Financial Cyber-Attacks – A Growing Management Problem (Part 1)

March 8, 2016 by

donk1-300x266Anyone who has been paying even the slightest bit of attention knows that financial cyber- attacks against all types of companies, organizations and governments have increased dramatically.  The attacks have included stealing data to sell, high jacking the information system and holding it for ransom, or taking money.

Any business can be vulnerable and the attacks have hit companies of all sizes.  However, there’s been a significant increase in the attacks on small businesses (SMB).  The Internet now makes it possible for an Eastern European crime syndicate to hit an Akron contractor.

Cyber thieves have become more sophisticated and organized.  They’ve realized that SMBs are low hanging fruit and are targeting them more often.  Small companies don’t have security or IT departments and they seldom have any policies or procedures in place to deter online, or offline, theft.

SMB owners are notorious for not paying attention to the financial health of their companies.  They often leave “all that stuff” up to an accountant or bookkeeper.  They don’t pay attention to, understand or have any checks and balances in place for financial matters.  This leaves them wide open to external (and internal) larceny. 

Cyber criminals are taking advantage of this lack of management oversight – SMBs are becoming their objective of choice.  They’ve discovered that the way into larger companies is through their SMB partners or vendors, who are much easier to hack.  It’s believed the 2013 Target breach, of 70 million customers, was made possible through accessing a HV/AC contractor’s system.

Therefore, SMBs are high yield for cyber-attacks.  It’s simple to gain access and siphon money, with the added bonus of having easy access to larger companies up the chain.  But, it doesn’t matter if your business is the intended victim or collateral damage, either way you lose. 

It has been estimated that half of the small businesses who are cyber attacked close within six months.[1]  They simply can’t afford the loss.  It’s unfortunate, because a conscientious owner – with a little discipline and some common sense procedures – can prevent or minimize the possibility of a successful attack. 

Next month we’ll go over some steps you can take to protect your company with Part 2 of Financial Cyber-Attacks – A Growing Management Problem.

[1] Testimony of Dr. Jane LeClair, Chief Operating Officer, National Cybersecurity Institute at Excelsior College, before the U.S. House of Representatives Committee on Small Business (Apr. 22, 2015), http://docs.house.gov/meetings/SM/SM00/20150422/103276/HHRG-114-SM00-20150422-SD003-U4.pdf

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Retirement For The Small Business Owner

February 25, 2016 by

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Many small business owners work way past the time they can retire.  The reasons are simple:  They enjoy their business and the challenges they face day in and day out.  Many small business owners take an active role in their business even if the reins have been passed down to their business partners or their children. Financially, many small business owners are prepared.  Others do count on their retirement that they have set aside, but believe social security will provide some of the funds they need to live well during their retirement years.  If you are a small business owner and need help funding your retirement ,or don’t know where to start, follow the links below for more information.

Captain401 Raises $3.5 Million to Help Small-Business Employees Save for Retirement

Captain401 Inc. has raised $3.5 million in seed funding to help small businesses and startups give their employees retirement savings help similar to that of larger and deeper-pocketed employers.

The company’s site and service allows an employer to set up a 401(k) retirement savings plan for employees in minutes, without the paperwork, manual administration, repetitive data entry and high fees affiliated with traditional retirement plan providers like MetLife MET -0.47%, Fidelity, or Charles Schwab SCHW -2.45%.

And once employees enroll, it helps them set goals and automatically invest towards meeting them.

Investors in Captain401 include SoftTech VC, SV Angel, Y Combinator, Crunch Fund,Slow Ventures, Susa Ventures, FundersClub and several individual angel investors including NerdWallet co-founder Jacob Gibson and Stripe Chief Technology Officer Greg Brockman.

Captain401 co-founder and Chief Executive Roger Lee said he was inspired to help small businesses extend a 401(k) plan to their employees while earlier working an advertising tech startup, PaperG, which is still in business.

