In the past, I've mentioned that it's very possible for a company to show profit when it could very well go out of business. Basics of Accounting Are Vital to Survival for Entrepreneurs tells the stories of several businesses in this situation and how they escaped bankruptcy.
What do successful business owners rely on to ensure all parts of the business works together like a well-oiled machine? Of course, they hire the right people, select the best equipment, watch financials, keep customers happy and bring in new business. They're also effective in other areas.
Because the Truth in Lending Act exempts businesses from the protections that consumer credit cards get under Credit Card Accountability Responsibility and Disclosure Act (CARD) of 2009 -- many small businesses may be using a personal credit card for business purchases and working capital. One reason they do this to avoid the pitfalls of a business credit card.
Separating the Personal from the Business
Business Credit Cards Trouble for Small Businesses discusses the Credit Card Accountability Responsibility and Disclosure Act (CARD) of 2009 and how the protections from CARD don't apply to business or commercial credit cards thanks to the Truth in Lending Act.
Small Business Credit Card Use
When was the last time you surveyed your clients to find out how you're doing in serving them? It can mean the difference between "satisfied" and "delighted that they spread the word about you." It can also cement customers' loyalty to you.
Create a Survey
Most customers won't complain when something bothers them. They just wait it out in hopes it gets better or leave you when it doesn't. What can you do? Send a "Stop Start Continue" survey (Stratten, 2010).
In Cash Options for Small Businesses, one of the "five new rules for funding" is to skip the funding. Doing this involves two things to consider.
You may find the cash you need within the business. This solution has an advantage over loans and lines of credit because you won't owe interest or pay fees.
To prevent credit card company from taking advantage of customers, Congress enacted the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This act required credit card companies to let customers close accounts if their annual percentage rates (APR) increase, allow customers to pay off the current credit card balance at the lower interest rate and send statements to customers at least 21 days before the payment is due.
Loans to Smaller Businesses Continue to Drop referred to several reports that show banks are approving fewer loans to small businesses. New Rules of Getting a Small Business Loan cites the Small Business Administration's (SBA) report that the value of small business loans has dropped by a significant $60 billion between 2008 and 2010.
It was enough to make business owners groan with news like the one from The Wall Street Journal reporting that getting loans continues to be a struggle especially for smaller companies. Smaller Businesses Seeking Loans Still Come Up Empty explains that businesses thought loans would more available in 2011 when instead the situation grew worse. Outstanding loans from big banks fell 14 percent from 2010 to 2011.
What Our Clients Are Saying
- George Del Toro,
We were funded [in 10 days] (the approval process was very smooth). The way I spend my time has changed dramatically since then. I can spend as much time as I need visiting with customers and out on the field... In closing I would like to tell you that Capital Solutions has made it possible for GDT Well Service, Inc. to triple (300%) its business in the last year, without any of the "growing pains".
GDT Well Service
- Keri Gray,
The HUGE difference I found since we are working with you... is in the day-to-day life... Since Capital Solutions is funding us there is no "fear"... when I talk to a vendor or need to make payroll. You guys have also bent over backwards... to make it work for us. I really appreciate that.
- Brenda and Mark Neufeld,
In our very first conversation I noticed that you not only understood our situation, but also the Oil & Gas trade. Capital Solutions has been an invaluable help... We have grown our business exponentially thanks to you. I can now probably qualify for a traditional line of credit (...but I'm not sure I want to).
B.N.M. Piloting Services