BIN Digest

Credit makes the world goes round.  Or is it money?  In either case, with today’s economy many small businesses are faced with numerous challenges, especially due to the lack of available credit. 

Varying Credit Needs

Some businesses need credit lines just to stay afloat (to cover overhead costs, pay their employees, etc.) while others need credit to fulfill numerous orders for products that are selling well. Without availability of credit lines for the latter scenario, these businesses are not able to keep inventories in stock for all the products that are essentially being sold; therefore, they are not able to reach their full potential for income, which further affects the economy.

So, with the varying needs of small businesses in America, how does the outcome of the election affect the already tight credit crunch for small businesses?

With the Election of Barack Obama

What exactly does Obama’s election mean to the small businesses of this country?  Obama has publicly claimed that he plans to offer small businesses a tax credit as long as they provide insurance for their workers.  Although he has yet to specify what this tax credit will entail, it will surely increase the amount of small businesses that choose to provide medical insurance for their employees. 

In an attempt to boost our struggling economy as well as stop the hemorrhaging of U.S. jobs to overseas companies, Obama has promised that businesses will also receive a tax credit for every new hire they make here in the U.S.  This is intended to inspire employers to discontinue shipping jobs overseas and consequently, lower our unemployment rate.  

Lastly, Barack has made it a point to increase the amount of lending available to small businesses by requesting that the Small Business Administration put an indefinite halt on all fees charged to small businesses to obtain an emergency loan.  He is also requesting an expansion of the loan guarantee programs that currently exist in order to provide more financial security for small businesses.

An essential part of starting a new business is preparing a small business plan. This effectively summarizes all of the operations and goals of your new organization in a clear, concise manner. Lenders, potential partners, and even the occasional client will want to see your business plan. It’s important to have a well-written business plan on file.

There are seven main parts to an effective business plan.

1. Executive Summary – a one to two page summary of your business plan. 
   
2. Company Description – this is where you would put your mission statement and a basic description of what your company is and does.
   
3. Product or Service – describe any products and services you will provide and how you intend to do so.
   
4. Market Analysis – show why there is a need for your company in the relevant market.
   
5. Strategy and Implementation – how will you run your business? Explain how you will secure customers, resources and skilled labor. Then explain how you will implement your company’s goals.
   
6. Management Team – who will be in charge? Who will be held responsible? How will accountability and the assignment and completion of duties be managed?
   
7. Financial Plan – show and explain all anticipated income sources. How will you generate income and how will you manage expenses. Your financial plan is the most important part of your business plan. Will you be purchasing small business insurance? If yes, what type of business insurance will you need? What other expenses do you anticipate incurring?

For more information on how to develop an effective business plan, or for help starting your new business, visit the Small Business Association Website.

With all of the problems in the economy right now, major financial institutions are in the news on a daily basis.  Insurance companies are facing difficulties as well, and are being pressured to overextend themselves in an unstable market. In an economy such as this one, you want to be confident that you and your money are safe. It is important to select your banks, lenders and insurers with care so that you don't end up in trouble later.

Safeguard Your Company and Your Employees

This is especially true for independent contractors or small businesses that don't necessarily have the reserves that a large corporation would. You depend on these institutions for your business and livelihood and should look for a bank or insurance company's ratings to guarantee that they are a safe, stable and secure place to take your business. If a time came when you needed your employer's liability insurance or workman's comp insurance to pay for a claim, and your lenders and insurance companies were going out of business, you would be stuck paying out of pocket.

Dont Compromise on Quality

Companies like TechInsurance are great because they do the digging for you, and only do business with A+ rated insurance companies. That way you can rest assured you won't be out of luck should something happen and you need to collect on your policy, such as if you have a small business insurance plan and there’s a problem on a consulting contract.

Everywhere you turn, it seems like the stock market is dropping another 100 points, or another big company is shutting down.  The signs are everywhere and as a business owner, you know one thing for sure…money is tight. When you look at places where you can cut the budget a smidge here, or a tad there, one area that you should NEVER consider cutting back is your small business insurance. 

One of the biggest expenses for businesses, annually, isn’t paying for business insurance, but expenses that come as a result of NOT having business insurance.  Most of the reasons that small businesses fall behind on things like rent payments, or wages to the employees, is because they have outstanding liabilities that they are forced to pay for, all because they did not have their company insured. 

When you or your small business is insured, it is actually easier to budget your finances out for the month and even for the year.  Instead of having to worry about any extra expenses that will arise, how much they will cost, or whether you can afford them or not, having your business insured makes it so that you pay the same amount every month, for the same coverage.  There is no extra planning necessary!

No matter how tight things are with the economy right now, the one thing you cannot afford to start cutting back on is insurance for your small business.  Times are tough for everybody, and now is not the time to let down your guard by letting the insuring of your business slip through the cracks.  Make sure that above all else, that you can budget insurance for your small business into your monthly bills.

