Tag Archive | money

What’s the magic number for cash in a small business? Here are strategies to figure that out.

(This post originally appeared on Philly.com)

Ask any small-business owner and you’ll be told that having plenty of cash in the bank is probably the most important indicator of our financial health. But managing cash flow continues to be one of the biggest issues we face.

Almost two-thirds of small-business owners are “regularly stressed or have anxiety due to cash-flow concerns,” according to a recent survey of more than 500 entrepreneurs from small-business lender Kabbage. More than a quarter of them said that they have gone as long as six months without receiving a paycheck.

Six months without a paycheck seems pretty bad to me. But does it have to be that way? Read More…

How Did Spike Lee Convince Michael Jordan to Help Fund His Malcolm X Film?

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(This post originally appeared on Entrepreneur)

Malcolm X, the masterpiece biographical film about the African-American activist — which in my opinion) should’ve won the Academy Award for Best Picture after it was released in 1992 — was almost never made because its director and co-writer Spike Lee ran out of money months before he could complete production.

“It was a very rough time,” Lee told Bill Simmons in a recent podcast discussion. “I got paid $1 million to make the film and I put that entire salary into the movie. I just didn’t have any more money.”

The studio, Warner Brothers, had cut off funding and Lee was being forced to make cuts to staff, expenditures and the overall running time of the film, all of which was a huge problem for the artist, who had his vision of what the product should be and didn’t want to change what he was doing. Read More…

This CEO Has A 2,000-Year-Old Trick to Improve Your Cash Flow

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(This post originally appeared on Inc.)

Thousands of years ago, when Rome was at the zenith of its power, small businesses had the opportunity to sell their goods — organic beef, craft beer, hand-stitched clothing — to the affluent and growing middle class populations in faraway places.

Today not much has changed. Well, except for the fact that craft beer has definitely got to be much better. But new generations of small business owners still sell their goods — organic beef, craft beer, hand-stitched clothing — to customers far away and they face similar challenges.

Whether you were doing this stuff in Augustan Rome or Trumpian America the business still involves a good deal of capital invested and risk. Today, as then, some entrepreneurs elect to take that risk on themselves. Others choose to hire outside firms to help shoulder that risk.

Enter the middleman. That’s the firm that says “Look, I’ll take the risk. I’ll buy and collect the receivable that’s owed to you. You’ll get your money now and I’ll take a fee for my services.” Some call this factoring. I call it financing. And in many cases it’s just good business. You do what you do best, and you let the financial people do what they do best. Everyone shares and everyone wins.

Eyal Lifshitz agrees. He’s the CEO of BlueVine, a company he started about six years ago after a stint in a venture capital firm in Israel. BlueVine, according to its website, has delivered more than $1 billion in financing to over 10,000 small businesses.

The role of the factoring firm hasn’t changed much over the past few thousand years. But their value has. The reason: changing attitudes and, most importantly, technology. I asked Lifshitz about this — and other things — in the below interview, which has been edited for length.

Q: Factoring is not the world’s oldest profession. But it’s pretty old. Why the interest?

My father and grandfather were both small business owners. I grew up watching my father, who owned a small physical therapy clinic in New York, struggle with cash flow issues due to long payment cycles. In factoring I saw a significant opportunity for disruption through technological innovation such as the availability of online and new machine learning methods. That gave me the idea to launch BlueVine, and to make the switch from being a venture capital investor to entrepreneur.

Q: Can you explain BlueVine’s value prop and what it’s doing differently from all the other factoring firms today?

We actually offer two products (factoring and a credit line). For invoice factoring, which was our first offering, we provide a truly digital experience which historically was offline, paper-based and known to be slow and clunky. With our platform, you don’t need to fax invoices or send any paper documents. All you need to do is take 5 minutes to apply online and upload your invoices or connect your accounting software. You can get funds in as fast as 24 hours. Additionally, a business owner can decide which invoice to submit for funding with a click of a button, unlike with many traditional factoring companies that require you to fund all of your invoices. We also offer invoice factoring credit lines of up to $5 million, which is ideal for businesses that are growing rapidly.

Q: Factoring has literally been around for thousands of years. How has it changed? What role has technology served?

At BlueVine, we use advanced technology to improve the onboarding and funding experience for small business customers. Instead of waiting weeks to get approved for financing like with traditional factoring companies, business owners who use BlueVine can get approved for funds in a matter of days. We’re using technology to process hundreds of data points in a matter of minutes to allow customers to finance invoices in almost real time, and have invested in AI to streamline our back office processes. Additionally, we have built an intuitive online dashboard which makes it easy for small business owners to pick and choose which invoice to submit for funding. 