“I’m an advocate of personal financial health, and it’s the right thing to help employees save for the future and on taxes,” he said. “But without a full-time HR person, accountant and the like, it took us years to offer a 401(k) benefit, even though that would be a basic part of an offer to employees from a larger company.”

Retirement planning steps for small-business owners

According to the Small Business Association web site, there are 28 million small businesses in America — and that number is growing. For many of these entrepreneurs, their business may be their single largest asset.

So what happens when it’s time to retire?

Often, the business owner may look to cash out of the business either by selling it or by passing it on to family members. In both instances, the business owner needs to have a succession plan in place well before he or she plans to retire.

Unfortunately, many business owners don’t have a written succession plan. According to the Financial Planning Association/CNBC Business Owner Succession Planning Surveyreleased in 2015, 78 percent of respondents said they plan to sell their businesses to fund their retirement, and that the proceeds are needed to fund 60 percent to 100 percent of their retirement needs. Yet, less than 30 percent actually have a written succession plan.

The goal of a succession plan is to allow an organization to continue to conduct business even in the event of a key individual’s departure — whether that departure is planned (such as through retirement) or unplanned. While business succession planning is critical to the survival and stability of any organization, it also is crucial to the retirement goals of millions of aging baby boomers.

 Small businesses could pool retirement plans under Obama proposal

President Barack Obama wants small businesses to help more Americans save for retirement.

One-third of American workers don’t have access to a retirement savings plan at work, and many of them work at small businesses. Only half of employees at businesses with fewer than 50 employees have access to a retirement plan through their employer, according to the White House.

As part of his upcoming budget plan, Obama wants to encourage more small businesses to offer retirement plans by making them easier to administer and providing tax credits to offset some of the costs.

His proposal also includes a new mandate for employers to make part-time workers eligible for their retirement plans. Workers who have worked for at least 500 hours per year for a company for three years would be eligible for this benefit.

This mandate is opposed by the National Federation of Independent Business.

“Many small businesses have a handful of full-time employees and larger part-time workforce,” said NFIB Research Director Holly Wade. “If they’re forced by the government to offer retirement benefits to everyone, some may very well discontinue the plan altogether. That would be a classic unintended consequence.”

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Habits of Successful People You Should Emulate

September 24, 2015 by

59948705Emulating successful entrepreneurs’ habits to achieve success  does not necessarily mean we will achieve it, it just means that we may in the process acquire certain habits that will be beneficial for our business. Every entrepreneur is different, and their businesses and processes are widely diverse as well. By acquiring and fostering better habits and applying them in our business will help us achieve the success we are looking for.

12 Habits That Set Ultra Successful People Apart

Ultra successful people delight themselves by blowing their personal goals out of the water. They succeed along many different dimensions of life—their friendships, their physical and mental health, their families, and their jobs (which they are not only good at but also enjoy).

TalentSmart has conducted research with more than a million people, and we’ve found that ultra successful people have a lot in common. In particular, 90% of them are skilled at managing their emotions in order to stay focused, calm, and productive.

These super successful folks have high emotional intelligence (EQ), a quality that’s critical to achieving your dreams.

5 Skills That Are the Foundation of Entrepreneurial Success

Entrepreneurship requires many skills, from financial planning to human resource management, and it’s at times both intimidating and frustrating. Fortunately, if you’ve got a good idea and the commitment to making it work, most of these skills can be picked up along the way. Throughout the course of your business ownership, you’ll make mistakes, learn valuable lessons, and gain experience that teaches you these skills over time.

Unfortunately, this style of learning can sometimes come too late. Some skills need to be learned early on, or else their absence could spell a tragic fate for your business.

If you’re planning on becoming an entrepreneur, or if you’ve just entered the world of business ownership, learn these five skills as early as possible:

7 Successful Entrepreneurs to Follow on Twitter (Plus Their Best Tweets)

Total madness.

