Tips to Bootstrap Your Way to Immense Profitability
By · CommentsBootstrap Your Way to Immense Profitability by Proving Your Idea Solves A True Customer Need!
As a lender who works with entrepreneurs and start-up companies, my motto with them is always “show me the money!” When a prospect opens up their wallet and pays money for your product or service, then you can say you have a valid business. Until you have real customers who are credit worthy, most lenders and investors won’t give you funding for your business dream because you haven’t proven it works. I recommend to every business owner I coach to do everything you can to leverage your assets to put your firm in a strong position before you attempt to secure financing from outside sources.
Before you get your first sale, you only have an idea which could work. You don’t have a business. Being turned down for financing can be a good thing for you. This may sound counter intuitive since rejection doesn’t make you feel very good, but it’s truly a great source of valid feedback. It often means you need to do more work to prove your business plan. I get financing clients who procrastinate about writing their business and marketing plan, but they want me to help them get hundreds of thousands of dollars for their dream. Would you invest in an entrepreneur who hasn’t written a comprehensive plan? You should try to see it from your lender’s or investor’s point of view.
Whether you’re looking for financing or to raise money from an investor, your goal should be to make sales as early as possible to generate real revenues for your new venture.
Recent sales are the evidence I want to see at Donald Hunter Financial. Contracts, invoices, purchase orders, all show a market for your products or services. And you want to have well established customers with a great track record for paying their bills
A huge benefit of bootstrapping your way to profitability is the more products or services you sell early on, the less outside money you need to raise to make further investments to position your company for growth while at the same time securing your intellectual property and branding your products and services.
Generating cash flow through an actual sale may be the only option for service companies or businesses with few assets to secure financing. Bootstrapping means you will need to give away much less equity in your company to investors.
A Warning to Bootstrappers
Before I go further, I have one caveat for you. Leveraging your existing assets is a great goal, but you don’t want to run out of money trying to do it all yourself. Once you run out of money, no serious lender or investor will work with you. I say this because most financing sources want you to have current funds available to invest at the time they decide to approve you for funding. The amount you’ve already invested doesn’t matter. So keep a balanced approach when going it all alone!
Benefits of a Bootstrapping Mindset
- It keeps you focused on revenue generation
- You keep control over your idea
- You get to reap more of the financial rewards
- You learn to manage your limited resources efficiently
Types of Businesses Where Bootstrapping Make Sense
- The business relies on your proven personal talents and skills
- The business doesn’t require large sums of capital to get started on a small scale
- You already have good industry contacts
Type of Businesses Where Bootstrapping Doesn’t Make Sense
- Lots of R&D is required
- You need expensive equipment to deliver your product or service
- A prototype costs lots of money to build
- You have no prior experience serving the market
- Your business requires economies of scale and scope
As a business coach, I help business owners and entrepreneurs figure out whether they can start-up without outside capital. I guide them through the process of analyzing their sales model from the perspective of rapid revenue generation. My goal is to help them to construct a business model focused on producing a few quick sales as soon as possible.
Bootstrapping Tips
- Spend your funds only on marketing and sales activities directed at a well defined target market.
- Make sure your target customer is credit worthy.
- Create the lowest cost prototype which is good enough to make a sale (E.G., paper design or video).
- Develop the product only when you get a purchase order in-hand.
- Don’t go out and rent office space and purchase unnecessary equipment
There are lots of alternative ways I can help you to fund your business growth. If you generate invoices or purchase orders, you‘ll have access to fast, flexible financing options through my Money Tree Cash Flow program. And most importantly, your credit isn’t an issue with these funding alternatives. Invoices or purchase orders from a credit worthy customer allow you to get cash to fund daily operations and to manufacture your product. You won’t need a loan or capital from an investor to fund your operating costs in the start-up phase! You can rely on factoring or purchase order finance for immediate cash, which is not a loan. Sign up for a complimentary finance consultation to speak to me about ways in which I can help you fund your business.
Bootstrapping Consulting
Are you a “bootstrapper”? What are your top three goals you need some help with right now to start up your business? I can help you develop ways to target your customers to focus on generating immediate sales to prove your business idea meets a true customer need.
You’ll then be in an excellent position to seek funding to expand your business at a much faster pace. Then, I can help you get quick cash for your invoices and purchase orders through my Money Tree Cash Flow program.
Call me today at (866) 323-9123 or sign-up for a complimentary session in my Bootstrap to Profitability Coaching Tune-Up program. I’ll help you develop your business strategy to take advantage of your bootstrapping opportunities straightaway.
Donald Hunter
Make Your Business More Robust When You Rent A CFO!
By · CommentsFinancial Planning for Start-Up success
Rent your very own CFO for critical business decisions
Would you ever think about building a house without hiring an architect? Then, why would you ever think of starting business without first hiring a business financial planner to help you with the start-up phases of your business? After reading this post, you’ll realize a financial planner is one of the best professionals to guide you through the start-up phase. It’s like renting your own Chief Financial Officer (CFO).
My definition of start-ups below includes ventures led by entrepreneurs or brand new business owners. It also includes ongoing businesses who want to launch a new division. For example, I help out-of-state or international businesses who want to start-up operations in California.
Let’s define the type of financial planner who would be right for this CFO advisory role. Financial gurus who focus on stocks and mutual funds would not be your first choice. A planner who focuses on personal financial issues wouldn’t be your second choice either. An agent who focuses on selling insurance products may only give you a partial solution. You need a financial planner who works exclusively with businesses. Your best choice in this case is a financial planner who thinks like a CFO.
