2012 Necessities for Small Businesses

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Regardless of the resolutions that may have been made for 2012, there are several items, often overlooked or ignored, that are necessities for small business and are critical to small business success.

1. Business Plan – too many businesses operate by the seat-of-the-pants with little or no planning. Having a plan helps keep the business focused and the major benefit to you is the value the comes from the thought process one goes through when developing a plan. Establish goals and develop a plan to meet the goals. Update the plan as least quarterly making adjustments where necessary.

2. Accounting and Financial Statements – Accurate accounting is a necessity for every business to help manage the business, for taxes and for banks and other that need to understand the business. It is very important to be able to track revenues and expenses and to know what products or services are generating a profit. Having good accounting and financial statements are of the highest importance for any business.

3. Marketing – incorporated in the business plan should be the Marketing Plan for the business. Are you effectively marketing the business? What metrics are being used and measured? What is not working and what is?

4. Customer Service – do you understand and know who your customers are? Are you focused on providing the highest level of customer service? What is your customer satisfaction level and how is it being measured? Excellent customer service can increase sales but today, news of bad service can reach thousands of individuals in minutes.

5. Cash Flow – positive cash flow is the life blood of a business. When businesses are cash flow constrained it is important to have sources for cash when it is needed. Invoice factoring can provide cash quickly when required without hampering the business and is used by thousands of small businesses to help with cash flow.

Jan J. Cunningham
The Interface Financial Group

Factoring

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The holidays are behind us but for many small businesses, the production demand will not subside alongside the season; instead, with spring will come new construction projects, landscaping endeavors and home renovations. To begin preparing for this surge, businesses can use Factoring to meet their financial needs. Factoring companies such as the Interface Financial Group provide services by advancing working capital based on the value of accounts receivable, or invoices; unlike a bank loan, the focus is not on the credit worthiness of a business but on the financial assets.

How can factoring help your business grow this season? Instead of getting paid on your invoices later on, get paid today by selling your accounts receivable through invoice factoring. If you have a large order of grass seed to send out this spring, why not use factoring to get paid on those invoices now? It increases the capacity for production and presents an opportunity to flourish.

Laura Jojic
The Interface Financial Group

Invoice Factoring for Printing Companies

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The printing industry is changing, and facing unique challenges. For many small to medium-size printers, one of the most important considerations is managing cash flow. There is often a significant delay between the completion of a job and the issue of payment. In order to improve cash flow, printers can use invoice factoring to obtain vital funds while they wait for their customers to pay.

Any business with a long receivables turnover period can benefit from invoice factoring, and the service is particularly attractive for printing companies. By using invoice factoring, printers can create a regular income and help manage one of the greatest pitfalls of the industry – running out of funds during the long turnover periods. Since many small printers are sole proprietorships, the owners need their commission income to pay their daily living expenses. Invoice factoring can provide a great solution and much-needed security.

The Interface Financial Group is especially suited to invoice factoring for printers. As the only spot factoring company in the world, the Interface Financial Group’s form of invoice factoring offers flexibility and control to an industry that is filled with uncertainty. Printers can pick and choose the invoices they wish to sell. With invoice factoring, printers can be sure that they won’t miss opportunities to market and grow their businesses – even when cash is tight.

The printing industry may be tough right now, but there are still plenty of opportunities available. Invoice factoring can let printers take advantages of opportunities and grow their businesses, even under difficult circumstances.

David Munster
The Interface Financial Group

Manufacturing is Growing

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Recently good economic good news has been hard if not impossible to come by. So it’s surprising that according to the ISM index, manufacturing has been growing for 25 consecutive months. Although experts consider manufacturing to still be weak, at least it is in positive territory.

Concurrently we have seen an increase in the number of small manufacturers that are looking for business financing to support growth or even just to operate their businesses. Their challenge is that few if any financial institutions are issuing business loans. In the meantime, they are bridging their financial needs using accounts receivables factoring.

Accounts receivable factoring helps manufacturing companies by providing an upfront payment for their slow paying invoices. Instead of waiting up to 60 days to get paid, they get an advance from the account receivable factoring company and get immediate use of those funds. The transaction is settled once the customer pays in full.

The big advantage of accounts receivable factoring in this case is that it’s easier to obtain than a conventional business loan. This helps the company bridge their cash flow gap and improve their financial stability. Ideally, this will help them qualify for a business loan later on. In this scenario, The Interface Financial Group would be the ideal solution for these manufacturers since there is no contractual commitment of time so the client is welcome to leave as soon as they qualify for a bank loan or LOC.

Sabeen Ahmed
The Interface Financial Group

Wishes for New Year

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TD Bank surveyed their small business customers asking for the top wishes of the small business owners for 2012. The responses are interesting and provide some insight into many of the issues of 2011.

The bank surveyed 300 customers from Main to Florida, the banks primary US market area. The top response (61%), wish for increased sales for 2012. This has been the number one issue for most small businesses since the beginning of the economic downturn. Sales do appear to be increasing based on other small business surveys but there is much room for improvement and without increased sales there is no growth.

Other wishes for 2012 included eliminating debt, raises for employees, new equipment and/or software and a new or larger facility.

