Debt Negotiation Tactics – A Sense of Urgency Promotes Your Position

June 28th, 2010

If your company is distressed and facing bankruptcy, I have found that when your position becomes public to your vendors, suppliers, bankers and competitors, every creditor will want to get what they can from this “fire sale” before funds are no longer available. This sets the stage for settlement.

Everyone is in fear of ending up with nothing when all the vultures swoop in to tear apart your business. This makes anyone and everyone more likely to take your settlement offer and not be too picky when it comes to the final agreement.

When appropriate to do so, I would like to suggest some of the following solutions to be inserted in the settlement letter:
• A straight, one-time payment with reduction of amount owed, plus any accrued costs, fees or interest.
• Survival payments provided to allow you to remain active, as an ongoing, viable concern, perhaps while bridge financing or accounts receivable factoring is arranged.
• Graduated workout payments to continue the business relationship between you and the creditor. This option may allow the creditor to recover some, or all, of their costs over a period of time, if the creditor agrees to continue the relationship, even if on a cash only basis.
• Schedule monthly payments, perhaps with a balloon payment at the beginning or end of the settlement terms.

Properly and professionally worded settlement offers typically receive the most expeditious responses. One may even combine elements to continue providing to the creditor reasons to accept the offer. Suppose the letter has outlined the desperate financial situation facing you. This will increase the overall sense of urgency.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Debt Negotiation, Debt Reduction | 2 Comments »

Your Customers Are The Most Important Asset You Have

May 30th, 2010

So it all comes down to this: you must provide a quality product and service. Also, customer perception is key to your success or failure. Without your customers, you cannot be in business, no matter how good your product is, no matter how good your service is. It’s that simple. Customers are the most important component of your business.

And since your customers are the most important component, it is fair to treat them as a business asset. The interesting thing about this is that many business owners do not treat their customers as assets. They just let customers come and go, maybe giving more attention to the ones that spend more money.

When they do this, business owners are missing something big. Let me explain it with an example. I consulted for an Internet business that was in negotiations to sell their operation to a larger competitor.

How do you think the competitor was going to pay them for their business?

It turns out that the payment would be in the form of a per-customer payment. I think it was somewhere in the neighborhood of $300 per customer.

Why did they structure it this way?

Because it makes the most sense. When you think about it, customers are a good indication of the value (and health) of a business.

Now this works best for businesses that are primarily subscription-based, and generally other parameters are used when calculating the worth of another type of business. If it is a distribution business for example, the gross sales or net profit numbers may be used because each customer varies more widely in their worth.

In a subscription-based business, the monthly net worth of a customer is even more than in a distribution business where one customer may spend $10 per month and another $100,000. You can see how the gross sales figure might be more indicative in this case.

In any business, you can look at the customer base and put a “value” on each customer. The key point here is that customers should be viewed as assets and treated as such.

Note that these assets, your customers, do not appear on the traditional balance sheet or income statement, which are probably the two most common financial statements in a business. Even so, they are assets!

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Management | 1 Comment »

You Can Save Money When Buying a Home

May 30th, 2010

In the recent economic downturn, real estate has been one of the hardest hit sectors. Prices are now in a steep decline, or near their bottom, in many geographic locations. You can achieve a significant savings if you are in the market for a home in these locations. In addition, if you are a first-time homebuyer, you may be able to take advantage of various government credits.

If you are looking for a home for yourself, or looking to make money by investing in real estate, you can save big when you buy a foreclosed property. When a homeowner fails to make their mortgage payments, the mortgage company begins the foreclosure property. If the homeowner remains in default, the mortgage company eventually takes possession of the property and puts it up for auction. You can buy these properties at auction for a significant discount; however, you are usually not allowed to inspect them and although you can see them from the street, you might be in for a surprise after you take possession.

The law requires that a lender publicly post properties in the newspaper that are in the foreclosure process. These are headed for the auction block. If you are planning to purchase a foreclosed property, you will need to pay cash or put down a percentage and finance the remainder soon after the auction, so be prepared. You also might discover that the previous owner is still living there, and you will have to evict them yourself. There may also be problems with the title. These are risks you must take if you want to save money this way, but the savings can be tremendous.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Financial Freedom | No Comments »

Why You Should Be Wary of Online Reviews

May 30th, 2010

Shopping on the Internet has become a viable, low-cost alternative to shopping locally. One advantage of cyber shopping is that you can do it from home, and it is much easier to compare products when you can type the name in the computer and get a screen of prices in response. Many websites are tailored to do exactly this: take a product name and return a list of vendors that offer it for sale, sorted in various ways, including lowest price first. Many sites also provide product reviews for a product, so you can read what others have to say about the product. These reviews come in two forms:
- Made by verified purchasers, and
- Made by anyone who claims to know something about your product.