I’m sure you’d agree that starting up a business can be frustrating and confusing to make sure you’ve done everything you need to do to increase your chances for success. The rest of this post shares with you some key business areas in which your CFO planner can help your company.
I’m often asked what types of financial planning services I offer business owners. I typically reply that I help business owners cover their “assets.” Literally, that’s what a financial planner will do for you. In a “nut shell”, I help you:
- Make sure you don’t give away more value in your company than is required!
- Determine if you will make a profit.
- Capitalize your new venture.
- Minimize your personal and business taxes.
- Minimize risks (liability) to your business and to you personally.
- Incentivize your employees and key advisors.
Often, there are other start-up areas where a business owner wants me to help them save time and money. I help clients with setting up all aspects of the new venture. Here are a few bulleted categories to help you get a sense of what you must do to launch a business in the various phases of starting up and then growing your business.
Start-Up Business Services:
- Sign up for your business license
- File for your fictitious business name statement
- Help you develop your logo, letterhead, and business cards
Start-Up Marketing Services
- Define your vision, mission, and purpose
- Determine your target market
- Create your 30 second elevator pitch
- Identify where you need to network for generating leads and referral relationships
- Design your sales model
- Write powerful sales scripts
- Create your marketing plan
Online Marketing Services
- Create your social media plan
- Define your blogging plan
- Design your multimedia plan: podcasting, videos, and presentations
- Develop your lead generation strategy
- Create your sales pages
- Drive traffic to your online properties
Business Planning Services
- Write your comprehensive business plan
- Develop your financial model
- Conduct competitive analysis
- Prepare your financing package
- Construct your investor capital presentation
Financial Planning Services
- Decide how much to pay key advisors, board members, and employees, including incentives
- Understand tax advantages of how you bring capital into your business
- Determine the best organizational structure for your business (S corp., LLC, partnership, LLP, or incorporation)
- Decide on types of liability and business continuance risks and insurance
- How to buyout a partner upon dissolution of the partnership or death
- Depreciation recapture
- Buying and selling business use property (1231)
- Buying and selling depreciable personal property (1245)
- Buying and selling depreciable real property (1250)
- Taking section 179 expense
- Choose appropriate depreciation schedules
- Set up and plan for retirement plans for owners and employees
- Transfer of ownership strategies upon death or at retirement
Organizational Development
- Create your organizational chart
- Role development to make clear what you expect the role to produce
- Recruit key advisors and board members to fill your organizational chart
- Leverage hiring assessments to understand personality types and how interviewees will fit the role and the team
- Prepare interview checklists to discover interviewees’ strengths, weaknesses, goals, and personality fit
- Create recruiting strategies to locate superior talent
- Mentor employees to maximize their performance
Have you considered all of the various financial planning options I’ve laid out for you above? It is critical for you to think through all of these options to ensure you maximize your profits and minimize your costs and risks.
I snuck in some marketing and sales options for you too because without a clear marketing plan, it doesn’t matter how well your financial plan has been designed.
Organizational goals are important to get right the first time, as you grow your company. This is why I included the list of must do’s for hiring and team development.
There are many other steps to consider when defining and launching a new start-up company or division of an existing company. Seek expert advice to help you through this process to maximize your investment dollars and valuable time.
Rent A CFO
Rent me to get help on a business challenge you are currently facing. For more information on what I can do right now to help your business, you can call me at (866) 323-9123 or sign-up for a complimentary CFO Coaching Tune-Up session with me.
I developed a comprehensive financing report for business owners and entrepreneurs who need loans or investor capital. You can download my Business Survival report to get an overview of your financing options.
Donald Hunter Financial
Are You Really Accountable for Your “Word”?
By · CommentsCan you believe the first quarter of the year is almost gone? Time flies when you’re having fun! Are you noticing this year that the same actions you have taken in the past are not producing the results they used to? If you are doing the same things over and over and missing your target – it’s probably a good time to try out something new.
Well, I have a simple message for you. If you want to get more stuff done, you need to be accountable for your “word.” When was the last time you were able to check off all the items on your weekly commitment list? I’m sure you’d agree the truth is that most of us have a wide gap between what we hope to accomplish and what we actually do.
I was talking with a close friend at dinner on Sunday about the roadblocks she keeps running into when it comes to meeting and achieving important goals.
She was talking with a sense of utter desperation, telling me that no matter what steps she takes she just can’t master a meaningful goal she’s ever set for herself.
When my clients use the techniques I’m about to share with you, they get massive results. You need strategies to get control over powerful motivating levers in your life. Accountability techniques make it almost certain you’ll do what you say you’ll do. Accountability coaching is the way many executives and top performing professionals raise to the top of their game because coaches help them become answerable to their own goals and commitments.
Start keeping track of the things you say you will or want to do and see how often they get done. In reality, we are not always our “word.” But, the point I’m making here is the more we are our “word” or the more we answer to our selves, the more you’ll accomplish what you say you want to get done in your personal or professional life.
Leap Ahead Coaching
You may have heard of all or some of these accountability strategies. I didn’t realize the power of these ideas until I fully understood the psychology behind them. I now creatively leverage simple accountability techniques such as the ones below to effortlessly increase how much I get done on a weekly basis. It’s truly cool!
