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Archive for the ‘Business Finance’ Category
On August 15th, 1971 then President Richard Nixon decided to unplug the dollar from the gold standard supposedly to stop currency speculators from wrecking the currency. This was a temporary measure according to his speech announcing this move.
I don’t know about you, but I don’t remember that “temporary” measure ever being rescinded, and as far as I can tell, Tricky Dick did a better job of wrecking the dollar, and subsequently the economy, than any speculators could have ever done.
What Nixon did was not free us from speculators; he freed the government from any fiscal restraint allowing it to borrow any amount it wanted at will. Now we have trillions of dollars worth of debt sitting in other country’s treasuries waiting to come home to roost – to a destroyed hen house.
The most recent infantile political posturing over the debt ceiling can be traced back to that momentous day in 1971 when the President of the United States, sworn to uphold the Constitution and protect our country from enemies, foreign and domestic, became one of those enemies.
Thanks Dick!
Thanks to Chris Mortenson for blogging about this and bringing it to my attention. Here’s his whole post:
Happy 40th Birthday, Fiat Dollar!
10 Ways to Finance Your Small Business – The Last 5
Yesterday, I started a post about 10 ways to finance a small business, but only covered the first 5. Just to recap, they were:
=> Using credit cards
=> Accounts receivable factoring
=> Getting a bank loan
=> tapping into your 401(k)
=> Crowd funding
Of course, they all have advantages and disadvantages, but other than factoring, I think the first 5 are heavy on the downside.
The Final Five
Once again, I have chosen the 10 from an article on Inc.com, but they are all pretty well known. Even so, as the article says, “But given our current state of affairs, securing funds is as tough as ever.”
With that in mind, here are the remaining 5 with my comments in brackets.
Every Small Business Needs Capital
Every small business needs to finance their businesses, and not just at start-up. There is often a continuing need for liquid capital to run the day-to-day operations of any business, large or small. The trick is finding it, if it’s not coming from cash flow. In this economy, especially, traditional forms of finance are harder and harder to find or to qualify for.
10 Ways to Finance – But Which One to Choose?
In past posts, I’ve written about the growing trend of small businesses to use credit cards to finance everything for equipment to payroll. This, of course, is a very expensive way to raise capital, but often it seems the only way out.
“No Bailout for Small Business” – Senate Republicans
Small Business? You Don’t Deserve a Bailout!
As a small business, you are small enough to fail and too small for a bailout. Although both parties have voted so far for trillions of dollars to save big banks and some big corporations, Senate Republicans are now calling the proposed $30 billion credit and tax break bill for small businesses a bailout, and as such want to block it.
This in spite of the fact that there seems to be universal agreement that it is the small business (under 50 employees) that is responsible for over half the new jobs in any economy, booming or busting. And there seems to be plenty of data suggesting that in previous busts, small employers were the ones who helped pull the economy back out of the bust.
Pro-Business Republicans Against Small Business?
So the question is, “Why are supposedly pro-business Republican Senators trying to stop the passage of this bill?” They say we have to curb spending and that the deficit is too high. The Democrats say that it is to deny the Democrats “success” in job creation leading up to mid-term elections in November.
NY Times Article – Who’s Right?
A recent article in the NY Times summarized the two points of view, and leaves those of us who have small businesses to wonder where the truth really lies.
From the Democrats:
Senator Mary L. Landrien, Democrat of Louisiana and chairwoman of the small-business committee, who is a main author of the legislation, said the Senate Republican leader, Mitch McConnell of Kentucky, seemed intent on denying Mr. Obama and the Democrats a chance to pump up the economy ahead of the midterm elections.
“I think Senator McConnell knows and believes this bill could actually create millions of jobs and doesn’t want to give the president and Democrats credit for doing what we do, which is standing up for the middle class,” Ms. Landrieu said.
From the Republicans:
The most prominent potential Republican supporter of the bill, Senator Olympia J. Snowe of Maine and the senior Republican on the small-business committee, said Wednesday that she firmly opposed the $30 billion program because it echoed the huge bailout of Wall Street, the Troubled Asset Relief Program, which has become a political liability for lawmakers who supported it even though many economists say it was a success.
“It has all the quality and features of the TARP program,” Ms. Snowe said in an interview outside the Senate chamber. “I think we’ve been down that road.”
So, there you have it. The Bush Administration began TARP and the Obama administration continued it. The big banks loved it, but since the American people got wise to who benefited, any similar measure is a political liability, at least to the Republicans. So after the “too big to fail” businesses walked away with trillions of dollars of benefits, you and I are now a political liability.
Small Business Person – You Are On Your Own!
Get found in the huge world wide web
• Brand your business so that it stands out amongst the rest
• Build trust and loyalty with your site visitors
• Keep the visitors once they have found you
• Turn the visitor into a customer
• Keep the customers coming back over and over again.
What Does a Small Business Need to Do?
You need to get people to your website, need to engage them well, get them to stay, and get them to buy. Then, you need to keep in touch with them so that they don’t forget you the next time they want to buy again.
We offer your small business a free website analysis to get you started on the path to your own Bailout!
Small Businesses Earn More By Using Credit Cards?
The following is a headline on Inc.com dated July 16,2010:
Small Business Credit Card Use Creates Jobs
This conclusion comes from a report that they quote at length. This report was conducted for the American Bankers Association by Keybridge Research, an international economics and public policy consulting firm.
The report claims that small business use of credit cards is directly or indirectly responsible for the creation of 1.6 million jobs.
“The increase in small-business credit card use from 2003 to 2008 “contributed directly to the creation of 592,000 small business jobs and an additional one million direct or induced jobs throughout the US economy.”