There is a caveat here. Some product reviews are “planted” by the manufacturer of a product, or by companies hired by the manufacturer. Online businesses have sprung up that offer the service of surfing around on the Internet and inserting positive product reviews. For example, suppose that you manufacture and sell a particular hearing amplification device. You sell several hundred thousand per year. If you want, you can just let the consumers judge your product and enter their own reviews into the many product review sites on the Internet. If you receive good reviews, then excellent, your sales will go up because people will read them and see that you have a good product.

But one day, you are surfing around, reading the reviews of your product and you discover that there are many bad reviews of your product; in fact, many are outright lies about your product. After doing some research, you determine that just as there are Internet companies that you can hire to enter positive reviews for your product, there are also companies (often the same ones) that you can hire to enter negative reviews about your competitors, and you suspect that this is what has occurred in the case of the bad reviews of your product.

How can they do this? Isn’t this type of thing illegal?
Actually, no. Many just consider it a new (and rapidly evolving) form of advertising. So in order to stay competitive, you decide to hire a company that will place positive reviews about your own product and negative reviews about your competitor’s product in strategic places throughout the Internet.

I am not saying that all reviews are bogus; rather, I am just trying to illustrate one of the pitfalls of shopping on the Internet. Yes, you can find tremendous deals, but it is a different way to shop. I tell you this story so that you will read these reviews with caution. Sometimes you can find the email address of a product reviewer and you can send them an email with questions about the product.

An advantage of Internet shopping is that you can easily buy products from vendors that would normally be inaccessible. Some vendors have highly unique products and before the Internet was available, you could not easily browse through their inventory. Some of them did print and mail catalogs, but shopping on the Internet is much more interactive and far cheaper than shopping via bulky printed catalogs. Some websites allow you view a 3-D rendered product from all sides and even zoom in for a detailed view.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Management | 2 Comments »

Ways to Save on Utility Expenses

May 30th, 2010

Reducing your home heating expenses should be a short-term goal that will add money to your bank account. I will offer some general tips for saving money on home heating. After you develop your budget and you record a year of actual expense data on heating your home, you can decide which of these tips will allow you to reduce those expenses so you can apply the savings toward meeting your long-term goal of financial freedom.

Heavy and light drapes – If you live in a geographic region where there are four seasons, you can have two sets of drapes for your windows, a heavy set for the summer when you want to keep the heat (UV rays) out, and a light set for the winter when you want to let the heat in. In winter, when the sun is shining, open the drapes entirely to let in the UV rays.

Close the doors – In unoccupied rooms, keep the doors closed and the heating vents shut. This way, the heat will remain confined to the occupied areas of the home.

Heat less water – Take shorter showers in the morning. Although it feels good to take long hot ones, showers are primarily for cleaning your body. Also, wash clothing in cold water whenever possible. You can also turn down the overall water temperature on the water heater. Install energy-saver shower heads, and wash only full loads in the dishwasher.

Maintain your heating system – Each year before turning on your furnace, you should have it professionally inspected. At a minimum, you will want to change the air filter every month or so during winter. A dusty filter will restrict the airflow, which will increase your heating expense. If your furnace is too old, replace it because the technology has advanced significantly in the last few years, and newer furnaces are much more cost effective than older ones.

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andre@andrelarabie.com

Posted in Financial Freedom | 1 Comment »

Using Video Marketing To Market And Grow Your Business

May 30th, 2010

Have you noticed how more and more Internet videos are finding their way onto prime time television news shows? It is nearly impossible to watch the nightly news without seeing such a video.

These are called “viral videos” and usually they arrive on national TV because they were interesting enough to be passed around on the Internet. Several top websites carry and rank these videos daily based on viewer popularity. YouTube is one of them.

Viral videos can also be a force in marketing. Consider the Arm Blanket, a simple product consisting of a blanket with two sleeves. The owner puts their arms in the sleeves and “wears” the blanket.

After only a few months in existence, the inventor of this product realized millions of dollars in sales, and this popularity was largely due to viral videos that showed people “wearing” the blanket in different venues.

Before the advent of the Internet and viral videos, to launch such a product might have been very costly and so difficult that it may have failed. But many videos made by the owners of the blanket were passed around on the Internet and served to fuel the remarkable sales of these products. Companies exist that can help you use this new exciting form of marketing.

How is this different than traditional TV advertising?

First of all, distributing the video is free, and that is a very big difference. Second, if you are able to produce a catchy video about your product or service that goes viral on the Internet, you can end up with priceless exposure that translates to millions of dollars in profit.

This is not possible with traditional broadcasting means where every minute is sold at a high price.

This “democratization” of advertising is a relatively new phenomenon and appeared with the advent of the Internet, and possibly will not be available in the future.

Certainly, the large network broadcasters are pounding their heads against the wall trying to figure out how to take control of it and harness it. Until they figure out a way to do this you can—and should—take advantage of this marketing method.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Growth, Business Management | No Comments »

Using Social Media To Market And Grow Your Business

May 30th, 2010

Social media refers to websites that allow people to congregate, interact, and communicate digitally using the Internet and web browser programs.

Social media sites include places such as MySpace, Facebook, and others, websites that have been specifically designed for members with a common interest. Social media sites are broadly defined, and this term can also include other, more simple (and subtle) places for people to communicate or collaborate.