- Time blocking
- Accountability partner
- Peer group
Time Blocking
Just the fact you create space on your calendar for a particular activity increases the probability you’ll get the task done. If you’re true to your “word”, you’ll follow through. Time blocking increases the probability of completing that task, but it isn’t always enough to ensure every item gets done or for every person.
You’ll need to avoid distractions during the blocks of time you’ve allocated for a particular project. If you have complete focus on your activities during the blocked out time, you’ll increase your creativity and productivity with this one idea alone.
Accountability Partner
If you time block and also commit to your accountability partner you’ll be more likely to perform a specific task. For example, if you say you’ll get up at 5:00am to go swimming tomorrow morning, the likelihood you’ll get up at 5:00am and actually go down to the pool in your swim suit and jump into a pool is very slim.
However, if you’ve agreed to meet a friend at the pool at 5:00am, the probability you’ll really show-up is significantly improved because you wouldn’t want to disappoint your friend.
Peer Group
Peer groups are similar to an Accountability Partner except you surround yourself with a group of people who have similar interests. Say for example, you have a goal to become a public speaker. The probability you’ll actually stick with your goal is much higher if you involve yourself in an organization for professional speakers.
I know this might be a little scary for you, but let the community know what you’re up to. When you become a part of the community, declare your goals and intentions to key members of the community so you force yourself to be responsible for your “word.” This will be a powerful motivator for you.
Many people who desire to be public speakers start off in Toast Masters to gain experience presenting in front of audiences. Toast Masters has a formal feedback process which helps you understand your strengths and weaknesses to help you improve your presentation skills over time.
Your next step could be you join the National Speakers Association (NSA) to collaborate with other professional speakers. NSA helps you stay in tune with trends in professional speaking. You also learn successes and challenges of other presenters.
Over time, you’ll naturally begin to pick-up the skills of public speaking through osmosis, learn to market yourself as a speaker, and identify the activities you need to follow through on to make the transition into making your professional speaking dream a reality.
Here you immerse yourself into the peer group hoping the identity, talents, and mindset of the group rubs off on you.
Take note that organizations like Toast Masters and NSA create the structure for you to force you to be accountable. Your coach can help you creatively apply the “peer group” effect when formal communities don’t exist. It’s amazing how a skilled accountability coach can increase a person’s results in one session.
Being Your “Word”
These are a few of my Leap Ahead Accountability Coaching strategies to help you get “leverage” on yourself by realizing what being your “word” does to help you stand out above the crowd. You’re no longer leaving your life up to chance when you are your word. An accountability coach helps you be your “word.”
Coaching Tune-Up
Do you want my help to become the “rock star” of your dreams? I help business owners, entrepreneurs, and corporate employees get “leverage” on their life to help you:
- Double your sales in six months, which will enable you to buy the car or dream home you want.
- Get your projects done, which have up to this point been evading you so you can take them off your list and free yourself for bigger and more rewarding things.
- Get your blogging and social media plan created and implemented.
- Get the chapters in your book written which isn’t going anywhere right now.
- Focus on your marketing to generate more leads in your business and improve your cash flow.
- Raise capital for your new venture by getting your business plan done and your capital presentation completed.
- Get the promotion you know you deserve and make your family and friends proud of you.
- Get financing in place to improve your cash flow or invest in commercial property.
- And much more…
No matter what your goal is right now, I’ll help you to creatively apply powerful accountability tactics in your personal and professional life to help you be your “word.” Don’t leave your success up to chance!
I invite you to call me at (866) 323-9123 to sign-up for my Coaching Tune-Up. I’ll give you a complimentary session where I’ll help you right away to get much more done, which will increase your self-esteem and create more success in your life.
Business Leaders Discover the Value of Being Coachable
By · CommentsBusiness Leaders Discover the Value of Being Coachable!
One thing professional athletes and business leaders have in common is both of you need to find the right strategic coach to maximize your results. A growing number of business leaders such as business owners, entrepreneurs, speakers, coaches, consultants, and corporate executives find coaching to be the best way to breakthrough their invisible barriers.
Are YOU coachable? When you think of all the great athletes in basketball, football, golf, and tennis, how many of them do you think would have been successful without a premier coach?
Tiger Woods is the best golf player in the history of the game. Why does he still work with a coach?
Coaches provide feedback, support, a different perspective and accountability to lift your game to a higher level.
Most people who are truly committed to their objectives, goals, success, and their quality of life work with a coach. Great leaders surround themselves with consultants who provide expert support and who are there as a “sounding board” for them to sharpen their ideas, polish their goals and create balance to enhance their decisions.
So, why don’t we seek expert advice when it comes to living our own personal lives and running our businesses? When it comes to our own lives we struggle because we think we should be able to do it alone based on our willpower. We sometimes end up overburdening our own friends and family because we expect a level of support that they are unable to give us.
Tiger knows the value of expert advice in golf and business, but he lacks maturity in life in terms of spiritual knowledge. This makes him vulnerable to all the temptations in the world which affect all of us, especially when we’ve achieved great financial success. I suspect this will be the next area in Tiger’s life where he’ll seek out balance through an expert who understands issues of life
I mentioned above that coaches have coaches. I am a coach, but I also have different coaches I work with on a regular basis because it’s only human to have invisible barriers. I’ve discovered coaching is the best way for me to overcome my blind spots.
