SHOULD YOU CONSIDER PAYING UPFRONT BUSINESS FINANCING FEES?

Should You Consider Paying Upfront Business Financing Fees

THE UPFRONT FEE SCAM

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. 

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. 

IN THE IMMORTAL WORDS OF THOMAS EDISON:

THIRTY GREAT BUSINESS QUOTES

Some of these quotes are well known. Most are very good and worth reviewing. 

Whether you’re in the early stages of your start-up or looking for some inspiration to keep going, here is the first of 100 kickass quotes for entrepreneurs. Remember when starting your own company, it’s not a sprint, it’s a marathon.

1. “Your reputation is more important than your paycheck, and your integrity is worth more than your career.” — Ryan Freitas, About.me co-founder Click to Tweet
2. “Every time we launch a feature, people yell at us.” —Angelo Sotira, deviantART co-founder Click to Tweet
3. “Be undeniably good. No marketing effort or social media buzzword can be a substitute for that.” —Anthony Volodkin, Hype Machine founder Click to Tweet
4. “Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.” —Tim O’Reilly, O’Reilly Media founder and CEO Click to Tweet
5. “If you can’t feed a team with two pizzas, it’s too large.” —Jeff Bezos, Amazon founder and CEO Click to Tweet
6. “Don’t worry about people stealing your design work. Worry about the day they stop.” —Jeffrey Zeldman, A List Apart Publisher Click to Tweet
7. “Chase the vision, not the money, the money will end up following you.” —Tony Hsieh, Zappos CEO Click to Tweet
8. “The value of an idea lies in the using of it.” —Thomas Edison, General Electric Co-founder Click to Tweet
9. “Make every detail perfect and limit the number of details to perfect.” —Jack Dorsey, Twitter co-founder Click to Tweet
10. “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” —Steve Jobs, Apple Inc. co-founder, chairman and CEO Click to Tweet
11. “The most dangerous poison is the feeling of achievement. The antidote is to every evening think what can be done better tomorrow.” —Ingvar Kamprad, IKEA founder Click to Tweet
12. “Always look for the fool in the deal. If you don’t find one, it’s you.” —Mark Cuban, AXS TV chairman and entrepreneur Click to Tweet
13. “It’s not about ideas. It’s about making ideas happen.” —Scott Belsky, Behance co-founder Click to Tweet
14. “There’s nothing wrong with staying small. You can do big things with a small team.” —Jason Fried, 37signals founder Click to Tweet
15. “Don’t worry about failure; you only have to be right once.” —Drew Houston, Dropbox founder and CEO Click to Tweet
16. “Get five or six of your smartest friends in a room and ask them to rate your idea.” —Mark Pincus, Zynga CEO Click to Tweet
17. “If there’s something you want to build, but the tech isn’t there yet, just find the closest possible way to make it happen.” —Dennis Crowley, Foursquare co-founder Click to Tweet
18. “Fail often so you can succeed sooner.” —Tom Kelley, Ideo partner Click to Tweet
19. “Nothing works better than just improving your product.” —Joel Spolsky, Stack Overflow co-founder Click to Tweet
20. “It’s not that we need new ideas, but we need to stop having old ideas.” —Edwin Land, Polaroid co-founder Click to Tweet
21. “We are currently not planning on conquering the world.” —Sergey Brin, Google co-founder Click to Tweet
22. “Get big quietly, so you don’t tip off potential competitors.” —Chris Dixon, Andreesen Horowitz investor Click to Tweet
23. “Don’t try to be original, just try to be good.” —Paul Rand, Graphic Designer Click to Tweet
24. “It’s hard to do a really good job on anything you don’t think about in the shower.” —Paul Graham, YCombinator co-founder Click to Tweet
25. “If you’re interested in the living heart of what you do, focus on building things rather than talking about them.” —Ryan Freitas, About.me co-founder Click to Tweet
26. “Entrepreneur is someone who has a vision for something and a want to create.” —David Karp, Tumblr founder and CEO Click to Tweet
27. “Best startups generally come from somebody needing to scratch an itch.” —Michael Arrington, TechCrunch founder and co-editor Click to Tweet
28. “I don’t think an economic slump will hurt good ideas.” —Rob Kalin, Etsy founder Click to Tweet
29. “The last 10% it takes to launch something takes as much energy as the first 90%.” —Rob Kalin, Etsy founder Click to Tweet
30. “Don’t play games that you don’t understand, even if you see lots of other people making money from them.” —Tony Hsieh,  Zappos CEO Click to Tweet