Five-hundred million daily jolts of information, reshuffled every second, weighed up for what value they hold. Each with an average lifetime of 18 minutes.

But let me tell you a secret: virtually all of Twitter just equals noise. Smoke. Stuff you don’t want and can’t use. So why bother?

Because every now and then, it works. You discover an invaluable piece of advice, a powerful insight or a link to an incredible resource.

How? Simple: when you select people to follow and pay attention to, do extra diligence. Take discernment to an extreme.

Yes — you can (and should) follow the Richard Bransons and the Bill Gateses. No doubt they have plenty to offer.

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Employee Benefits And The Small Business Owner

August 13, 2015 by

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For a company to acquire top talent and compete with another company for those employees, they have to provide benefits that are more than those required by law.  Social security and workers compensation are required by the federal government to be provided for employees, health insurance and retirement benefits are not required, and therefore only a small percentage of small business or medium size businesses offer those benefits to their employees.  The question becomes then how are businesses acquiring top talent if they cannot compete with other companies that provide those extra benefits?  Follow the links below to read more about this and other topics.

5 ways to start the small business benefits conversation

For business owners, attracting and retaining quality employees is always a challenge — especially as unemployment rates decline across the country. As fewer people look for jobs, employers need to find ways to entice candidates to accept their offers and, perhaps even more crucial, to keep good talent from potentially leaving for better offers.

Providing a competitive benefit package is one proven way for employers to attract and retain the best of the best.

But does this resonate with small-business owners? Not so much. In fact, most aren’t offering benefits at all, according to the 2015 Principal Financial Group® Business Owner Survey, conducted by Harris Interactive. Somewhat shocking details from the survey — which measured the responses of business owners with two to 500 employees — found that only slightly more than one-third, just 37 percent, offer group coverage or employee benefits.

JOSH MABUS — Hand in hand, small business and industry

There seems to be a debate in many cities, in our own state and across the country. Do we invest in small businesses, which employ lots of people as a group but are individually volatile and have lower economic impacts? Or do we invest in attracting corporations, which can be demanding and hard to come by?

We often talk about small business and large-scale employers as if they are mutually exclusive. It’s a debate as old as time. Which came first: the chicken or the egg?

Our nation is home to somewhere around 26 million small businesses, which make up 60 to 80 percent of all U.S. job creation, according to Entrepreneur Magazine.

Small business accounts for the most job creation because of the shear number of small businesses. Their sizes allow them to be more agile and make incremental hires. Those hires, when multiplied 26 million times, have a huge national impact.

Democrats, GOP Reps Demand IRS Return Money to Small Businesses

​A bipartisan group of Congressmen on the House Ways and Means Oversight Subcommittee sent a letter to Treasury Secretary Jack Lew demanding the government return money to small businesses that the IRS had wrongfully seized under federal asset forfeiture laws.

“As the Treasury Secretary, you have the opportunity to right the wrong done to these small business owners,” the Congressional letter writers said, adding, “You have the discretion to return the seized funds to their rightful owners.”

It’s a rare move made by the Congressmen to circumvent the IRS, which they say has been devastating small businesses with its “abusive” seizures of bank accounts the agency thinks are being used for, say, drug transactions or money laundering.

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As a Small Business Owner, Are You Ready to Retire?

August 5, 2015 by

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As the economy was recovering, there was talk about small business owners gaining confidence in the economy and possibly hiring for their business. Nationally the confidence small business owners felt is declining or slipping away completely.  It is not surprising then the hiring has taken a back seat for the moment, and businesses are more concerned with meeting their current payroll instead of adding to it. And what about retirement? According to recent surveys,  more than half of the small business owners in the United States do not have enough to retire comfortably or at all.

To read more about this and other news, follow the links below.

Survey: Small Business Owners Unprepared for Retirement

Almost half of small business owners surveyed are unsure what will happen to their business when they retire.

