Borrowing money to fund expansion

Posted in: Blog, Funding, Uncategorized by Brian Cauble on September 13, 2009 | 4 Comments

You have a few options if you need a decent, but not huge, amount of money. There are three main types that I can think of that would apply in this situation: Debt Financing, Equity Financing, and Commercial Finance.

Debt financing means taking out a loan. Not all loans are created equal and some will want you to put up your personal property, others will not. I would consider going to the Small Business Association. It is their mission to help people like yourself. Also check with any bank that you have a long standing relationship. They will definitely want to look at your business finances to determine if they think you will be able to pay them back.

Equity financing means taking an investor. When you need 50,000 to 500,000, Angel investors can be a good option. The key is they will be looking for a good return on their investment. So if your company is likely to grow slowly, I doubt they would be interested. The Birmingham Angel network is one place to look at.

Commercial finance means borrowing from a lender based on your business assets. If you have anything worth money in your business (real estate, equipment, stocks, A/R, etc), you can borrow against this. Porter capital is a local firm that does this. It is a loan, but only against your business assets.

I hope that helps you get the money you need. For what it is worth, I am discussing having Superior bank talk in November about this subject at a meeting.

Starting a business – my overwhelming, inspiring, terrifying, amazing journey

Posted in: Blog, Startup by Brian Cauble on July 10, 2009 | 84 Comments

Just so you know, I am a bit exhausted at the moment.  I should probably be working (or sleeping) instead of writing this post.  But I want to tell you about my recent journey.

I have started a company, two in fact.  One of my companies is a mobile phone software development company called Appsolute Genius.  The other company is a non-profit called “Birmingham Entrepreneur”.  Sound familiar.   Why did I do it?  Because I caught the bug: the “I am passionate about these things and this is what I want to do with my life” bug.

Birmingham Entrepreneur started as a way for me to get more involved in the entrepreneur community in Birmingham and to keep me focused on entrepreneurship.  I never expected to love it so much.  I love doing it.  To most people it sounds like work.  I take time to meet with entrepreneurs, post blogs, post links and send tweets about entrepreneurship, look for sponsors, look for meeting locations, look for speakers, try to market the group.  It is actually a lot of work.  Work that I currently don’t get paid to do.  But it isn’t just work to me.  It is a passion and a mission.  I have a mission to make Birmingham Entrepreneur special.  I have a vision where Birmingham Entrepreneur can make a difference in this city and really help it grow.  It may sound crazy, but I believe it is doable and I believe I am the person to do it.

Appsolute Genius is my mobile phone software company.  Now I am a geek.  It took me a long time to come to grips with that statement, but I am.  I love technology and I love how technology improves our lives (when done right).  For example, Social media allows me to meet more people than ever and to keep in touch with friends and family I wouldn’t otherwise keep in touch with.  Mobile software allows me to run my life more efficiently and makes my life more fun everyday.  I love seeing how mobile technology is changing our lives.  I understand technology on a human (emotional) level, and I love it.

So now that you know what I am doing with my life, let me tell you what it has been like.  So many words come to mind: scary, exhilarating, lonely, fun, amazing, overwhelming, inspiring.  Many days I feel all of these emotions.  You will hear so many people tell you to be passionate about your business.  They are 100% correct.  Why?  Because it is extremely difficult and you will probably give up if you don’t love it and believe in it.  You have to be willing to do whatever it takes.  I am so tired as I write this, and I have doubts from time to time.  However, I know that this is the life I want.  And I know that whatever it takes, I will make it happen.

Why Use an Attorney?

Posted in: Blog, Legal Issues by Josh Andrews on July 9, 2009 | 2 Comments

When you decide to “make it official” and form a company, you have many options. You can do it yourself, you can ask someone who has done it before to help you (though the one helping you may be offering you legal advice, which is not good), you can use a document generating online service, or you can call a real-live attorney licensed to practice in your state. As an attorney, you can assume my answer is that you should contact an attorney. In this post I will tell you why it is the best option.

