I find it interesting……

that Wachovia calls my money market account “Small Business  High Performance Money Market”, yet I earn a staggering .05% yield on my money.  That’s like me calling the Mercury Comet I drove in high school a “High Performance Sports Car”.

“Relationship Banking” – truth or myth?

As a fellow small business owner/entrepreneur, I can personally attest to the anxiety that exists in the banking industry.  I’ve been trying to secure a modest line of credit for my business.  Personally speaking, I feel like I’ve lived a financially conservative and responsible  life to this point.  I’ve always made it a habit and priority to pay all my bills on time; therefore, my credit score is quite a bit above average.  Sure, I’ve got a relatively young business to manage and grow, but I’m very pleased with the results so far, and I’ve managed to put some reserves in the bank.  I’ve proven to be a very good and stable customer to my bank.  Unfortunately, that’s not enough to convince the bank that I’ve trusted with my money, to offer that same trust to me with THEIR money.

Banks are hitting the airwaves and newspapers, assuring people that – YES – they are still lending money.  I’m still waiting to run into that ONE person who got funding.  I believe the real message coming from the banks is, “Please don’t take your money out of your account – we promise we’re not going bankrupt.”

One of the hardest things to do when I decided to venture out on my own and become a business owner was convincing my wife that we could afford to take that risk.  The first couple of times I started “talking crazy” about doing something,  she was very nervous and hesitant.  But over time, she saw the confidence in my voice and step -  knew that I had a good business plan – and was now behind me 100%.  That, to me, is the definition of “relationship banking”.  It seems to me the banking system’s definition of “relationship banking” is – we will support you and do business with you if our underwriter (whom you will never meet) decides that you are a good credit risk.  And may I ask how he/she determines that?  Oh, well they take all your personal and business financial data- run it through a software program with fancy formulas- and come up with a decision.  If you’re lucky, your loan officer will call you with the bad news.  If you’re one of many, you’ll get your pre-printed rejection letter in the mail.

Honestly, I don’t really need the line of credit; but I thought it would be a good idea for my business to establish some credit history.  But more importantly, I wanted to find a bank and build a long term “relationship” (there’s that word again).  A bank that could serve me and my customers for many, many years.  So far – that relationship has yet to happen.  Sure, the economy is awful and I can understand that banks are more cautious than ever.  Small business lending IS very risky; however,  I’m not upset about the money -  I’m more disappointed that my bank, who promises me “relationship banking” does not believe enough in me or my business to begin that “relationship”.

But hey, if the underwriter did ever ask me why I felt I was a good credit risk, I would tell him/her…..”Don’t worry about me repaying my debt to you, because if my business begins to fail, I’ll just ask the government for a bailout!”

Flip That “Bookkeeper”

My Dan’s Take moments come from a variety of triggers.  The latest came as I was watching an episode of the popular TV show “Flip This House”.  The episode featured two guys who were responsible for flipping a house in Atlanta.  They had their own company and had flipped many houses in the past, so they seemed to know what they were doing.  As they should, they started off by setting up a budget.  As with most flips, they started with an unrealistic budget and encountered unexpected costs along the way.  In order to cut costs and get the work done quickly, they went away from one of their normal, reliable  vendors and hired someone else who was willing to do one of the tasks much cheaper.  Not only did the new vendor not show up on time the day he was suppose to – he never showed up at all.   With the flip now behind schedule, the project manager ended up having to call his normal vendor to come in and finish the job (and save his butt).

Since I’m also in the construction industry (different company), I know how the thinking goes – How cheap can we get it done?  But in all industries, you must realize that cheap is not always better.  Wouldn’t you rather pay a little more if you could find someone who is reliable and productive?  Many small business owners don’t work from a budget; but if they did, I would safely guess that bookkeeping would not be one of the bigger numbers on that budget.  Bookkeeping work is tedious and not very much fun for most owners, so therefore they don’t put a high value on it.  But that can be a costly mistake.  How many companies do you know of that go bankrupt because they paid too much money for a bookkeeper?  Now think – How many companies go bankrupt or have serious IRS issues because they didn’t pay enough for a good bookkeeper or accountant?

So my advice to all you small business owners.  Don’t pinch pennies when looking for someone to manage your finances.  Think of this person as someone who is going to handle your personal checkbook.  Would you, or your spouse, hire just anyone to do that?  No!  So add some dollars to your bookkeeping budget this year and find out how valuable an investment this can be for your business.

You have how many friends??

