additionally, “for-profits” schools routinely enrich themselves at student and tax payer expense receiving a disproportionately high number of loans coupled with high loan defaults.

 

Warren’s proposed solutions create more problems than they solve because they don’t address the real issues.  If we’re going to deal with our student debt problem, we must address the reasons for the problem, not simply lower payments on loans way too high in the first place.

 

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

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Credit Scores are on the Rise
What to Know Before Your Manufacturing Company Applies for Credit
winning at business
Finding Your Competitive Edge
best leasing company louisville
The Money Excuses
small business advice louisville
Kindness is a Choice
business advice
Do it Anyway
buisness advice lexington
Malcolm’s Greatest Achievement
the truth in business
Truth about the Minimum Wage
business leasing company
The Extra Mile – Land of Opportunity
buisness advice
Popping the Student Loan Bubble