A survey conducted recently by TD Bank demonstrated 26% of small business owners are not confident they will save enough money to retire comfortably. The survey of more than 660 small business owners nationwide questioned respondents about their management experience, confidence in business tasks and areas in which they need help.

Nearly half of survey respondents (47%) said they do not have plans in place for retirement, whereas about a quarter of respondents (24%) indicated their business would close, and 15% of business owners said they would transfer ownership of their business to a family member or coworker.

External factors affect retirement planning

“Building a small business is hard work, and it can be easy to get caught up in daily tasks such as paying invoices or increasing sales, but smart business operations need to consider the future, including the retirement of the owner,”Jay DesMarteu, head of Small Business Banking for TD Bank, said in a press release. “Just as those in the workforce should invest in themselves through retirement savings, small business owners need to have conversations about retirement and prepare for the future to ease the transition, whether that be closing or selling the business or passing it on to a family member.”

Small business optimism slips two percent in July

THOMASVILLE — Small businesses in Cairo and Thomasville reflect the findings of a recent survey that showssmall businesses in Georgia were increasingly worried about economic conditions in July.

Thumbtack.com’s Small Business Sentiment Survey is a monthly survey of independent local service businesses in the U.S. As part of its survey, the company included 523 responses from Georgia.

The key findings for the state showed that Georgia small business owners’ feelings about their current finances declined by 2 percent while expectations for the economy as a whole dropped by 4 percent.

Concerns over tightening access to credit were particularly pronounced as expectations for the availability of credit declined by 5 percent. Nevertheless, Georgia’s independent local service professionals remain more optimistic about future economic conditions than the rest of the South and the nation as a whole.

Small businesses in Georgia reported that their biggest concern was acquiring new customers. In regards to hiring, Georgia’s small business owners reported a 3 percent decline in plans to add employees to their ranks.

Jay Evans, owner of Babcock & More Home Furniture in Thomasville, Cairo and Camilla, said in an interview with the Times-Enterprise (TTE) that he hasn’t had to cut employees, but he hasn’t hired any, either.

Why Is It So Hard To Serve Small Business? Blame The 90% Challenge

There’s a convenient narrative about small business that we’ve all heard a million times.  Small business represents a huge, underserved, and highly lucrative market for finance-oriented entrepreneurs and large organizations alike. The prevailing wisdom is that these businesses run on Intuit’s QuickBooks, which enables them to have organized, accurate, and timely financial information at their fingertips. By all accounts, the small business market should be an easy one to serve. Unfortunately, this isn’t the case. Organizations big and small have struggled to serve the small business market in an efficient and effective matter, and it’s all due to what we call the 90% challenge.

The 90% challenge

My company BodeTree started out as one of those optimistic startups that thought serving the small business segment would be easy. We quickly realized, however that the commonly held wisdom was wrong. Of the 30 million small businesses in the U.S., the vast majority operate in a state of utter chaos, even if they use an accounting system of some kind.  The reality is that for most small businesses, the traditional process of organizing and managing their finances is too complex, too difficult, and too time consuming.

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Small Business Planning and Finances

July 21, 2015 by

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The cost of hiring a new employee does not stop at the salary a business owner pays them.  The cost of recruiting and training can be expensive costs to the small business owner, and one of the many reasons the can hesitate about hiring if they are short in cash.  Keeping a talented workforce is another matter.  The salary and benefits small business owners provide to their employees can be instrumental in keeping individuals with talent in their businesses. To read more about this and other topics, follow the links below.

How Banks Lost Their Groove In Small Business Finance… And Why They May Never Get It Back

Prior to the Great Recession, easy credit conditions prevailed for small businesses. Cash was free flowing, and relaxed lending practices made it relatively easy to secure financing.

After the Lehman Brothers crash and during the ensuing “credit crunch,” volume fell roughly 19% from 2008 until 2012. This general slowdown in lending coincided with stricter requirements placed on borrowers. Financing simply became less available — even for “creditworthy” companies. For the first time in U.S. business history, small business owners frequently were unable to secure credit even from their own banks.