Invisible Barriers
- Your weaknesses
- Your strengths
- Your blind spots
The tricky thing for you to understand is that most people who desire to be business leaders already know what they want and have powerful strategies they need to follow. The challenge is they don’t know how to get it done! It’s not enough for you to know what to do. You need help in breaking through your invisible barriers to execute on what you already know you need to do. You need to be coachable! I give you the “secret sauce” below.
The most successful people in business are those who understand who they are; those who are honest with themselves about their strengths and weaknesses. These successful business people develop strategies to perform at a high level no matter the environment they operate in.
Improving on your behavior patterns is critical to getting what you want in business and life. Much of our behavior is inherent and our upbringing shapes how we respond in various situations.
Do you realize that many people don’t even recognize all of their strengths? Yes that’s right; they don’t use the power they already have at their becking call! Compound this with the fact that people don’t want to admit to their weaknesses even when they’re aware of what they are.
It’s critical for you to know:
- How you react to problems and challenges.
- How you persuade others to your point of view.
- How you act in response to changes in your environment.
- How you react to rules and procedures set by others.
“All people exhibit all four of these behavioral factors in varying degrees of intensity.”
–W.M. Marston
Assessment Tools
I can help you with assessment tools to find out where you stand. My assessments will give you the information you need to clarify your invisible barriers. The point I’m driving home here is that logical intelligence is just one factor that determines your success. Emotional and behavioral intelligence are just as important for you to grapple with to make a measureable difference in your life.
Coaching can help you to:
- Improve relationships with your family, employees, and peers
- Enable you to be a better team player
- Double your sales
- Increase your effectiveness in influencing others
- Focus on what really matters to you in business and life
- Stop doing the things which have nothing to do with your business and life goals
- Leverage your strengths
- Mitigate your weaknesses
What would Michael Jordan have accomplished in his life if he had not been coachable? I would venture to guess much less than the intensity at which he played for years in the NBA. Michael was so bad at basketball in high school, he didn’t even make the team.
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
- Michael Jordan
How do you view failure in your life and business? Because Michael was coachable, he accepted advice from his coaches who knew what it took to be a great basketball player. I train constantly to become a premier coach for my clients. Jordan’s coaches helped him to capitalize on his strengths and mitigate his weaknesses. Michael became a premier basketball player in the NBA and his coaches are revered as among the best coaches who have ever coached the game.
Many business owners I interact with in my business, at networking meetings, and on conference calls, don’t appear to me to be coachable. But, their progress is slow. They’re dissatisfied with their progress and change their focus frequently because they can’t figure out why they’re not breaking through their barriers.
It’s not about your intellect!
It’s not about your will power alone!
It’s not about me dumping a lot of information on you.
I’m sure your already drowning in too much information.
The Secret Sauce
Coaching technologies make the difference by fine tuning your performance.
Coaching technologies can be used to find out where you are currently, your invisible barriers, and clarify your goals.
Coaching technologies can help you create your intellectual, emotional, and behavioral roadmap in your life to powerfully reach your goals.
Do You Need A Coaching Tune-Up?
Test drive my strategic coaching program right now! My Coaching Tune-Up will help you turn-up your performance in the areas which will give you the power to accomplish your specific goals. I only worked with people who really want to make progress in business or in their life.
Call me at (866) 323-9123 or click this link to sign-up today for a complimentary Coaching Tune-Up with me. I will let you test drive my strategic coaching program for free so you can experience the power of my coaching prowess.
Each month, I give away one free assessment. This is an opportunity for you to discover where you’re at right now, which will enable you to breakthrough the invisible barriers which have been in your way for years!
In last Thursday’s Turn Your Purchase Orders Into Real-Time Cash post, I laid out my Purchase Order Finance (POF) process for you. At the end of that real-time cash post, I introduced my MONEY TREE (MT) Program. Today, let’s take a look at how my MT can benefit your business.
Money Tree
Who said money doesn’t grow on trees? Money Tree is an asset-based lending program for factoring and purchase order finance. MT evaluates your business assets, your industry trends and ongoing business feasibility.
Once our financing criteria is met, you have unlimited access to quick cash advances for your invoices or purchase orders. This real-time cash program relies primarily on the credit worthiness of your customer who issues the Purchase Order.
MT enables you to fill orders or fund your payroll without waiting for your customers to pay your invoices or for you to deliver on your purchase orders. Direct payments are made to your suppliers (for raw materials) or Lines of Credit. Your domestic suppliers will receive direct payments or Letters of Credit will be posted straight to your international suppliers on your behalf.
You can use Money Tree to access unlimited cash as long as your customers and suppliers meet the requirements of MT. From this perspective, money truly does grow on trees! You can now take on large orders knowing you have unlimited real-time access to cash to deliver your product or service.
Industries Served BY MONEY TREE
- Manufacturing
- Apparel
- Distribution
- Staffing
- Transportation
- Energy
- Service
- Printing
- Technology and IT Services
- & more…
Money Tree is typically available to all industry segments, except for construction projects.
MONEY TREE transaction Types
- U.S. Supplier to U.S. Customer
- U.S. Supplier to Foreign Customer
- Foreign Supplier to U.S. Customer
- Foreign Supplier to Foreign Customer
Your Suppliers
To qualify for my Money Tree program, your suppliers must know your product and be able to produce it in time and to meet your customer’s stipulations. Your supplier must have a good business history and track record of producing and delivering goods.