You know what you want, but you may not be certain how to achieve it. When you create a company, you must treat it as an entity separate from yourself. Depending on your entity selection, you may create hurdles to accessing what is yours as the owner. A qualified attorney worth the paper on which his law degree is printed will take the time to explain to you those options, and work to know what you want and how to achieve it. A document generator will not do that. A well-qualified lawyer should be able to discern what you mean from what you are saying. A document generator only thinks in “true” and “false” and only gives you what you ask for without discerning what you really mean.

You are not a lawyer. You do not have training in the legal facets of creating a company. Not that you couldn’t do it, but you need to focus on selling your product or service. One of the first steps to your entrepreneurial success is to realize your limitations and employ those who will complement your limitations. Asking a lawyer to work with you on the legal aspects of your company and your business is an investment worth making.

Getting it wrong can cost you everything. In the litigious world in which we live, you do not want a lawyer working to undo your personal attempt at your company’s formation. You want to know that your investment is protected because you did everything right. If you make a mistake, your liability shield may be found to not exist, and everything would be at risk.

It will cost more to correct a mistake than to make it right in the beginning. Reassembling a poor foundation can often take more time and energy and cost more money than ensuring it is proper in the beginning. Like I mentioned above, you want a lawyer making sure you are protected before someone else brings in a lawyer to prove that you aren’t.

Business owners are willing to ensure against many things, but they often overlook the insurance-like benefits of knowing that all of your legal foundations are firm. Never forget, it is much easier to defend from a firm foundation than it is if your foundation is questionable.

Keeping up is part of your job!

Posted in: Blog, Technology by Brian Cauble on June 1, 2009 | No Comments

Are you paid for what you know and can figure out?  Are you a knowledge worker?  There is a good chance that you are.  This world is changing at a dizzying pace.  Technology has accelerated the pace we must learn at.  It has also opened the world up to competition from all over the globe.  Many industries are being replaced or at least modified significantly.  The music industry was slow to adjust to changing technology and consumer demand and they have been decimated by it.  The newspaper industry was another industry that was slow to adjust.  Blogs, twitter, and online classifieds have put the entire industry in jeopardy.

So what does this mean to you?  It means that you have an opportunity and a risk.  You need to keep up with how the world is changing.  If you don’t feel like you understand how it effects your business, you need to keep trying.  You can also turn to people you respect for their thoughts.  It doesn’t have to just be people you know.  Read blogs, articles, and follow people on twitter.  If you do manage to understand where things are going, you and your business have a real opportunity.  However, if you don’t, you put everything at risk.  You don’t want to find yourself in the position of the newspapers do you?  Wondering how you never saw the changes coming and wondering if you’re business will survive.  I don’t.

Five reasons Apple gets it (Customer Service)

Posted in: Blog, Customer Service by Brian Cauble on May 29, 2009 | No Comments

I want to share a quick story with you.  My macbook started getting a crack in it a few months back on the case.  Well, the little crack started to get bigger and bigger until some of the casing was chipping off.  Needless to say, I felt that this shouldn’t happen after just over a year.  In fact, this is a know issue for plastic macbooks.  As luck would have it, my warranty was up when this started.  I was just going to put this off until it got back enough.

Well, the other day it dawned on me that I purchased my macbook on my American Express.  Why does that matter?  Because Amex extends your warranty by a year at no cost.  Maybe just maybe, I wouldn’t have to spend $200 or $300 dollars to repair the computer.  So I called Amex up to inquire about the warranty figuring that it probably wouldn’t get covered due to fine print.  I figured they would say that we only cover PC purchased between January and March in New Delhi.  Who knows.  I was ready for excuses.  To my surprise, Amex was very easy to reach and very helpful.  They needed 3 things. My receipt, my credit card statement from the purchase, and a repair estimate.  Not too bad.  For several hundred dollars, I’ll do that.  