Now, most anyone whose been around the block a time or two knows that research can prove anything, if:
Small Business Job Engine Still Out of Gas
So 2 years after the widely publicized bailout began, small businesses are still at the bottom of the pile. This, even though lawmakers, bankers and politicians are on record as saying small businesses are the “job engine” of the US economy accounting for nearly 60% of new jobs.
The Chairman of the Federal Reserve bank is being widely reported as being disappointed that the banks are not lending, but claims the Fed has no power to force banks to do so.
Meanwhile Congress, who is operating in some other reality zone, let a provision of the stimulus package expire on June 1st that offered the very beneficial 90% government guarantee behind SBA loans. Even though SBA loans were on the rebound and some small businesses were getting the credit they needed.
Are Bank Regulators to Blame?
In a recent article in the Phoenix Business Journal, they report, “During its listening sessions, the Fed often heard that “bank examiners have prevented banks from making good loans,” Bernanke said. “We take this issue very seriously.”
Apparently many banks are ignoring the strong performance of some of their small business customers, pre-meltdown, and refusing to lend them money even though they have contracts in their hands.
Start Ups Haven’t Got a Chance!
The report goes on to say that startups are even worse off than established businesses. For a long time, startups could count on money from friends or relatives, or many used home equity loans to finance their businesses. That has all changed since someone pulled the plug on the housing market in 2008.
The article ends with a very sobering quote:
“Financing for startups is virtually impossible to obtain,” said Robin Prager, assistant director of the Fed’s division of research and statistics.”
Read more of the whole article here: Bernanke ‘lights a fire’ for small biz loans – Phoenix Business Journal
Our government to the rescue again!
That our government is not on the side of small business is clear in the new IRS rules that will allow you to spend more time than you do now in filling our forms and helping the IRS collect the money it uses to help pay down the un-payable debt the country owes to the Federal Reserve system.
CNN Report on New Tax Burden
Small Businesses have to Fight back!
Your only chance is to fight back. Maybe through your Congressional representatives, but that will be a slow fight because they are a part of the problem. Your fight has to be one in which you build your business as fast as you can, as strongly as you can. You have to take advantage of everything you have at your disposal and use them all.
We have been encouraging our small business readers to look at how they can maximize the use of their company websites to attract the maximum number of visitors, and then to get as many of them as possible into your place of business, online or off.
If you are a SMB (small-to-medium-size business) and don’t have a website, you need to do that as soon as possible.
Free analysis of your Website
We offer a free analysis of your present website to help you get started. And if you don’t have one yet, we can help you there, too. Don’t wait til it’s too late. You owe it to your business, to your employees, your family and to yourself to make your business strong and grow. And you help strengthen America, too!
Small Business Owners Use Retirement Funds to Stay Afloat
Small businesses owners are still hurting.
As if we didn’t know. Many small business owners are having to use personal credit cards or are using their private retirement funds to keep afloat. But maybe something is happening at the lofty levels of finance in the US: the Federal Reserve Bank.
Small businesses owners are still hurting.
As if we didn’t know. Many small business owners are having to use personal credit cards or are using their private retirement funds to keep afloat. But maybe something is happening at the lofty levels of finance in the US: the Federal Reserve Bank.
The Federal Reserve Bank is a bank just like all the banks that make up the Fed (it is not a government agency – it is a private bank owned by private banks). However, they say they are the ultimate protector of our nation’s monetary and fiscal policy, a job that used to belong to the US Congress until they decided to outsource that responsibility to the Fed back in the 30’s.
As the big gorilla in the room when it comes to the nations’ economic health, the Fed has a reputation, albeit a very tarnished one, to uphold.
Fed Chairman Supports Small Business Lending
So it was not surprising to hear the Fed Chairman say (again) that he wants the banks he helped give trillions of dollars to over the last 2 years to start lending some of it to small businesses.
The Sacramento Bee newspaper online reported on July 12th that Bernacke has “stepped up pressure Monday on banks to break the logjam and lend more to smaller firms, which employ at least half of American workers.”
The paper goes on to say that the AP recently reported that, “Big companies are building up cash and are expected to report strong earnings starting this week. Not so for small businesses that can’t get loans – or hire freely until they do.”
Small Business Job engine Running on Empty
The US job engine is still running on empty and you as a small business owner are that engine. We at this blog offer a variety of services to get your engine running again. We provide a free site analysis for small businesses as a starting point
I’ve written before about how economists and bankers and government officials and the media all say that small businesses are the so-called job engine of our economy.
But the people who could do something about helping the engine get started again are concentrating all their time and resources making sure that the part of the economy which is not the job engine gets the most benefits. Small businesses take a distant second place to the financial sector which has been given trillions of dollars to help the economy.
Trickle down economics, made popular by Ronald Reagan, is failing as it will always do. It is like trying to help a farmer downstream by pouring water in at the river’s head, but then letting the first farmer take all the water he wants. It’s like the Rio Grande in El Paso, TX – Dry!
Here is a Los Angeles Times article about how the small business job engine is running out of gas.
What can you do about this? Maximize your use of your company’s website to get more visitors and customers. Then you can hire people out of cash flow and not rely on non-existent government bailout money.
That’s what we do here at Local-Business-Search-Marketing: put you on the road to being found on the internet and to bringing more customers to the cash register.
Take advantage of our free website analysis.
…to come to the aid of their company. (Women, too, obviously. I was just paraphrasing an old quote.)
If you are running a smaller company (under 50 employees) then you are definitely impacted by the economy and by government policies.
Here are two sobering reports for you: