Shanghai Family Finance

Many companies are looking for the right kind of tool to help them remain competitive. Offering credit cards is one way that companies can help to increase possible revenues for customers. Using a co-branded card program, a company can take advantage of several features. People pay a lot of money to get their company’s name out for others to see. Placing your company’s name and logo on a credit card is an excellent way to get your businesses name out there for people to see.

Many companies explore the use of a prepaid Visa card or a prepaid MasterCard. It is often like a gift card that your customers can use any place they wish to go. The card can be a onetime use card or reloaded as needed. Many card programs exist and it can be difficult for a company to make a determination which program to use. You should do some research to determine which program might be the best one for your organization.

So many choices exist for companies that it can be hard for companies to make choices. Premium cards, classic cards, affinity cards, corporate cards, preferred cards, and co-branded cards. Each card has benefits and disadvantages to the company and the customer. Co-branded cards can be the option that will do the most good for your company and for your customers. If you can pick the right provider to take care of the card you offer, your company can reap the best of the program and free up the resources needed to help your company do what needs to be done.

The right card can allow your customers to take care of online payments, online banking, and so much more. With the right card, your business can and will be able to meet the needs of customers and clients.

I have come across many examples of small business owners or directors who use personal borrowing to supplement their business cash flow. This practise may not strictly be the right way to finance a business but certainly it has for a number of years, been the reality for many businesses.

Unfortunately due to the effects of the credit crunch, personal credit is now becoming much harder to obtain. As has been widely reported, lenders are being more careful when considering what and to whom to lend thus affecting the availability of both secured and unsecured loans. In addition, despite interest rates being their lowest since records began, the interest being charged by banks for personal loans is now higher than any point in the last 5 years at between 8-9% APR. This increase means that even if money is available, it is more expensive to repay.

With personal borrowing more difficult to come by, small business owners are less likely to be able to get access to funds. As a result, the life blood of their business dries up and all too often the business is unable to continue to operate. More and more businesses are therefore failing and jobs being lost.

In my view, this situation goes hand in hand with the problem of personal insolvency that we are currently experiencing in the UK. The Times on Sunday reported on the 23rd May 2009 a suggestion from the Citizens Advice Bureau that there may be many more people who are suffering personal insolvency in the UK than the official figures show. I believe that this analysis is absolutely correct. According to insolvency statistics published by the Insolvency Service, in the first quarter of 2009, just under 30,000 individuals were declared personally insolvent.

However, these figures only include formal insolvencies – i.e. people who have declared bankruptcy or entered into an Individual Voluntary Arrangement (IVA). I believe a conservative estimate would be that for every person declaring formal insolvency, there are at least another two who are insolvent but dealing with the problem by using an informal Debt Management Plan (DMP). A Debt Management Plan is simply a gentleman’s agreement between an individual and their creditors to reduce monthly debt repayments to fit within an affordable budget. There is no formal register of these plans and therefore no way currently to accurately measure the number of people who enter into them. If my estimation is correct, this would mean that an additional 60,000 individuals would have become insolvent in the first quarter, of 2009 totalling 90,000 all together.

Surely the significant increase in the number of people suffering personal insolvency simply highlights the problems that are currently being faced by small business. Where access to cash is not available, increasing numbers of businesses are likely to fail. The knock on effect of this is increasing redundancy and the likelihood of personal insolvency for both employees and the former business owners themselves.

The Government has made its intentions clear to help businesses through increasing availability of business loans. However, I believe that whether we like it or not, the life blood of small business is the finance that business owners take on personally in the form of personal loans and mortgage debt. As such, where these types of funds are not readily available, the difficulties currently facing small businesses are likely to continue.

In a recent analysis of Australian Bureau of Statistics data it has been revealed that there has been surprisingly strong growth in the number of small businesses in Australia. Interestingly, the data also highlights that along with an extremely high failure rate, the most notable outcome for small businesses, is that they stay small. It is widely accepted (and reported) that a great majority of small businesses will fail eventually. While it is necessary to be aware of these statistics, what is more important and should be given a greater level of attention, is what small businesses and small business owners do in the meantime to grow their business.

There are five key reasons that have been identified as to why businesses stay small. Business owners can focus on these key areas to work towards achieving success for their business.

1. A Lack of Vision for the Business – Business owners need to have a clear vision of where they want their business to go. Without vision, a business becomes directionless and loses focus of what its purpose and goals are. A business with no direction will find it hard to make any type of decision. Specifically, they are unable to take advantage of opportunities that arise to help the business grow, and similarly they cannot easily identify those that should be avoided. Often, a business that has no vision will expend a significant amount of time and money on trying different a range of options with the expectation that they will have an immediate and positive result.

2. No Passion or Commitment – Passion is usually aligned with a strong vision for the business. The dedication and commitment that comes from a passionate business owner will help in achieving the business’ goals. Whilst it is advised to set goals for the business, without commitment and passion, business owners can easily become distracted from these goals, and this in turn contributes to further slowing the growth of the business. Passion and dedication is infectious and a truly passionate owner can effect passion in their employees and customers.

3. No set goals or plans – A business needs more than just vision if it wants to achieve its desired position and level of success. Goals create stepping stones towards the future business position. These does not necessarily need to be a formal business plan – although this is highly recommended as it helps to plan and track the businesses progress – but it should at least be considered in detail to the point where it is clear in the mind of the business owner/s and easily communicated to staff and customers if and when required. Goals also assist businesses to not only find opportunities that may help them towards success but also creates the belief that success is achievable.

4. Business owners not valuing their time – It may seem obvious, but it is imperative that business owners spend dedicated time on the core functions of their business. They need to spend time working on the business not working in the business. Business owners often make the mistake of working on non-core tasks within the business to save on money or due to inadequate systems put in place to cope with these tasks. In order to be more successful, business owners should employ staff to cope with these non-core tasks and to help create adequate systems to then allow the owner to focus on building and strengthening the business.

5. A lack of business knowledge – Small business owners do not necessarily need to be an expert on everything but it is important for them to have the right kind of knowledge. Often having a basic understanding of the fundamentals of running a business will encourage them to seek advice and support in the areas of the business that they do not know as much about. An important area which is usually forgotten or is thought of as a costly expense by business owners is education. Education should instead be thought of as an investment, as a lack of education results in a lack of knowledge. Without knowledge and skills the business is inhibited from growing to it full potential.

The issue that most small businesses and small business owners have is that they find it difficult to achieve the reward and results that they expect in return for the effort in time and money that they have invested. It is important to remember that with the right vision and professional guidance and advice there is always the opportunity to re-invigorate and refocus your business, putting it back on track to the visions and goals that you have planned for.