Many banks suffered losses when the housing bubble burst, and they became risk averse. In order to make loans, they often sought three years worth of financial data. Naturally, revenues declined during the recession, and startups were particularly challenged because they had no financial track record to highlight. Historical data from my company’s Biz2Credit Small Business Lending Index shows that big bank lending hit rock bottom four years ago in June 2011, when only 8.9% of small business loan applications were granted.

IKE TROTTER — Planning is vital for small businesses

Here in Mississippi and, in particular, the Delta, small businesses are the backbone to our economy. And, equally as important, small businesses can be the glue that brings children back home to run and eventually succeed in the ownership of a business. But, as many know, running a small business today involves a great deal of risk.

Needless to say, a small business normally comprises the largest part of one’s estate.  Unfortunately, most business owners fail to address the need for succession planning because it is human nature to put off decisions concerning death, disability or retirement. But here’s a typical scenario: upon the departure of a business owner, there are three choices for remaining family members; sell the business, liquidate the business or try to continue operating. Because of this, succession planning is critical in carrying forth both an orderly transition of power to new owners as well as providing continuity for employees and existing customers.

A properly drafted buy-sell arrangement that is adequately funded can provide financial protection for both family and business. Designed effectively, the plan can allow surviving family members and owners to enjoy ongoing economic support for succeeding generations.

Small business advice: How to attract and retain loyal millennials

It’s no secret that building and maintaining stable employee relationships saves money in the short term and increases company performance in the long term. But what does appear to be a mystery is how to build those relationships.

Many small business owners haven’t found a way to take advantage of this insight because they struggle to build attractive benefits packages and cultures that appeal not only to the best employees, but also to the most dedicated employees.

Fortunately, there’s new information available that points to a surprising solution to this problem: Small businesses need to hire more underrated (and underrepresented) long-haul millennials.

“Dedicated” and “loyal” might not be terms that you usually associate with millennials, but new research indicates that you might want to reconsider your outlook. Although you wouldn’t want to focus your entire hiring strategy on one demographic, there are two facts about millennials that you need to consider before dismissing this approach.

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Learning to “Do the Math” May Save Your Business

July 6, 2015 by

business (5)Remember when you were in high school and complaining about math class?  What was it you said, “I’ll never need this stuff in the real world?”  Well, now that you’re the owner of a small business, depending on your product or service, when it comes to geometry you still might be right.  But, when it comes to other types of math, and the need for them, you were mistaken.

Being able to “do the math” matters.  So much so, that it can be the difference between having a successful or unsuccessful company.  The stories of seemly successful businesses — ones with good products or services, clients and a well known brand — closing because of bad financial management are legion.

One of the biggest mistakes 90% of owners make is not knowing or understanding the importance of their numbers.  They don’t know if or which of their customers generate a profit, nor do they know how much a profit it is.  They don’t understand a fundamental concept — if you don’t have a profit margin, you can’t sustain a business.

The margin is simply how much out of every dollar a business earns it actually gets to keep.  For example: $1.00 (earned) minus $.90 (expenses) equals $.10 (profit).  The profit margin is 10%.  Many owners keep investing money, not understanding this straightforward tenet, hoping to “get the company on its feet”.  However, there’s no reasonable, mathematical way for that to happen if there’s no profit (margins can be either positive or negative). 

Owners should always know their margins, if they’re positive or negative at the very least, because the volume of a business doesn’t give an accurate picture of its financial health.  A company with $5 million in revenue can actually be losing money if it has a negative margin.  Let’s do the math for the fictional ABC Company.

In 2012 ABC had a net income (money they got to keep) of $500,000 from sales of $5 million, which gave it a profit margin of 10% ($500,000 divided by $5 million).  In 2013 they got a new customer, which increased costs.  But, because they ball parked the bid instead of doing the math, they made $500,000 again, only it was on sales of $5.5 million, resulting in a 9% margin. 