Required MONEY TREE Documentation:
- Completed purchase order finance Application Form
- Your invoice to your customer
- Your supplier’s invoice to you
- Your purchase order to your supplier
- Your profit on the transaction – gross margins must be >than 18%
- Your business History
- Your most recent profit and loss (P&L) statement
- Your most up-to-date balance Sheet
- Your time frame to produce the finished goods or to deliver your service
- Credit information on your customer
- Your supplier Information
- Your supplier delivers finished Goods or unfinished Goods
How Money Tree Purchase Order Finance Works
Step1: Your Customer gives you a purchase order for goods.
Step 2: You give your supplier your company’s purchase order to fulfill your Customer’s purchase order. The gross margin between the two purchase orders should be a minimum of 18%.
Step 3: Your supplier ships goods to you (non finished goods) or to your customer (finished goods). Payments to your supplier is made directly by my MONEY TREE program immediately or based on your MT contract.
Step 4: If the goods (unfinished) were sent directly to you from your supplier, then you will finish making the product and you ship the finished goods to your customer.
Step 5: You send your invoice for your customer’s order to my MONEY TREE program for factoring.
Step 6: MT will then factor your invoice to your customer. Your advance will be issued after subtracting supplier payments, factoring and POF fees. When your customer pays your invoice, then MONEY TREE will collect advances paid to you and factoring fees. All remaining funds are forwarded to you.
POF Money Tree Examples
POF Example 1: U.S. Supplier to U.S. Customer
You are a clothing manufacturer. You have been in business for three years and your Profit and Loss Statement and Balance Sheet looks good. You received a large order, but you’re maxed out on credit from your suppliers. Your sales price to your Customer is $100,000 and your total cost to produce your goods is $75,000. Your gross margin is 25%. MONEY TREE will purchase the goods for you from your supplier, give you 45 days to produce the goods, charge you a 5% purchase order fee ($5000, 5% of $100,000) and factor your receivables.
POF Example 2: Foreign Supplier to U.S. Customer
You are importing telescopes from Korea. You do not need to receive the goods, The telescopes will be shipped directly to your Customer, which is a large U.S. retailer. The cost of the goods is $500,000 and you will sell them to your Customer for $700,000. Your gross margins are 20% (after all your import costs). My MONEY TREE program will open a Letter of Credit to your supplier and will factor the receivables. When your Korean supplier ships the telescopes, then your Korean supplier will get paid. When the goods are landed in the U.S. and shipped to your U.S. Customer, MT will factor the receivable from your customer and pay the purchase order to your supplier from the MONEY TREE funds advanced to you.
POF Example 3: Foreign Supplier to Foreign Customer
You are an international seafood broker. You are buying seafood in Jakarta from a trustworthy supplier and selling it to a credit worthy Customer in Columbia. The gross margin on your deal is 18%. My MONEY TREE program will finance the full transaction by wiring funds to your supplier of seafood for $40,000 and collect payment from the Colombian Customer of $55,000, less our MT factoring fees, insurance and inspection fees.
Complimentary Money Tree Advisory Services
- Contact me right now at (866) 323-9123 or click this link to sign-up for a free finance consultation with me to discover how my Money Tree helps you get unlimited cash to improve your cash flow.
- Sign-up for my free financing report to discover more financing options to grow your own “money tree.”
Turn Your Purchase Orders Into Real-Time Cash!
By · CommentsTurn your purchase orders into cash right away.
You have assets in your business such as invoices and purchase orders to help you get control over your worrisome cash shortages, which are keeping you up at night. You don’t need to worry anymore, because I can help you get over your cash flow hurdles!
Have you been turned down for a loan from your bank? Asset based lending such as factoring or purchase order finance (POF) is often misunderstood. You can use POF when traditional banking options turn you down. Banks traditionally focus more on your business past performance. Purchase order finance lenders look at the value of your business assets (E.G., invoices and purchase orders).
POF Defined
Purchase order finance is a financial service that enables a business to purchase raw materials or finished goods for products to be sold in a matter of weeks. It is short term financing and usually paid off within 30 to 60 days.
For example, “The San Jose, California Police Department received an order for one hundred servers, dual processor computers” The police department used a purchase order to buy their servers from Dell Computers. Dell promised to deliver the order in 30 days. Dell used POF once Dell received the PO from the police department so they would have the cash on-hand to pay their suppliers for computer parts and salaries to build the 100 servers which the San Jose Police Department ordered.
I’m making the assumption that Dell needs to use POF because they are cash constrained or they use POF as a financing strategy. This is an over-simplified example, but it gives you the ways how POF could be used to finance your transaction. I have more examples below to help you further understand how POF (or asset-based lending) can work for you.
Benefits of Purchase Order Financing
- Expand your capacity with your key suppliers
- Guarantee timely deliveries to your customers
- Take on larger orders to increase your financial bottom line
- Expand your business without increasing your debt or selling equity
- Leverage cash now to pay your suppliers, for marketing, payroll expenses, and other things you need in the short-term
POF will work for your business if you have orders from creditworthy customers, but don’t have cash right now to pay your suppliers so you can deliver the product or service to your buyer. When you find yourself in the position of not being able to promptly fill your customer’s purchase order, this can be a precarious situation for you. You may be at risk of losing the order and the profit to help you pay for critical operating expenses. Beyond your inability to deliver the product or service on time, you may lose future orders from this buyer. And that ain’t good!