The effects of a natural disaster are never predictable, especially when business owners or homeowners are unprepared for the devastation caused by a fire, hurricane, or other natural disaster.  Many efforts can be put in place to either prepare for a natural disaster or ease the recovery process once devastation has occurred.  Many non-profit organizations and associations have gathered to help victims of natural disasters recover from severe losses.  One network in particular, the Insurance Information Network of California (IINC), is taking great measures to aid those deeply affected by or at risk for loss from a natural disaster.

Educating Consumers and Business Owners

Members of the IINC are comprised of both commercial and personal lines insurers who conduct business in California. IINC provides objective information about the insurance industry to consumers in California on a daily basis.  Their goal includes educating consumers on safety and enhancing consumers’ understanding of insurance.

As part of their ongoing efforts to inform consumers of important insurance issues and concerns, the IINC developed a free electronic toolkit to help victims of the Angora wildfire – which burned more than 3000 acres and destroyed or damaged more than 200 structures in June 2007 – better understand insurance, organize a home or business inventory, prepare an evacuation plan and create defensible space around their homes or businesses.

The Business Insurance Toolkit

The toolkit includes a disc titled Prepare, Survive, Recover in which articles, videos and website links are provided for consumers to access important information on preparing for devastating natural disasters as well as advice for recovering from disasters like the Angora wildfire.

Along with the Prepare, Survive, Recover disc, the toolkit also includes free home inventory software.  Homeowners and business owners alike can utilize the software to conduct an inventory analysis of their home or business.  The major benefit that this software provides is the ability for homeowners and businesses to use their inventory to gauge the appropriate amount of insurance needed.  Plus, the inventory will serve as an important recovery tool in the event of a loss.

To obtain a free toolkit or to find more information on this subject or related topics, visit www.iinc.org. Consumer tips and advice are also available on the IINC podcast, “IINC Spots” at www.iincspots.com.

The National Worker’s Compensation Defense Network (NWCDN) is comprised of law firms that have experience handling workman’s compensation insurance cases. The NWCDN was created to handle claims for larger corporations and insurers operating in multiple states. There are currently 40 firms that count themselves as members and each law firm represents a different state.

Recently, the NWCDN held a conference in Connecticut to discuss ground-breaking trends in the industry. A variety of other issues were also discussed, all pertaining to workman’s comp insurance claims and some of the related problems that can occur. The conference was geared towards corporations and insurance companies that deal with compensation issues on a regular basis. There were seminars on everything from how to detect fraudulent claims to what actually constitutes a psychiatric disability.

The NWCDN received rave reviews from the 193 attendees, who said the conference was very informative and educational. The next conference is scheduled to be held in Tampa, FL from October 15-16th. The schedule of seminars can be seen on the NWCDN website at http://www.nwcdn.com/AllMainPages/natSeminars.shtml.

If your firm carries a workman's compensation insurance policy, it is vital that you are savvy about your policies and what they cover. These seminars will ensure that your information is up-to-date and will help you to guard yourself against any of the problems that can occur.

CRM, or Customer Relationship Management, is one of the most important things for successful customer relations for small businesses today.  CRM systems essentially gather significant information about the customer.  Many times this information will include the customer name, email address, demographic information, purchases made, any problems that occurred, and other noteworthy facts.  That information can then be used for a variety of business essentials, such as customer service issues, niche marketing, and other market research.

Using CRM System’s for Market Research 

The CRM system will allow you to know your customer, which will in turn permit you to gain vital information on who is buying your product or service.  That vital information can be used to target certain niche markets.  Once you target those markets you may see your profits rise significantly. 

CRM for Management

CRM is also a vital tool for various management issues.  Data stored in the CRM system will provide the customer satisfaction level of a particular individual, and will also tell you the effectiveness of your employees.  Other management issues it helps with include the success of particular products or services, and may aid in product development as well.

Customer Relationships and CRM

Customer relations are another department which greatly benefits from the CRM system.  Since the CRM system stores specific facts about a particular customer, it becomes infinitely easier to deal with certain aspects of customer dissatisfaction.  The CRM system makes it possible to quickly give the customer the information they need, which avoids any further frustration on their part.  Additionally, the CRM system will list any other grievances that the particular customer might have had in the past.  This saves time if it happens to be the same grievance, and aids in organization as well. 

A plethora of CRM systems are available to choose from.  Find one that best suits all the needs of your business, and implement it right away to start tracking all of your customer relationship management needs.

Choosing a small business consultant to help out your company requires some degree of research to be performed. Since there are a variety of areas small business consultants may specialize in, you need to choose one that fits your current circumstances.

Having a business transaction processing service is important for both online and offline sales. It is important to utilize both in order to be able to fully process any type of payment method. Setting up business transaction processing online is the next step after creating a merchant account for your online store.

A wide range of choice is available when it comes to business merchant account providers across the Internet. Google and Yahoo! are some of the top providers; however, smaller providers are available across the net as well.