In 2014 the client offered ABC more business, which they took once more without running the numbers.  Again, expenses increased resulting in the same net income of $500,000 on $6 million, about an 8% profit.  So while the company increased its volume by a million dollars over 2 years, it actually reduced its returns.  Some businesses become so upside down they can’t get out of the hole they’ve dug, because selling more puts them further in the red.

Unfortunately, thousands of businesses have closed due to this phenomenon — even though they had customers and money coming in their margins weren’t good enough to sustain them.  The math is irrefutable, your product or service can’t cost more to produce than what you’re charging for it, and the only way to know that is to figure it out.

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Small Business Job Creation, Lending, and Taxes

June 18, 2015 by

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The statistics for the small business community  are looking good for 2015. Small business owners believe and are confident that this year will be more profitable than last year, they intent to hire more employees, and feel confident they will invest more in technology.  Taxes, new regulations, and other costs associated with the running of the business are not pleasant nor foreseeable, but those are some of the limitations that they can, and are used to dealing with in a daily basis.

Read more about this by following the links below.

Small Business, Job Creation, And Why We Should Lend To Young Companies

Any honest conversation about creating jobs in the United States must include the role played by small business. Collectively, these businesses create the lion’s share of new jobs. The current SBA Administrator Maria Contreras Sweet regularly argues that two out of every three new jobs are created there. So when Experian approached me with a new study that explored the impact of small businesses (particularly startups), on our economy and what we could do to encourage more job creation, they had my attention.

As one of the three biggest business and personal credit reporting bureaus, I consider Experian’s advice and perspective very relevant to this conversation. I recently spoke with Peter Bolin, Experian Director of Consulting and Analytics, to talk about the research. When they dived into the data they found that small businesses and startups really do have a direct impact on job creation in the United States. They focused on the 2010 class of startups and looked at the resilience of the overall US economic recovery and how these businesses have performed in the four years since they opened their doors.

New chip credit cards putting squeeze on small businesses

NEW YORK — New credit and debit cards with computer chips are putting the squeeze on small businesses.

The cards being rolled out by banks and credit card companies are aimed at reducing fraud from counterfeit cards. As chip cards are phased in, magnetic stripe cards, which are easier for thieves to copy, will be phased out. Businesses of all sizes face an Oct. 1 deadline to get new card readers and software that can handle chips. Most estimates of transition costs for small companies vary from the low hundreds to tens of thousands of dollars due to the wide range of equipment used.

If businesses don’t meet the deadline set by companies including MasterCard, Visa and American Express, they can be held liable for transactions made with phony chip cards.

Small Business Owners Want a Fair Share of Their Taxes Back

New Jersey’s Small Business Development Centers are pushing again for an increase in their state funding — which would in turn make the centers eligible to have federal funding increased to the program in a state with one of the nation’s highest unemployment rates.

The network, formally called America’s SBDC New Jersey, says it had its state support slashed in former Gov. Jon Corzine’s term from $1 million down to $250,000 — and then survived an attempted cut to zero in Gov. Chris Christie’s administration. The state Legislature restored that $250,000, but the funding has been frozen at the same level since Christie’s first year in office, 2010.

Officials with the group argue that’s too little — especially because restoring the $1 million state matching funds would bring back almost that much in federal support for the small-business centers.

By its own figures, SBDCNJ helped 534 clients start new businesses last year, and “helped its clients create and save 15,089 jobs.”

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Small Business Jobs and Updates

June 11, 2015 by

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Analysts and policymakers are confident the state of the economy is getting better.  The reports about job openings are encouraging, and job openings have reached the highest percentage this past April since the year 2000.  One of the concerns now is the ability of these business to fill such mention openings.  The skill necessary businesses are looking for in candidates to fulfill their demands is not there, therefore businesses are still looking.