You will need PO financing when:
- You need expertise to handle the financing
- You need additional working capital
- You need a quick response to an immediate sales need
- You don’t want to incur additional credit risk (domestic nor foreign)
- You don’t want your Customers and sellers to know each other
- You want the opportunity to make additional profit
Purchase Order Finance Criteria
- Management expertise and proven products
- Well developed sourcing strategy
- Bona fide and Non-cancelable purchase orders
Candidates for Purchase Order Finance
- Companies in start-up or growth phases can use your purchase order or contract from a credit worthy customer to pay for your raw materials, products, and payroll. POF is a great financing option for companies involved in Intellectual Property, Start-Ups, Services, or Consulting. You probably recognize all of these situations include companies that have no hard assets as collateral.
- Your customer must be reputable with a good credit line. And, your purchase order must be verifiable.
- Usually POF is more expensive than factoring your invoices. It’s another financing alternative for start-ups, companies less than 2 years old, and companies with the opportunity to grow. One good thing about POF for you is your company can avoid debt payments and you don’t have to give up any equity for Venture Capital funding.
The POF Process
I offer factoring and purchase order finance through my Money Tree Program. Money Tree qualifies you and your customers and suppliers, and manages distribution of funds.
The process is straightforward. You provide me with a copy of your customer order and a cost projection of your cash requirements to fill your customer’s order.
I pay your vendors or suppliers directly for goods or services you need to deliver your customer’s order. Once you’ve delivered the goods or services and they’re accepted by your customer, you then have an accounts receivable. At that point your contract with my MONEY TREE program will convert to a Factoring transaction.
International Business
Your suppliers may be located outside the United States. I can help you make payments to your foreign suppliers through Commercial Letters of Credit. Commercial Letters of Credit can shield you from the danger of importing products from foreign suppliers. I’ll give you examples of how this is done in future posts.
Call me right now at (866) 323-9123 with your POF questions and concerns.
In my next post, I will discuss the MONEY TREE program and how it can benefit your business; just one of the many resources at Donald Hunter(TM) Financial. Contact me for your personal complimentary consultation and sign up to receive a free copy of my Business Survival Guide for 2010.
Breakthrough Sales Ideas for Small Businesses In 2010
By · CommentsOn February 2, 2010, I hosted a training conference call with my sales mentor Eric Lofholm. Thank you for sharing great tips with the Donald Hunter Financial community.
Eager entrepreneurs and business owners around the planet dialed in to get some “golden sales nuggets” to help them boost their financial results.
This call was fantastic! And, I’ve made the recording available to you below! Eric touched on powerful ideas to help you breakthrough your fears around selling. I picked up a couple of “golden nuggets” on this call which will boost my sales results!
My breakthrough was in the area of getting connected to the benefits influence skills can produce in my life by linking personal financial outcomes to my persuasion abilities , which is actually a powerful business coaching technique.
What benefits would you enjoy in your life if you were to double your sales results?
As you listen to this valuable call , you will discover :
- Why a top insurance salesperson consistently out performed his peers
- How to embrace persuasion skills by changing your view of selling
- How your fear of selling can stifle your results
- Why Eric’s proprietary “Sales Mountain” process can help you produce predictable, sustainable outcomes for your business
- How focusing on three sales systems will boost your results
You can request the slides for this call by emailing me or following Eric’s instructions at the end of this recording. My contact information is always at the bottom of every post.
Complementary Sales Tune-Up Coaching Program
If you have any fears around selling, you should take advantage of my Complementary Sales Tune-Up sessions today. Increases in your sales means you’ll be stronger financially. My goal is to help you get into a stronger financial position long before you need commercial funding.
I’ve spent the past two years studying persuasion techniques, strategies, and sales processes to enable me to produce better results in my own business ventures. My sales and marketing mentors include heavy weights like:
- Dan Kennedy
- Berry Rhein
- Eric Lofholm
- Genie Laborde
- Stan Billiue
- Tommy Hopkins
- Zig Ziggler
- Etc.
I’d like to be your breakthrough business coach and help you to get incredible sales results in 2010. You can sign-up with me today for your complementary Sales Tune-up Coaching session.
In your complementary session, I will mentor you with my powerful coaching technologies to:
- Assess your personal sales goals
- Identify your limiting fears around selling
- Guide you in developing powerful strategies to enable you to generate leads online and offline on a daily basis
- Help you to breakthrough what to say, how to say it, and when to say it to increase your sales conversions
- Improve your financial bottom-line through helping you create a “burning desire” to produce breakthrough sales results
I’ve discovered through studying coaching technologies, persuasion techniques, and financial planning a powerful link between what you believe about your finances and the impact your beliefs have on your sales results. My business coaching will help you “play at a level 10”!
Are you prepared to receive the sales outcomes you’ve been seeking? Increase your influence skills and you’ll improve your business cash flow too.
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Your comments on Donald Hunter Financial give other business owners and entrepreneurs access to helpful resources you have like your own web site or blog. And your remarks add value to the conversations I initiate here for you every week.
Keeping a firm grip on your cash flow is critical today. One misstep can mean endless troubles for your business. For Donald Hunter Financial, I use a customized financial model I’ve developed to make sure I’m growing the key success numbers I’ve projected for my business.
Examples of key success numbers I project and track in my financial model include:
- Cash on hand (money you have in the bank)
- Accounts receivable aging (number of days my customer takes to pay my invoices)
- Sales (commissions received, advising fees, etc.)
Direct costs to generate a sale (commissions paid, loyalty programs, referral incentives, FEDEX costs, etc.)
