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Friday, April 10, 2015


There have been many business people, entrepreneurs and dreamers been caught with their wallet open by the UPFRONT FEE SCAM. It is rampant on the internet and propagated to a large degree by business websites such as LinkedIn who do not monitor their service as well as they should. However, that is not the point of this post.

The upfront fee for financing is nothing but a big, fat scam. I have never heard of any upfront business financing deal that has ever been legitimate. I have heard of and heard from a number of people who have been taken in by this fraud.

Many of the financing terrorists (this is what they are far as I am concerned) are very, very professional. Some piggy back on the backs of legitimate companies even using cloned email addresses. Some of them are as dumb as a sack of hammers with terrible spelling, amateurish documents and idiotic presentations. In spite of this, they still manage to reel in a few suckers. The problem lies with people believing what they want to hear. If a business person is desperate for financing and does not have the wherewithal to raise funds from conventional sources, they will grasp at straws. These upfront fee scammers know this and bait their hooks accordingly. 

We live in an electronic age. The internet is a tool, a business tool that has trillions of bytes of information at ones fingertips. Why don't people use it to carry out due diligence? A very easy way to start is to type into a search engine the name of the individual or the company offering the financing followed by the word "scam".  And don't just look at  the first page that comes up. Often a website with some relevant information will show up on the subsequent pages. Also, check out scam websites. There are many out there and often or not, a name will pop up. Of course many of these scammers change identities often. If there are no hits in a search, the next best means of testing the validity of a financing offer with upfront fees required is to advise the lender / investor you will place the required upfront fees in trust with your lawyer. Advise the lender / investor to deposit the investment / loan funds in trust with his lawyer and let the two lawyers handle the transaction. If the investor / lender balks at this and advises that is not the way he does business, ITS A SCAM!! No if's, and's or buts. Run for your life.

If anyone who reads this post can provide 100% concrete evidence that an upfront fee financing has been successfully completed, I would be interested in hearing about it. To date I have never seen one or heard of one that has been nothing but a scam. 

Caveat Emptor. Or as P.T Barnum said; "There's a sucker born every minute" Don't let yourself be one. 

Monday, February 2, 2015

50 Ways NOT to Start and Run a Business

Plan to fail if you;

  1. Don't research the market you wish to enter
  2. Don't develop a business plan
  3. Don't create a business model
  4. Don't adjust your goals and plans as you move forward
  5. Don't create  3 year revenue and expense projections
  6. Don't understand the meaning of Cash Flow
  7. Don't create a budget and stick to it
  8. Don't keep receipts for every purchase no matter how small
  9. Don't keep good records
  10. Don't set money aside for tax payments. GST, PST, Income Tax
  11. Don't learn what is deductible and what is not. Accountants are not babysitters
  12. Don't set up a good bookkeeping system with the help of a good accountant
  13. Don't avail yourself of a good insurance agent
  14. Don't have insurance covering yourself and your key employees.
  15. Don't have business interruption insurance 
  16. Don't treat people as you would like to be treated
  17. Don't listen to good advice from peers
  18. Don't listen to your customers and clients
  19. Aren't prepared to go all out to satisfy an unhappy client or customer
  20. Don't consistently check your revenues against your expenses
  21. Don't pay your suppliers on time
  22. Don't contact your suppliers if your cash flow has slowed down and you need an extension
  23. Don't keep a journal and jot down ideas as they come to you
  24. Provide a product or a service no one wants
  25. Let your ego take over and ignore good advice
  26. Get married to your idea and don't listen to people offering ways to improve upon your idea
  27. Are arrogant and unbending
  28. Stop learning because you know it all
  29. Hire relatives and friends to save money instead of qualified personnel 
  30. Aren't  prepared to work long hours
  31. Aren't prepared to learn how to work smarter
  32. Don't take courses to improve your knowledge
  33. Don't join groups who can provide referrals
  34. Aren't prepared to network
  35. Chose cheaper materials for your products to save money
  36. Cut back on advertising and marketing during busy times. 
  37. Don't take your accountants advice
  38. Don't do your research on what is the best bank for your business. Not all banks are alike
  39. Don't keep money aside for a rainy day.
  40. Are not prepared to negotiate deals. Therefore give up something to get something
  41. Don't learn to bargain
  42. Don't become web savvy. 
  43. Don't take the time to learn more about marketing in the 21st century
  44. Don't use your family in the business to create additional tax benefits.
  45. Don't become tax smarter
  46. Don't read, read and read more about your industry and your clients industries
  47. Don't subscribe to influential trade magazines in your business
  48. Don't manage your time efficiently
  49. Are late for appointments, particularly with clients
  50. Don'r recognize good employees for their handwork and diligence
These are listed in no particular order of importance but do cover many of the reasons businesses fail. The old saying; "if you fail to plan, you are planning to fail" is as true today as when it was first stated by Benjamin Franklin.