So I got the paper work and headed off to the Apple store for an appointment to get the repair estimate.  Let me first say that Apple makes it so easy to get checked in at the store.  They have a constantly updated list of who is next in the wait list projected on the wall, and you don’t generally wait very long.  So they call out “Brian C with a Macbook”.  I go to the desk and explain to the tech what the problem is and that I just need a repair estimate because Amex is going to cover the repair.  Lo and behold, he looks at the laptop and says “we’ll cover it no charge. We can have it ready for you in 24 hours or less.  Is that ok?”  After reviving myself from a sudden fainting spell, I said sure.  7 hours later, I get a call from Apple saying I can pick up my computer.

Now I know they did exactly what they should but I want to list the things that impressed me.

1. Apple knew they had a problem and admitted it.  How many companies make you fight with them and go to a manager before they give in?

2. They fixed it quickly.  How many companies would have to ship it off for a week?

3. They communicated well.  From the time I showed up at the store, I was constantly updated by a updated list, by reps asking how they could help, and by someone calling me to tell me everything was good.  How many times do you have to call and deal with one person after another just to find out if your repairs are done?

4. They didn’t hide behind another company. The tech knew that Amex was going to cover the cost but he knew it was Apple’s design issue and so he fixed it.

5. They give their employees power to make decisions. In most of my dealings with Apple, you can tell that the employees have the power to satisfy the customer without asking a manager.  That isn’t always true, and shouldn’t be, but it is most of the time. 

So I have to give Apple big props.  Instead of irritating me, they confirmed my decision to buy a mac as a good one.  So when you setup customer service at your company some day, go to the Apple store.  They just seem to get it.

PS. I have to give a little bit of love to Amex.  They handled everything nicely also and made it a fairly easy process to fix my laptop.  That is a really nice benefit and a good reason to purchase major items on my Amex in the future.

Entrepreneur = Salesperson?

Posted in: Blog, Business Development by Garrett on May 28, 2009 | 4 Comments

My business background is deeply rooted in sales and while I know it’s not for everyone, I love it. Building a network, helping people get what they need and controlling your own destiny… what’s not to love? Read more…

Twitter, LinkedIn, Facebook, Oh My

Posted in: Blog, Networking by Garrett on May 23, 2009 | 1 Comment

Every week you look around and it seems as if someone is telling you about some new social networking tool.  LinkedIn, Facebook, Twitter, Friendfeed, Plaxo, Bebo, Flickr, Youtube, MySpace.  You go to many of these sites and sign up for the service.  You make some friends, link up with some people, and get some followers.  But what is the point.  It can be so much so quickly.  Frankly it can be overwhelming.  

Social networking is really hot and I am here to say that it can be a great experience.  So here are my thoughts and techniques for using social networking.  First off, don’t try to do 10 different services.  Pick three different services, four max to put effort into.  I use LinkedIn, Facebook, and Twitter.  Second, decide what you want to accomplish with each service.  

LinkedIn: I use LinkedIn for business networking.  When I meet people at events around town or at conferences, I look them up on LinkedIn.  About 70% of them are on the service.  I review their profile to see what else we might have in common.  Often we have friends in common that we didn’t talk about or we share a passion such as photography.  I quickly send them an invitation to connect.  I also run a number of groups to connect people.  I invite people to connect that join my groups.  That way, when I run into them at an event, I know have an excuse to introduce myself.  It is a good way to keep in touch and build on your business network.  

Facebook: I use Facebook to connect with friends, former high school/college friends, and relatives.  This is a personal space for me.  I put pictures of families and vacations on Facebook for my friends to see.  I say happy birthday to them and chat with them.

Twitter: I use twitter to build a reputation and provide valuable content.  The same way that I use this and other blogs, except more often and shorter posts.  I also find out what is happening around town with Twitter and gather valuable information for experts in fields I care about.  Twitter is an amazing source of information.  Just follow people you care about and find interesting and make sure you are providing useful, interesting information.