- Indirect marketing costs to generate leads (online and offline marketing costs)
- Number of leads generated (to me this is a financial indicator)
What are the key success factors in your business? Are you currently tracking them?
Rapper Snoop Dogg once said, “I’ve got my mind on my money and my money on my mind.” You must have this Snoop Dogg-like tenacity about managing your cash flow, otherwise it’ll slip right through your fingers.
Before we get into my cash flow management systems, I want to make sure you’re not already in a bad cash position. If you’re currently having difficulties with your cash flow, you may need cash flow solutions like factoring or purchase order finance to help mitigate this problem. You can contact me at (866) 323-9123 to get help with factoring or purchase order finance. Once you’re back on track, I can help you put cash flow management systems in place to grow.
My simple tracking system below won’t help you dig your way out of a financial hole. It’s a preventive measure, meant to keep you from getting in trouble in the first place.
My customized financial model helps me compare my actual performance with my projections for the year. Comparing plans against performance on a frequent basis ensures I identify problems and develop solutions before things get out of hand.
Accounting Trends
You need systems in place to easily analyze your business trends. I look at trends for specific numbers over set periods of time and compare them to previous periods. You want to make sure your numbers don’t fluctuate dramatically. If trends are positive, then you can feel good everything is going well. You must look at your negative trends in-depth to make necessary changes and modify your course quickly to stay afloat financially.
If you need some help from a financial expert to set-up your financial tracking systems, I can coach you through setting up a workable process for your business.
Now I’ll share simple valuable tips I use in my business with you, which helps me easily control my business cash flow.
Simple Trend Tracking System
- Cash on hand: your average bank balance
- Accounts Receivables aging : average number of days until your customers pay your invoices
Cash On Hand
You can look at your average bank balance for the past 30 days to keep your eye on how much cash you have on hand. Cash on hand is “king.” With online banking, I look at how much money I have daily. I look at the average of the past thirty days to give me a snap shot of my account balances. I don’t worry about the fluctuations caused by normal bills paid and income received throughout the month.
I compare my average bank balance over the past thirty days to the same time periods in the past – six months and one year ago. If I notice a significant change not explained by fluctuations in my revenues, I know something’s happening with how I’m using cash or managing my cash receipts.
If you have ongoing trouble with cash shortages in your business or personal finances right now, take a look at what’s going on. Your business may be headed towards a financial “iceberg” and that can be quite chilling…
Accounts Receivables Aging
The second number I look at is my average number of days to receive my customer’s payments. This will fluctuate with economic cycles. When the economy is slow, you’ll typically see this number increase.
Do the same thing as I did with my cash on hand example above. Compare the average number of days your customers take to pay your invoices in the last six months to the same number from a year earlier. This number should be consistent. If you’ve improved your billing practices, you should see a decrease in how long your customers take to pay you.
A slight increase in how long your customers take to pay your invoices during slow times may be acceptable to you. A big increase at any time means that you need to take action and take a serious look at your billing practices.
These financial indicators provide invaluable insight into how your business is doing. If your trends are stable or positively increasing, then your business is in a good position to grow.
Your Customized Financial Tracking Model
To effectively manage your business, you’ll have to do more than simply compare “cash on hand” and “receivable aging.” I wanted to give you my simple system to help you keep your eye on your business cash flow, but you need a more sophisticated system in place to position yourself for growth.
You’ll want to get control over your cash flow long before you apply for a commercial loan. For the first five business owners who call me to get help with their cash flow, you’ll receive a free strategy session worth $250. You can sign-up for your complimentary business coaching session today with me to get more valuable tips on truly understanding your business trends.
Call me today at (866) 323-9123 with any questions you may have for me about how you can better manage your business cash flow.
You’ll Be In Position To:
- Identify and lock-in on your key success numbers
- Manage your cash flow with ease
- Set goals and action steps to create positive trends for growing your business
- Identify and mitigate your financial risks
- Implement your valuable trend tracking system
- Create your own sophisticated financial model for projecting and comparing actual results
You can also sign-up for my Business Finance Survival Report to the right of this post. I’m currently not charging for this valuable finance resource while I develop my curriculum for coaching other finance professionals. You’ll learn valuable financial options to help you grow your business right away.
I’m here to help you improve your cash flow. I have financial products for you like factoring and purchase order finance solutions to help you get cash to grow your business today.
Call me at (866) 323-9123 for more information on getting quick cash for your business right now.
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I’d love to get your comments on how you manage your business cash flow. If you’re a professional who helps business owners manage their cash performance, add your comments below to help the Donald Hunter Financial community grow.
Are You Executing On Your Business Vision for 2010?
By · CommentsBefore you can execute successfully on your business vision, you need to clearly define it first in writing. We’ve almost completed one whole month of 2010! Can you believe it? I’ve just had a breakthrough on the importance of business vision.
I wrote out my 2010 company vision at the end of 2009, but I haven’t yet incorporated it into my routine so it’s in front of me on a daily basis. This is a mistake. I know better! I am good at writing down my ideas, but I realize I haven’t been consistent so far this year at keeping them present and out in the open for me and my team to embody…
Are you executing on your company vision right now? It’s easy to get caught up in activities like I have over the past few weeks. The way I stay on track with best business practices is by reading a variety of business books and collaborating with positive business leaders on a consistent basis. You always want to get back to the basics.
