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‘Factoring’ can help businesses with cash flow when loans are tight
By Bruce Freeman additional working capital when — minus a fee — comprise a traditional means”. business, working capital and
Scripps Howard News money is tied up in accounts thriving, if little-known, global A factor purchases a busi- personal credit score.
receivable. Meanwhile, obtaining industry. ness’s accounts receivable and Factoring differs from equity
Dear Professor Bruce: I’m a small- funding from banks and other It’s called factoring and it’s gives them a large percent- financing in that factors don’t
business owner and am finding traditional resources means a worth an estimated $1 trillion a age of the total creditworthy take equity in the company. Since
it difficult to get a bank loan. I’ve long and arduous process. year worldwide, with $100 bil- accounts receivable up front. The contracts are short-term, the cli-
heard of something called factor- Furthermore, how many times lion of that in the United States remainder comes when they are ent could elect to stop factoring
ing. What is it and when is it time have business owners heard that and about $4 billion in Canada, collected. whenever he or she chooses.
to consider alternatives to tradi- the check’s in the mail? according to Factors Chain Inter- The factor handles all the The industry, notes Birnbaum,
tional bank loans? Even when dealing with house- national, a global network of credit checks, collects the is set to grow again in light of
Answer: As the credit crisis hold corporate names, delayed leading factoring companies. accounts receivable and ledgers current instability in U.S. mar-
spurs traditional lenders to payments are surprisingly com- According to Brian Birnbaum, the receivable so the client is kets related to credit lending
tighten credit standards and mon as head offices decide con- one of the founders of Liquid able to concentrate on growing practices among major lenders,
raise fees, more small-business tractors or vendors can wait Capital, “factoring is the pur- the business. such as banks. Factoring does
owners and entrepreneurs are another 30, 60, or even 90 days. chase of corporate accounts Factoring differs from tradi- well when banks tighten their
seeking other ways to start a It turns out companies that r e c e ivab l e . I t ’ s g e n e r a l ly tional bank loans because the lending and people can’t find
business or keep it going. provide interim financing to used when a company is in its credit decision is strictly based money anywhere else.
Small growth-oriented busi- these struggling small-business infancy or experiences a growth on receivables, rather than Bruce Freeman is president of
nesses and established mid- owners by purchasing their cred- spurt and gives that company other criteria, for instance, how ProLine Communications, a mar-
sized companies often require itworthy, outstanding invoices access to capital through non- long the company has been in keting and public relations firm.
Yes, it’s really happening: Now do something about it
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By Jeffrey Gitomer having trouble adapting to chang- less TV time. The news is not invest in them. They will thank you their situation, then and only then
ing economic climates, followed great — especially people giving and reward you with their loyalty. can you begin to write what you
It’s been a by what you can do about it. their opinion about what is hap- intend to do – your objectives.
long time com- pening. Watch less of it. Now is SEIZE THE OPPORTUNITY You may have several objec-
ing, but change REASONS YOU RESIST CHANGE the time for action, not opinion. For years I have defined change tives. Whatever the objectives are,
is gonna come, 1. Your inability to face the reality Study attitude for 15 minutes as opportunity. That definition is they must be clearly stated and
oh yes it will. that it’s actually happening to every morning. Give yourself still accurate. defined in writing. Do not confuse
— Wr i t t e n you. The news is always about time to read, think and plan. This is not a time to “get over objectives with goals. Write down
and performed someone else’s drama. That’s Relax mentally. Breathe. it.” This is a time to get on with it what you intend to do to help the
by Sam Cooke, why you watch it. Get up earlier, stay up later. and take advantage of it. customer, do more business with
1963 2. Your natural defensive posture. Now is not the time for “balance.” Before you try to make another the customer, gain more referrals
“It’s not my fault! Someone else Now is the time for “money.” sale, before you call on the next from the customer, and make the
Change is not “in the air.” It did it.” Do your best every day at customer, look at the real world relationship with the customer a
has hit the ground running, or 3. Your natural resistance to what’s work. You never have to prove so you can come up with real financially rewarding one.
should I say running rampant. new. “It’s always worked before, your worth if you’re doing your ideas and real answers. Now, I’m going to challenge
Breaking news: Have you and I liked it that way.” best. Let me be more specific. I want you on a mastery point. Once
heard? The economy is down. 4. Your procrastination and inabil- Avoid attending the pity par- you to look at and define your you have this game plan written
It hasn’t been this way, this bad ity to face reality. “I see it com- ties. There are plenty of them. real world, and their real world. down: situation, opportunities,
or this low for 50 years. Companies ing, but it may just go away, I’ll Don’t participate in the Before you visit any customer, objectives, and intentions, I chal-
are crumbling, and rules are being change later.” rumor mill; wait for the facts to you have to know what the total lenge you to share these thoughts
abandoned. The government is in 5. Your previous comfort and pres- emerge. situation is. In these times, “sell with your customers so that they
scramble mode as never before. ent comfort. “I have a lifestyle, Don’t participate in the them” may be last on the list. can become aware of how seri-
But that’s them. and I don’t want it interrupted!” grumbling. Just get to work and Don’t make the fatal mistake of ous, how professional, and how
What about you and yours? 6. Your unwillingness to abide sell something. just defining your situation. You certain you are about growing
What’s happening to you? A by the new rules and the new Make a projected cash flow. also have to define the customer’s the relationship, helping them,
change in business volume? Dif- standards. Resistance to self- Cut now so you don’t run out of situation, the market situation, and building your business.
ficult cash flow? Credit restric- improvement. Resistance to be money in the near future. and your company’s situation. Your list of ideas and answers
tions? Change in job status? Work measured by results. Resistance Sell more. No company ever Write down the situation. will not only set you apart from
environment? Work require- to being measured against oth- cut their way to success. And then start looking for your competitors, who at this
ments? Customers hurting? ers. This is especially true if Guard your customers. Your opportunities. moment are merely trying to
Yikes. you’re a longtime employee. competition is gunning for them. What are the opportunities for sell and collect, but they will
It’s not “change” — it’s “drastic 6.5 You think: “It can’t happen Serve your customers better the customer, for your company, also build your relationship in
change.” here.” Uh, Sparky, it already has. than ever. Earn their loyalty with and for you? Is there an opportu- the more difficult times.
