The Real Reason Why Small Businesses Can’t Get Approved for a Loan

Oh no, not again. Yes, that’s right, I’m not going to go there… at least not for today. There’s no shortage of excuses and reasons why small businesses can’t get approved for business loans. It never fails to amaze me the coverage this topic gets especially when the national economy goes into recession or when major political races are at stake. Yes, I agree that small business growth and success is the economic back bone of the US and also, that more than 60% of the US workforce are employed by small businesses. But where I get off the group think is when it comes to the lack of financing for a small business with a business loan. In this article, let’s explore the REAL REASON that small business don’t qualify for loans and the truth may even surprise you.It’s Deeper Than Statistics
I love numbers and even better, I love reading financial statements and the notes. The love for numbers did not become a passion for me in the world of small business lending until I came to understand that the financial statements tell the story of a business. Similar to the story behind the financial statements, there’s a story behind the statistics stating that small business owners can’t get approved for loans especially if they’re of a certain ethnic group, gender, and / or industry. I’m not completely washing away the reality that there’s a shred of discrimination in our world… hey, we live in a broken society with broken people. However, a large part of this thinking (small business owners can’t get a loan because of skin color, gender, etc) is just simply untrue. I’ve been on both sides of the fence so to speak in the world of small business lending. I’ve worked for a big bank, and I’ve worked for a not for profit community development financial institution and it’s always the same. The number one reason why small business can’t (and don’t) get approved for loans is due to the considerably large operating risk that exists in these businesses.Operating Risk: It All Starts with You
What does operating risk mean? Well, here’s a question to bring some clarity. What speaks more to sustainability: a business that’s been operating for at least one year or a business that’s still in the owner(s) mind? I’d go with the first option. Operating risk means that you have and continue to execute on your business plan(s) and that the business is cash flow positive (i.e. returning a sustainable profit margin to cover costs and make you money). Here’s the sad truth: not many small businesses get to this point. Most if any, within two years are still trying to figure things out. OK, granted, there are levels to this particularly when you observe the diversity of businesses. However, I’m speaking to the ones that endeavor to obtain a business loan.In closing, I offer a couple of ways to minimize your operating risk and increase your chances of getting approved for a loan. (1) Grow tough skin and learn to survive. The game of business is one of survival. Most days, things will not go your way and you just have to stay the course, be adaptable, and stay true to the business mission. (2) Never forget the 3 P’s – Production, Processes, and Personnel. Become efficient in the production of what you offer for sale, create and put in place processes to enhance production efficiency and ultimately the customer experience, and finally, hire, train, and invest in people who share your vision for the business.

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Branding – What Exactly Makes for a Successful Brand?

So what is it about a some brands that give them the edge. Is it because the product or service they promote is of a superior quality or represent value for money? It could be, but that wouldn’t explain why, for example, car manufacturers such as Skoda, Kia and Proton aren’t outselling, say, Audi, Toyota, BMW.Certainly, in the case of Skoda, the quality is there and who could disagree that the cost of a new Skoda represents value for money.Why is it that Nike can command a much higher price point for its products than others and yet still consistently outsell the competition? Ok, we’d probably all agree that Nike training shoes are quite nicely designed but do they really outperform the competition enough to justify the not inconsiderable premium on the price.The answer to both questions is simple. The success of a brand, it seems, is directly proportionate to its brand perception. Almost regardless of inherent product integrity, it’s the integrity of the brand that’s all important. A positive brand perception accounts for the majority of the decision to purchase so it should come as no surprise that the costs of marketing a particular product, in many cases, far out weigh the costs of manufacturing that product!A brand should fully integrate with all aspects of the marketing plan from print media, display and web through to packaging, advertising and new media applications.A well conceived brand with a dynamic marketing plan will not be held back.Where to beginWhen you spend time and money creating or re-vamping your corporate brand, the aim of the exercise must be for the new brand to be a success (especially if the new brand is being developed to replace what may be a tired but already tried and tested, existing identity).Successful branding inspires confidence in a company, its philosophy and its products or services. The impact a successful brand can have affects a range of interested parties, from employees to industry partners, regulators and even the competition.Of course whilst there is no truly accurate formula or method for predicting just how successful a proposed new brand will actually be, a well conceived, implemented and communicated corporate or product brand can only improve the perception of a company or product which, in return, will (or at least should) result in increased sales and a higher profile.As with most design disciplines, brand design certainly shouldn’t be left to chance.In truth even the naming of a company, or product, without serious consideration and professional consultation could be a step too far in the process if youíre aiming for the best, optimised results.To achieve success the branding exercise needs to follow a development process that allows for……ResearchYou know what it’s like, you’ve had this great idea for your brand and the first thing you want to do is brief it in to your design agency as soon as possible so they can work up some concepts and get the ball rolling.But, now that you’ve started spending the budget, can you be completely sure that your “great idea” really is that great?Although the final decision may still be yours to make, researching your ideas prior to initialising any design input could save you (and the designers) both time and money with badly conceived, knee jerk brand concepts.In conjunction with your staff, partners or fellow directors (even clients or customers) try to perform some level of research into your business and design perceptions, products and services and markets to help define what exactly sets you apart from your competitors.Not only will this help you to decide how and where to position yourself in your market but it will also help you to identify and develop the overall brand perception you wish to project.It’s also worth noting that the influence the internet is likely to have on the sales and promotion of your new brand will be considerable. When developing a name or ID it is important that its ‘online’ application works as well as it does ‘off-line’. Clearly, the level of influence will vary from product to product and by target audience however Search Engine Optimisation and Search Marketing are increasingly becoming the key activities to the successful marketing of any brand and should be treated as a necessary part of the whole marketing concept from day one.Seeing is believingFor a brand to be truly successful it will need the undivided support and commitment of the leaders of the business. If the senior management team is seen to be committed to the brand principles then the workforce, shareholders and customers will also be better prepared to believe in the brand.With the full support of all interested parties it will be much easier to develop a more strategic marketing and communications plan that works for everyone.The planning of how you will promote your new brand, what you want to say and how you’re going to say it, are essential if you are to successfully convey the underlying brand values and how they will be communicated, measured and maintained.Keeping controlA successful branding strategy should ooze consistency from every orifice. Visual and verbal integrity is a must if the corporate message is to be clearly communicated at all times.But be aware, the level of control over your branding may be diminished relative to the increase of personnel and/or by the number of locations in which your business resides.This is why it is essential that some level of “brand management” contingency is put in place. Corporate identity and brand guidelines don’t have to be too extensive and all encompassing to have a beneficial and far reaching effect on the level brand consistency that is maintained. The cost for development of guidelines will, of course, vary with the required depth and complexity but the value of such a document will be self evident through the lack of brand dilution.This can be the simple, single page that outlines the ‘do’s and don’ts’ applicable to the company logo all the way up to the comprehensive Corporate Bible covering everything from the preferred type face to the colour of the carpet tiles in reception!Most importantly brand development, as the title suggests, should be an ongoing process and one which has the support of everyone involved with your business. If you have clearly defined principles, outlined in a simple message that reaches the people you need it to reach, and you can measure and monitor it for continued effectiveness, you will be on the way to corporate brand success.