For me to know if the actions I’m working on really contribute positively to my business vision, I need to clearly define my ideas so I have a detailed mental picture and make sure I review it frequently. My employees and partners also need to know my company vision. If they don’t, then they won’t know if what they produce gets us closer to my dream.
Misalignment contributes to “role” confusion for my employees and partners. No wonder I don’t always get the full benefit of our efforts… “Role” confusion is when you take actions which don’t produce results that support where you want to go.
Your team can figure out where they fit in better if they have a clearer understanding of what’s expected of them. “Role” confusion will impact financial success of your project.
Why is business vision so important to your financial bottom-line?
- You want to take advantage of the power of your collective subconscious minds to maximize opportunities
- You don’t want to waste time with things like role confusion, which leads to unnecessary conflicts in employee relationships
- Without vision “the people perish”, (Proverbs) and your project would be headed towards guaranteed failure
- Align your actions and activities with your vision and you’re pretty much guaranteed success
When your vision is clear, what shows up is:
- You and your team better recognize opportunities and act on them
- You can measure activities within your firm and determine whether they truly help you get to your vision or not
- You are less likely to quit because you know the real distance you’re from your vision at all times
- You can set milestones along the way to your vision, which are easy to accomplish
- Everyone in your company feels good because they know what you expect of them and they know where your company is going
- Your employees and partners will feel empowered to make valuable suggestions you never thought of to reach your vision more creatively and efficiently
If you haven’t created your 2010 vision yet, I hope this post motivates you to get it done ASAP.
Remember to keep your vision present and out in the open where you and your team can see it. You will notice a remarkable difference in your motivations, creativity, and progress towards achieving your 2010 company vision.
Profit Maximizer Business Coaching
I’m a business coach with an MBA and I can help you get massive results with my Profit Maximizer Business Coaching Program. I currently have five complimentary strategy sessions available to help you experience the benefits you’ll receive from my coaching program. In your complementary session, I help you discover what you want to do and help you put plans into place to get it done.
In your free session with me, you’ll discover:
- How to create your vision so you know where you’re going
- What skills you need to develop to make your vision a reality
- What you need to succeed online and the technology required to automate your business
- How to identify your niche and break your niche into your target market
- How to put all of your research and self analysis into a powerful, execution plan
I coach a variety of business professionals such as small business owners, consultants, mortgage brokers, speakers, start-ups, and real estate investors. My financial planning advice adds another benefit for you in ensuring you take into account all financial aspects of your Profit Maximizer Plan.
I currently have five openings for my 2010 Profit Maximizer Business coaching Program and they’re going fast. Call me today at (866) 323-9123 to schedule your complimentary session with me to see how I can help you create your winning business vision, set your priorities, and help you succeed through taking the right actions at the right time. I’ll help you win financially.
You have an opportunity to join me on February 2, 2010, to learn from a master sales coach. Learning how to sell is going to be the big difference-maker for all businesses as the economy recovers. For me, knowing how to sell the right way is crucial to growing my business consistently and profitably. Selling to me is not forcing or tricking you to buy from me; it is having the skills to identify your needs and sharing how I can solve your needs with my product and services. I’ve learned to sell from a place of compassion, honesty, and integrity.
My Sales Coach
Eric Lofholm has been my sales mentor since September 2008. I’ve learned his advanced sales process to consistently generate leads online and offline. Eric has taught me the three most important sales systems I need in my business:
- Lead generation
- Appointment setting
- Lead conversion
I’ve used these three systems I learned from Eric to grow my business while networking offline and in my online marketing.
One of the things I want to do for you this year is to bring in speakers, coaches, and other real estate and financial professionals who I feel can help you get to the next level.
On February 2, 2010, Eric Lofholm and I will collaborate to bring you a complimentary conference call to share with you powerful ideas for growing your business in 2010.
To take advantage of this valuable opportunity right now, sign-up today to secure your spot in this conference call with me and Eric on February 2, 2010.
I look forward to sharing one of my most valuable and trusted mentors with you. You will find Eric’s bio below.
“Share” or “tweet” this blog post below, so your friends and colleagues have the opportunity to acquire new sales strategies and tactics during such a critical time for their business survival.
Working With the Donald:
- Sign-up for a complimentary strategy session with me to work through any concerns you have with business finance, real estate investing, or business coaching.
- I have a free report in getting your business financed with “Business Survival” tips that you can sign-up for to the right of this post.
- For all of you interested in real estate investing or buying or selling a business, sign-up for my investing webinar which helps you discover if investing is right for you.
Eric’s Bio
Eric Lofholm is a Master Sales Trainer who has trained tens of thousands of sales professionals nationwide. He is President and CEO of Eric Lofholm International, Inc., an organization he founded to serve the needs of sales professionals worldwide.
Eric began his career as a top-producing sales representative for 3 different sales organizations. His consistent track record of regularly outperforming his fellow sales reps earned a reputation of success that follows him to this day.
Eric has been trained by the top coaches of his time including: Anthony Robbins and Dr. Donald Moine Ph. D. as well as countless others. He has an insatiable quest for knowledge that he feeds by reading, listening to audiotapes, and regularly attending seminars.
For more information, visit www.EricLofholm.com.
Many of America’s top companies hire Eric repeatedly to train, motivate, and inspire their sales teams. His clients have added millions of dollars in sales to their records after attending Eric’s energetic and groundbreaking seminars.
You have a once in a lifetime opportunity to hear directly from Eric free of charge through my complimentary conference call. Sign up today!