How are you reacting to And it’s not going away any time value. nity for you to capture a higher Then, when times get better
the events? Most people are soon. Help your customers with percentage of the customer’s busi- — and they always do, you will
experiencing a combination of Do something! their issues. Their situation is ness? Is there a market opportu- have earned the business and the
reluctance and resistance. A what’s causing your falling sales nity that customers are missing loyalty that you deserve.
combination of scared and wor- WHAT YOU CAN DO numbers. because they are more focused on Jeffrey Gitomer is the author of
ried. You are not alone, but it Is there a solution? Are there Give something of value to their woes and their competition, “The Sales Bible” and “The Little
doesn’t mean you have to join the answers? your customers. They will thank rather than their strengths? Red Book of Selling.” He can be
afflicted or the paralyzed. Yes, there are. you and respect you. Once you’ve identified all the reached at 704/333-1112 or e-mail
Following is part of why you’re Create more self-time and Select your top customers and opportunities and you’re clear on to salesman@gitomer.com.
Visit www.suffolk.edu/business for more information about all our business programs.
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About the Speakers: Michael Barretti
9
Forget fear:
Find ways to excel
Great salespeople
By Marvin Walberg
Scripps Howard News Service
small group of co-workers who
you can trust and turn to when
the going gets really tough.
put customers first
Sometimes the best offense is a Take turns being “the positive By Bruce Freeman of top sales producers, but it’s
strong defense, and I’m not talk- one” and injecting a daily shot of Scripps Howard News
Great sales people also more than that. Great
ing football. courage. have a strong belief in sales people have a strong
This is not about job search- 4. Find a productive distraction. Dear Professor Bruce: I’m a small belief in what they sell. They
ing, but job keeping. According What makes you feel better; a business owner and have never
what they sell. They are constantly learning and
to most people, our economy is in little stronger or braver? U2 on had any formal training in sell- are constantly learning know their product inside out.
crisis, and workers everywhere your iPod? A can-do mantra? A ing. What can I do to be better What really makes the dif-
are full of white-knuckle fear. long run at lunch? Identify that at the sales process and grow
and know their product ference is their confidence.
What may happen next? one little thing, your own per- my business? inside out. What really A customer can sense a sales
Bill Treasurer, founder of the sonal “fear buster,” and use it Answer: Here are a few ideas: person’s confidence and belief.
national training company Giant early and often. According to Barry Farber,
makes the difference Once you lose your confidence
Leap Consulting and author of 5. Just say “no” to the pity party. author of “The 12 Cliches of Sell- is their confidence. in what you do, so will the
“Courage Goes to Work” (Ber- It’s tempting to commiserate ing” (Workman) and “Superstar customer.
rett-Koehler), offers these five with co-workers. Don’t do it. It Sales Secrets” (Career Press), begin to build trust because 5. Follow up and follow through.
tips to help workers deal with will stoke your fears and shake “There are many key attributes you’re focused on their needs, What really shows the cus-
fear in scary economic times. your confidence even more. that are needed for success in not your own. tomer your value is how you
1. Refocus on your work. You can change the negative selling.” 3. Build long-term relationships. follow up after a sale or after
Fear is the enemy of productiv- tide and have a positive effect on Here are five strategies that If you want to build your busi- you’ve promised them some
ity. Get clear on what needs to be your co-workers and customers can make a huge difference in ness, start thinking about ways information. Every time you
done, right here, right now. And by being positive and productive. how you sell and how much you to build your prospects and cus- follow up, make sure you have a
then go about the business of Bad news sells but a positive atti- sell: tomers’ business. How can you new idea or new information to
doing it. If you’re not contribut- tude is contagious, so spread the 1. Great salespeople learn how introduce them to people and share so you’re always looked
ing, you may be in danger. Know positive germ all around you and to listen and listen to learn. organizations that would help upon as positive. Go back to
your job, and then do it. watch what happens. Get out of your mind what them? People buy from people every one of your customers
2. Stop playing it safe. You just might help ensure you’re selling and start think- they like, trust and respect. and thank them for their busi-
Ditch the herd. While everyone your own future, and that’s a ing about what your custom- When you’re seen as someone ness and ask if there is any-
else is hiding, you can stand up good thing. ers are selling and what their who constantly adds value, the thing you’re not doing that you
and stand out, getting noticed for Marvin Walberg is a job goals are. relationship goes to a whole new could be doing to serve them
your talent and contributions. It’s search coach. Contact him at 2. The real key is to get beneath level and business seems much better.
easy to follow the herd. It takes mwalberg(at)bellsouth.net, mar- the surface and understand easier to close. Bruce Freeman is president
effort to lead. vinwalberg.blogspot.com, or PO your customer’s key buying 4. Develop unshakable confidence. of ProLine Communications, a
3. Form a posse. Box 43056, Birmingham, AL criteria, goals and challenges. A positive attitude is one of the marketing and public relations
Create an inner circle — a 35243. Once you start doing that you most important characteristics firm in Livingston, N.J.
When the going gets tough,
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