Social networking can be a great thing for your career or business.  However, know what you want to do with each service, and keep it under control.  Don’t check them every 20 minutes.  Set aside two or three times a day and go through the services.  Also, consider using a service like NutShell Mail to have the updates sent to you through email. 

In short:

1. Pick a few services to use

2. Have a goal for each service

3. Be relevant, passionate and interesting

4. Don’t let it get out of control

Good luck with your networking!

Do We Discount or Do We Give A Little Less In This Economy?

Posted in: Blog by Garrett on May 20, 2009 | No Comments

We were driving down 280 today (@tonylegrone) and I (@garrett98), when a discussion about chicken strips started. Turns out Dairy Queen has changed vendors or products when it comes to chicken strips. As Tony said, “They use to be huge and juicy!” Now they are these skimpy and very average strips. We went through all the reasons why a company would go from a premium product to a very garden variety and sub par brand of strips.

Read more…

In This Economy, Play “Small Ball” for Success!

Posted in: Blog by Glenn S. Phillips on May 19, 2009 | 6 Comments

Everyone loves the “Home Run,” whether it is in baseball or business.  That one play (or project) that scores for sure, makes the paper and even has a clear hero!   Unfortunately for many teams and businesses, home runs are not the most common play.  And in a slow economy, the home run deals become even less common for businesses, potentially putting companies at risk.

So if you are a good coach or manager, what do you do when the big hits are slumping?  You recognize the situation, you take what the opponent is giving and you adjust.  You deliberately play “small ball.”   That is, you manufacture scoring by patiently hitting singles, bunts and taking the walks.  You suggest smarter projects to the client for things they really need or did not have time for last year.  You find creative ways to setup projects and flexibly payment plans.  Does all this have more overhead and effort?  Probably.  However, it typical has less risk too and, in some ways, that reduces the overhead of all the strike outs you get swinging for the home runs.  

It the current economy, most businesses that may hire your company will likely have slowed or stopped the big projects for at least the short-term.  But business and commerce has not stopped, it continues on.  That means the companies that can step up and “take one for the team” by accepting smaller, flexible projects from their clients can stay busy and successful.  These companies also demonstrate stability that can add to their reputation when business heats up again.

Keep in mind that playing “small ball” with projects does not mean unprofitable.  Playing “small ball” in business means you are still advancing the bases, still limiting strikeouts and still playing the game with discipline.   In some ways, you are even playing with more discipline.  That can be a good thing for you and your clients!

Temporary finance for your business

Posted in: Blog, Funding by Brian Cauble on May 15, 2009 | No Comments

Imagine for a second that your business is experiencing a shortage in cash flow. You sitting at your desk late at night looking at the screen wondering how you make payroll. The funny thing is that accounting shows that you are profitable. You have made money. The problem is that your money is tied up by people who owe you money (accounts receivable). If you could only get those people to pay your invoices, you would be fine. So how do you do it? You can’t.

However, you can get the money that is owed to you through a method called Factoring. Factoring means that you are selling your invoices at a discount. Factors will buy (most of) these invoices and they will collect it. The upside is that you get your cash immediately, and you can make payroll. Another upside is that you don’t have to collect the money. The factor now owns these invoices. The downside is factoring can be an expensive form of financing. However, some times it can be a good form of temporary financing in your business.

If you have relatively good credit, you should consider borrowing against your assets instead of Factoring. You can borrow against your A/R, Real Estate, Inventory, Purchase Orders and anything else of value that can be liquidated. This is called Asset Based Lending and it works much more like a home equity loan for business. Except your collateral is not your house. It is your assets. Just like any loan, you pay a rate (normally lower) on only what cash you borrow and you pay it back in the future.

These are both good alternative methods of getting cash when you are generally a strong company but in need of temporary cash. Just use them sparingly and make sure that you shop around for the best rate. The are thousands of Factors and practically all banks will lend you on your assets. Good luck!