Follow the links below for more information about this topic.

U.S. job openings hit record high; small businesses upbeat

U.S. job openings surged to a record high in April and small business confidence perked up in May, suggesting the economy was regaining speed after stumbling at the start of the year.

The economy’s stronger tone was reinforced by other data on Tuesday showing a solid rise in wholesale inventories in April, in part as oil prices stabilized.

“This is more confirmation that the economy is indeed emerging from that soft patch in the first quarter and can still pick up even faster in the next few months,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

American small businesses just gave us some more incredibly bullish news about the job market

The labor market is rolling. 

On Tuesday, the National Federation of Independent Business, a conservative lobby group, released its latest small business report, which showed that its small business optimism index rose to 98.3 in May.

But the really positive part of the report isn’t the headline reading — though this did rise to a 5-month high — but the incredibly bullish commentary on the labor market.

The Importance Of Relationships In Scaling A Small Business

​In my Forbes series The Insiders, I share the highs and lows associated with launching and scaling a small business, all through the chronological lens of our own experiences building VerbalizeIt.

In my most recent post, I discussed our fears of not being able to accelerate quickly enough during our time in the Techstars business accelerator program. The focus was on ensuring we had technically-inclined teammates to facilitate our growth.

Another critical component to our earliest successes was the non-teammate relationships we developed, most notably with our mentors, advisors, and advocates. These individuals contributed more to our early growth than we could have ever achieved on our own, resulting from their extensive experiences and network of relationships.

How do entrepreneurs find and convince the right advisors to take part in their journey?


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Expansion Loans – What to do Before Going to the Bank

May 18, 2015 by

59350241Successful small businesses owners occasionally need additional working capital.  The company is stable and profitable, but the cash flow is unable to support a large expenditure for growth (i.e. additional square footage, new employees, needed equipment, adding a product line).  In these situations traditional banks are still the provider of choice for most small companies.

However, due to new regulations resulting from the Great Recession, owners are finding it difficult to get the money they need.  Even if they’re veterans of the old system and were able to secure financing in the past, they’re finding the old rules don’t apply anymore and are having trouble getting financing now.  And rookies are quickly becoming confused and frustrated by the loan process.

So, what do you do?  Planning, patience and follow through are the keys to getting an expansion loan — three things that most small business owners are not very good at.  But, the banks have the money you need and you have to follow their rules to get it. Here are 3 things to do that will help.

Do the planning – Before you fill out the paperwork and submit it to the bank you must to do your homework.  Talk to someone at the bank and get an idea of what’s required for a successful loan application.  Do you have a good credit score and a large enough customer base?  Do you know what your debt-to-income ratio is? 

In the loan process your good intentions don’t count — banks aren’t interested in your open-ended visions and imprecise ideas.  This is strictly a tangible numbers game.  They’re interested in how the changes you’re proposing are going to create a profit, which will repay them with interest.

Have patience – Based on the planning you’ve done you now know what’s required to submit a successful loan application.  However, after the planning stage you may be unable to submit it right away.  You might need to pay down some debt, increase your credit score, clean up your existing credit line, or implement a new sales strategy. 

Patience, time and sticking to a comprehensive plan is often the intermediate step for many businesses.  They find that their financial house has to be put in order before they can successfully get a loan.

Follow their procedures – It’s baffling to lawyers, accountants and bankers how often small business owners are their own worst enemies.  They consistently make the loan process much more difficult than it needs to be and sabotage themselves. 

The average owner started their business so they could do things their way and not have someone else tell them what to do.  Unfortunately, this doesn’t work with banks.  It’s simple, but not easy, to learn to speak the bank’s language, find out what they want and give it to them.

Many successful businesses have failed because of poorly conceptualized and implemented expansions; experienced business bankers have seen it too many times.  Although, at times, it may not seem like it, responsible owners and bankers want the same thing.  They both want a successful, profitable business, which will strengthen the community. 

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