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Health Care Reform Vs Health Insurance Reform

Health Care reform has been a hot item starting prior to the most recent Presidential Election.  The Obama Administration, has now moved Health Care Reform to the forefront of their agenda.  Regardless of your political affiliation, the obvious facts are that costs have continually increased over the last decade.  How should the problem(s) be resolved?The average person who favors government intervention believes that the reform needed is with Health Insurance.  Be careful not to confuse Health Care Reform with Health Insurance Reform.  The two issues should be completely different, but it seems the Obama Administration has focused their energies in solving the Health Care Issue by focusing on Health Insurance.While there have been few specific plans for the administration’s reform, many experts believe that the reform will involve a major involvement from the government.  While there are factions in this nation that favor a “Nationalized Health-care System”, there is equal opposition.  Unfortunately, the public divide seems to rest within the “class system”.  A majority of those families and businesses in the upper-middle to upper class oppose a nationalized system, while the lower-middle to lower class favor a Nationalized Plan.I say to those that favor a Nationalized Plan, be wary of what you wish for!  The problem with the divide actually resides with education and communication.  Too often, those in the lower portion of the class system have been conditioned to believe the Insurance Companies are the big, bad profit mongers that cause your premiums to increase.  Let’s be frank, insurance companies are in business to make money.  However, if you take a look the profit margins within most Health Insurance Carriers, you will see that most are lucky to achieve a 10% profit.If the problem with our the “System” is not with the Health Insurance Carriers, then where should the blame go?  Unfortunately, there is no one cause for the skyrocketing costs.  Rather, there are multitude of issues that have caused our Health Care System to become the inefficient beast you see today.  There is no one “magic” pill that will fix our system.If you take a step back and analyze our system as whole, you have to concur that we have the BEST Health Care Services in the world.  If this were not the case, then why would the world’s wealthiest people fly around the world just to have their medical needs taken care in the United States?  The fact is, wealthy people who live in countries with Nationalized Health Care Systems do not trust those Health Care Providers with routine procedures, much less the more complex ones.So if we can agree that the Health Care Professionals and Facilities are the best in the world, then you should further assume that those individuals providing that care are deserving of whatever money they make.  For my part, I want the guy who is about to open my chest up to perform heart surgery to be paid like a surgeon, and not a garbage man.  So how do we fix our system?The first thing is to focus on the real problem.  The real problem is with the inefficiencies present in the system, not with the Insurance Industry.  There are cost savings available through the efficiencies that can be made through the use of technology.  By gaining the cost savings within the system itself, Health Care Providers (not the actual Professionals) do not have to charge as much money.  That means the Health Insurance Carriers do not have to pay as much to the Providers.  Guess what!  That means the Health Insurance Carriers do not have to charge as much in premium.  Finally, Joe & Jackie Blow do not have to pay as much for Health Insurance!President Obama, focus on the real problem of fixing our system, and Health Insurance Premiums will become more affordable.

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