Read more: http://onboardly.com/content-marketing/101-kickass-startup-quotes/#.UitGbrx56yU#ixzz3Lc92FIeL

IMPROVING YOUR COMPANY'S BOTTOM LINE

There are two basic methods for improving the bottom line of any business. 

1. Lowering overheads / costs.
2. Increasing cash flow. 

The former is a great deal easier to accomplish than the latter. Increasing cash flow means developing new business, finding new customers / clients or providing more products or services. The latter is a relatively simple exercise if you do not know how much revenue you have to generate each month to make a profit.

If you plan on reducing costs as a first stage, you need to know what your monthly "nut" is. The monthly nut is the amount of money required to operate the business month to month including every business cost down to the cost of toilet paper and excluding the business owners or partners salary or draw. That can be included in the monthly total if you wish.

In the businesses I have owned, I have always wanted to know what my monthly cost is before my draw. How much money do I need to bring in over the next 30 days to cover my company expenses.

If you don't know what your business overheads are, how will you know if your business is profitable? First step; create an Excel spreadsheet and list all your expense categories. Next step is to ensure you get receipts for every purchase whether it is paid by cash, check or credit card. With items like parking, if you just use coins, keep a small notebook in the car and write down the amount you paid the meter. If you do a lot of driving and a lot of roadside parking, you will be surprised to see how much you spend on meters. Keep in mind, this amount comes off your business taxable income. Same with meetings over a coffee. Or buying a train ticket, as examples.Get a receipt and keep a file folder for the receipts. Total them up at the end of the month. Carry out this exercise every month for the next 3 months and then do an average. 

Costs that have to be paid annually, divide over 12 months in your spread sheet. At the end of 6 months, divide by 6 and at the end of the year, divide by 12. 

Now figure out what you (and your partner or partners) need to draw each month. Add this to your monthly total and now you know exactly how much revenue you need to generate each month. From this, you can deduce if the mark-up on the products you sell  or the hourly rate you charge for your services is is sufficient. 

You do not need an MBA to carry out this business analysis. 

BUSINESS IN THE 21ST CENTURY

Adaptability to the ever-changing marketplace is a characteristic that will help 21st century businesses thrive. The ability to innovate and execute is essential, but without adaptability, your business will fall behind in our rapidly evolving world. Exploring creative solutions to challenges is fundamental in the 21st century business world because businesses constantly face trade-offs. A successful manager will be adaptable by being open-minded and bringing in new perspectives to confront new business challenges.

New forms of marketing including advertising, improving customer satisfaction, competitive product or service pricing, staff training, taking advantage of new technology and trimming overheads are just a few of the many challenges facing today's business owners and managers.

Accurate foresight is another essential trait for 21st century business people. You need to have a clear and forward looking vision of who you are, your business goals, and where you see you and your business develop. Many managers spend their days dreaming about the future without taking initiative. Articulate a compelling future vision, develop an operations strategy, and execute that strategy. As a part of the aforementioned adaptability trait, reevaluate your strategy from time to time so it stays current with the changing times in which we live.

And update your business plan or business model as you proceed. If you don't know where you are going, you won't know when you have arrived. The old adage; "the only place success comes before work is in the dictionary" is so very true. 

And often, it is not a matter of working harder, just a matter of working smarter.