Q:  What do you think is the biggest misconception people have about your business and how are you addressing it?

More and more small business owners are discovering online business lending. In fact, roughly a third of non-employer firms turned to online lenders for financing, according to a 2018 Federal Reserve report. Most people don’t know online lending has gotten to be so common. Despite this, many small business owners still think that the only option they have for financing is their bank. At BlueVine, we’re on a mission to educate business owners and the market about the benefits of online lending and how this relatively new industry not only addresses important business financing needs that traditional banks have not been able to address but also dramatically improves how customers get financing.

Q: One big issue that I would have using a factoring service like BlueVine is trust. How can I trust you with my customers?

We make sure to treat your customers with the utmost care and respect, and it shows in our numbers. We have also built relationships with the accounts payable departments of hundreds of our clients’ customers including Fortune 1000 companies like Walgreens, Verizon, Best Buy who are now very familiar with BlueVine’s process.

Q: Is it just firms with cash flow challenges that can benefit from BlueVine’s services? My company — a 10 person tech firm — doesn’t have these issues. We have about 50-60 open invoices at a time and collection problems do not happen very often. Is there a role that BlueVine could play?

First off, I need to clarify that factoring is not about collections. It’s about allowing you to access capital through your unpaid invoices. It’s a smart option for businesses that sell products or services to other businesses and that typically wrestle with cash flow gaps due to unpaid invoices and long payment cycles. it can also help businesses get convenient access to funds for short-term or emergency needs, from covering payroll to fixing a broken piece of equipment. Many of our clients use factoring to grow their business. Clients often use BlueVine to fund marketing expenses or hire more staff. 

Will there be a recession? What small business owners can expect in 2019

(This post originally appeared on The Guardian)

If, like me, you’re running a small business, you probably had a decent year. The economy has been strong and demand has been good. Every year, however, presents its challenges and 2019 will be no different. As we head into the new year, these are the three biggest challenges that will likely impact both my business and many of the business owners I know.

An economic slowdown

Will there be a recession in 2019? Regardless of all the predictions, no one really knows for sure. But anyone (like me) who’s been running a business for more than 10 or 20 years will agree on this: a recession will come, eventually. It always does and – big picture – we’re kind of due for one. The good news is that the fundamentals – production, output, confidence – remain strong. But there are some signs that a downturn is imminent. Read More…

Businesses can’t afford to be stingy – or they risk losing good employees

(This post originally appeared on The Guardian)

The biggest challenge I hear from my clients of all sizes in this year of economic growth and low unemployment is finding (and keeping) good workers. Unfortunately, that challenge looks to be more pressing for the foreseeable future.

That’s the takeaway from a new study of more than 22,000 employees in 40 countries from research firm Gartner. The study revealed that nearly half (47%) of employees do not have a “high intent” of staying in their jobs, an increase from 40% in the first quarter of 2018.

“We are continuing to witness a multi-year decline in employee discretionary effort both in the US and globally, as workers are simply not seeing rewards from their employers for going above and beyond,” Brian Kropp, group vice-president of Gartner’s HR practice said. Read More…

This Is The Worst Stock Tip I Ever Received

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(This post originally appeared on Inc.)

“The company’s called Symbol Technologies and they make bar code scanners. You definitely need to buy their stock!”

That was the advice given to me from my friend Mike. And I took it. I bought $5,000 shares of Symbol Technologies. And you know what? He was right. Symbol’s a great company and at the time – this was the late 1990’s – they were an up-and-comer in the nascent world of bar code scanners.  Since that time the stock has gone up by multiples. Unfortunately, I never shared in those gains. I dumped the stock six months after I bought it. For a loss. Why?

The stock pretty much sat there at the same price day in and day out for a few months. Until one day when I noticed it was mentioned in the Wall Street Journal. Interested to see why this small (yet growing), publicly-held company was in the news I flipped to the story and found out that just the day before Symbol announced a disappointing sales forecast and its stock dropped more than 30 percent. Hey, these things happen. But wow, that really spooked me. So instead of holding on to it and weathering the storm I just freaked. And bailed. I took my losses and licked my wounds.

Read More…

Philly employers are leery about asking applicants about their wage history

(This post originally appeared on Philly.com)

If you’re an employer in Philadelphia, then you better be careful when you interview a prospective employee.

That decision is being appealed and now there’s a new twist. Last week the National Federation of Independent Businesses — a national trade group representing more than 12,500 businesses in Pennsylvania, along with both the Pennsylvania Chamber of Business and Industry and the U.S. Chamber of Commerce — joined together to file an “amicus” brief to support the Philadelphia Chamber’s appeal (an amicus brief is a legal document filed by non-litigants with a strong interest in the subject matter). Read More…