No one knows for sure but 2012 may be a year for growth. Companies that start growing will need capital to assist with cash flow. Invoice factoring can provide needed cash when required for growth in the business. It is simple to obtain and it it is fast providing cash when it is needed.

Jan J. Cunningham
The Interface Financial Group

Factoring Transportation Receivables

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Running a transportation company properly and professionally can grow beyond your expectations. At the same time, this type of business also presents a cash flow challenge for the owner. Transportation is a cash intensive business with many expenses that can’t wait. There are drivers, fuel and repairs that must be paid for. However, clients can take a long as 60 days to pay their freight bills.

Waiting up to 60 days to get paid is nearly impossible for most small to mid sized transportation companies, especially when they’re new or rapidly growing. Few have the required cash reserves to cope with the increasing expenses of growing a venture. The ideal form of financing in the above scenario would be factoring receivables.

Factoring receivables such as freight bills provides carriers and logistics companies with immediate liquidity and enables them to meet business expenses on time. It eliminates the juggling act of managing client payments and business expenses, greatly streamlining business operations. Basically, when used properly, factoring receivables provides an effective platform for growth.

Factoring receivables works by providing an advance of up to 90% on your invoices. The advance is provided immediately upon invoicing. You get the balance (the remaining 10%), less the factoring fee, once your client pays for the invoice in full.

The Interface Financial Group provides an easy and efficient way for factoring receivables (invoice factoring), within a much shorter time frame than traditional factoring companies. As the only Spot factor in the world, and operating in 7 countries, Interface financial has the experience and the resources to get your business back on track by factoring your receivables and getting you the cash you need to build your business on your terms.

Sabeen Ahmed
The Interface Financial Group

Good News?

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Though the stock market has been down during October and November there are signs of improvement in small business confidence, consumer confidence, home sales, construction and employment. Is this news to cheer about?

As we have stated in prior posts, the economy will go through fits and starts on its way to recovery. One month there will be good news and everyone will be cheering, the next month will be bad news and confidence indicators will drop. The economy continues in this mode but it does appear without doubt that the trend is upwards.

New businesses are being started, businesses that survived over the past three years and have re-invented themselves are growing, some banks are providing capital to select small businesses and overall the signs are positive. So, what happens now?

As businesses are started or are growing again, there is going to be a need for capital. For most, it will not be coming from there local bank. These businesses can strategically use invoice factoring to provide capital to the business when required. No fees and no contracts, just cash as needed and when needed.

Re-building Construction Companies

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The collapse of the housing market and subsequent downturn in the economy severely affected the construction industry and especially sub-contractors. Although it may be sometime before the housing industry recovers, there are construction projects springing up all over the country.

Many in the construction industry have had to re-invent themselves and are now beginning to re-build their businesses around new opportunities in the marketplace. These companies, as they begin to grow again and take on new work, may need capital to assist in buying materials, hiring additional labor or meeting other expenses.

Invoice factoring can help significantly in getting cash to the business owner when he needs it. The owner can sell quality invoices and obtain cash quickly once an account is established. There are no contracts, no application fees and is a “use it as you need it” service.

Jan J. Cunningham
The Interface Financial Group

Cooperating With Due Diligence

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While securing factoring companies that would process your accounts receivable invoices, just know that it is a relatively simple process. The factoring services company will have a due diligence process that it needs to complete before funds can be transferred to you. They will look at a couple of things: mainly your customers and their credit.

An invoice factoring company will use public databases to research your company looking for priority liens on its assets. If your company has liens from other finance companies or banks, federal and state tax liens or lawsuits and judgments against it, this may affect your ability to factor your invoices as these liens can garnish income your company receives.

The factoring company will then review your customer’s credit using the major credit reporting bureaus just to make sure that they can take a credit risk on them. This is one of the benefits of factoring, as it is the customers whose credit is run, not your credit.

But factoring companies will also focus on you, the owner of the company. Most of this research is to check whether you have any criminal activity in your past and the amount of expertise you have in your respective business or industry.

You should be as cooperative with your factoring company as possible during this process of due diligence and verification. As long as your factoring company receives favorable results from its research, your application will proceed smoothly and quickly. As the client of a factoring company, you should be comfortable with the fact that your factor will have contact with your customers. This is a normal part of the process that provides you access to quick financing.

Kristin Gabriel

2012 Construction Forecast

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“A fifth straight year of decline is how 2011 will go into the record books, with no growth likely next year.” That’s the forecast from McGraw-Hill Construction.

“In light of the sluggish economy, construction spending continues to limp along in a depressed state with few limited signs of hope on the horizon. McGraw-Hill Construction estimates that 2011 will close out with a 4% drop in total construction starts to $410 billion, marking the fifth year in a row of decline. Analysts forecast that 2012 will see essentially flat activity with an estimated $412 billion in starts.”

This is a sobering report. Single family starts were expected to rise this year but did not and it does not appear that it will change in 2012. It is now expected that a housing recovery will not start to take place until 2013/2014. Stimulus money that had bumped up infrastructure and government projects is winding down and there is currently no expectation that more money will become available. The good news in construction has been multi-family projects which have seen an increase and will continue for 2012.

There are many projects in process and others that will come on-line over the next several months. For sub-contractors needing capital for these projects they can turn to invoice factoring to obtain cash quickly and as needed.

Jan J. Cunningham
The Interface Financial Group