I’d like to talk about something that I find bothers me about social networking.  It’s simply the  unbelievable  number of contacts  seen on LinkedIn profiles or the number of “friends” on Facebook profiles.

Let me just say this – If you have hundreds (some have 500+) of contacts on your LinkedIn profile, something is seriously wrong with your concept or idea of networking.  Are you trying to impress me??  I’m sorry, but I find it more vain than anything.  It’s almost as if you’re displaying that number as a badge of honor.  Do you win a prize from LinkedIn for having the most contacts?  There’s no way you can be effectively networking with all  500+ contacts.  You wouldn’t be able to work because all your time would be spent networking!!

And then you have the people on Facebook with hundreds of friends.  Wow….I can see that if you’re 90 years old or have lived in 10 different states as you were growing up, but really – you have THAT many friends?!  I must have a different definition of a friend than these folks.  I kind of look at it like this – are these  200 people going to show up for your funeral?  Are you receiving 200+ Christmas cards every year?  I’m sorry, but I’m a little more discriminating when it comes to adding you as my friend.  Just because you were in the same graduating class as me, or you met me at a dinner party a couple of weeks ago, does not make you my friend.  An acquaintance yes – a friend – not so much.  My friends are people that I grew up with, played sports with, dated, partied with, etc.  I know the names of their relatives.    I share memories with them.

Everyone is free to do what they please on these sites – that’s what makes it so fun and interesting.  But you’re not impressing me with all these big numbers.  I’ll do just fine with my realistic and manageable group of  true business contacts and friends.  They give me all the fulfillment I need to make it in life.

Is there really “stable employment” anymore?

In the last few months I’ve been interviewing many candidates for various opportunities within Steiner Business Solutions.  I’ve talked to some very talented people.  In fact, I’ve even made a couple of offers to these people, only to be turned down because they didn’t think the position was “stable” enough for them.  Hey, I don’t blame them for thinking this way.  Why wouldn’t you go to a Fortune 500 company, or some other well established company in Richmond when given the option.  I can’t begin to offer the perks, benefits and pay plans that these companies have been offering for years.  Well guess what…..these same companies that looked so appealing are now going bankrupt and these same candidates are out looking for work again.   What are they thinking now?   Is there such a thing as a “stable job” anymore?  My little company isn’t looking so bad now.  Here’s to the entrepreneurs and small business owners who battle every day with the “big boys” for customers and employees.  Maybe as these big, established companies start to downsize – or go away all together, the playing field will start to even out.  I, for one, will enjoy the game….

Not so fast!

I’m starting to feel the frustration of growth.  When it’s just a “one man operation” , things are relatively calm and under control.  I’m able to make my own decisions and pace my work at my own speed.  I could do fine just being me and working my rotation of clients for however long it lasted; however, that’s not what I want for my business.  I want to continue growing my business, so I’ve been spending the time and money networking and advertising.  Just this week, I did a rather large (for my size it’s large) direct mail campaign to small businesses in the metro Richmond area.  I feel like I’ve got a great promotion being offered to appeal to business owners to take action.  In hopes that I’m going to get a good response and add more clients, I’ve also been busy talking and interviewing potential contractors and employees to handle the additional workload.   The feedback I’m getting consistently is – “You’ve got a great concept and I think you’ll do great, BUT………”.

I’m in the accounting business.  Most everyone knows that accountants are conservative and passive by nature.  They feel comfortable with routine and seek stability in their endeavors.   My small, relatively new business appeals to them at eye level, but once they compare my offer to other corporate-type offers, they run for “safer” ground.  In the meantime, I’ve spent a good amount of my time selling my company to them – giving them access to many of my ideas and “trade secrets”.  Who knows, I’m guessing a couple of them will end up being my direct competitors now that I’ve given them a blueprint on how to start.  I don’t blame anyone for doing what they feel is right for them and their families.  I just wish they would face the realities of what they truly want in a job BEFORE they make me jump through hoops.  In the car business we would call these job applicants “tire kickers”.

After a few disappointing setbacks recently, I’ve decided tonight to sit back and take a breath.  For the last couple of months, I’ve put a lot of pressure on myself – working non-stop putting my direct mail piece together, planning my company’s expansion, and interviewing job candidates.  For all that hard work, I’m basically back at square one.  Even my ambition and hard work can’t move the needle against the backdrop of a really tough economy.  I just have to be smart, patient, and keep a positive attitude that things will come together in due time.  All of the lessons I’m learning through this growth process are valuable and strengthen my appreciation for the courage and dedication it takes to be an entrepreneur and business owner.  It also helps me better serve my clients.