A store website such as walmart.com can be viewed as a social media with limited membership abilities. Although members can do only a small fraction of communicating and collaborating, nonetheless, it can be important from a marketing perspective.

For example, Wal-Mart customers can leave feedback about products and experiences they have had with those products. Although this is a limited amount of communication, it is something that affects the marketing equation. Specifically, when a customer leaves a rating on a product, others will see this rating and it will thus affect prospective buyer decision-making.

Each product might have an average “customer rating,” which is a number between 1 and 5, and an area for owners of the item to leave comments.

Believe it or not, there are companies that provide the service of visiting such sites and entering positive comments about products. You can hire one of these companies and pay them per entry to visit product review websites and enter positive information about your product or service. Although this might seem like some type of fraud, it is so new that laws are not in place to regulate it and it is likely that your competitors are possibly doing it.

In fact, the same companies that enter positive information about your products will also enter negative information about your competitor’s products and services.

In any case, you should analyze your particular business and see if it can accommodate a social media site.

It is truly a brave new world. This is only one area of the Internet that affects marketing like never before in the history of business. Note that social media is broad enough to be the subject of an entire book, and for a more detailed treatment, you should search out those books.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Growth, Business Management | 1 Comment »

Using Pay Per Click Advertising To Grow Your Business

May 30th, 2010

If you have heard the phrase “Google AdWords,” you have heard something about pay-per-click advertising. AdWords is probably the most popular method of pay-per-click advertising. Microsoft adCenter and Yahoo Search Marketing are other top pay-per-click vendors.

The basic idea is that certain search words are relevant to your business, and when prospective customers enter these words into search engines, a link to your business will appear on the search results page.

The more you pay for a particular word or phrase, the better the chance you have of appearing on page one of someone’s search results. Also, whenever you do appear there, if someone (the searcher) clicks on your link, Google (or whomever you purchased the pay-per-click service from) will charge you for it (thus “pay-per-click).

You pay for each time someone clicks through to your page. If you notice on the Google search results page, several links appear at the top and side of the page, these are the pay-per-click businesses; they have paid Google to appear on page one.

The only drawback to this particular form of advertising is that you essentially have no control over the quality of the click-throughs (those prospects who click on the Google Adwords links in the Google search results). You could have a devious competitor who hires a computer programmer to design a program that would do searches automatically on Google each day and click-through to your site. You would then be charged for all of these click-throughs and they would all be worthless to your business. As a result, your competitor has used a devious tactic to disrupt your business. But when you think about this possibility, you will eventually realize that competitors can do this in other ways as well (programs that tie up your phone lines), so the vulnerability is not unique to AdWords.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Growth | No Comments »

Using Budgeting Software to Construct a Budget

May 30th, 2010

Using budgeting software is easy. You can buy software and start entering your expenses. You can enter every check you write and create the budget categories as you go. If you are unsure about a particular expense allocation, you can allocate the expenses to the “miscellaneous” category for now and when you get everything entered, you can reallocate it as you see fit. The bottom line is that you will find out exactly how much you are spending—and what you are spending it on—because every expense will be entered and there is no room for mistakes. If your expense total exceeds your income total, you will know it soon because the computer will tell you. To atone for this, you can make adjustments to your lifestyle or get a better job.

The beauty of this method is that it tends to give you a bottom line that is exact, or nearly so: it totals up all the expenses and incomes and you know the bottom lines are correct. Possibly your category allocations are not perfect, but at least you know if you have more money coming in than going out. If you owe a lot of money to a lot of places now, then you have to admit that there is a problem and it needs to be addressed. But you probably don’t understand exactly what caused it and how big the problem is. Budgeting software will get you on track to understand these things and solve these problems. After watching your credit card balances mysteriously raise up to lofty levels and never come down for years and years, you will now get to see why, and after you can see it, you can correct it.

And here is another benefit of an automated (software-based) budgeting system over the old pencil and paper method. After you enter in several months of expense and income data, you can total it by category and then divide it to get a very good estimate for each category. It is a “very good” estimate because it comes from actual real-life data: your checkbook or credit card statements. In fact, the software will do all the additions and divisions for you and tell you what you should expect to allocate to each category for each month. After years of being “in the dark” about your income and expense, you will shed some light on the situation and be able to identify and correct any problems that exist.

www.andrelarabie.com

andre@andrelarabie.com

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Using Blogging To Market and Grow your Business

May 30th, 2010

A blog is similar in function to a forum (or to a lesser degree, a marketing List), but it is less interactive for the visitors. While visitors can comment on the blog posts, they cannot make posts themselves. In a forum, the visitors can post and comment equally. They are free to create a new discussion topic and then interact with other forum members who may comment on the topic.

In a blog the functionality is more one-sided since the visitors cannot create the postings and this function is reserved for the moderator of the blog. The moderator is tasked with adding posts and managing the comments to those posts. Although the rules vary somewhat between different blogs, this is the general functionality of a blog.

To use blogging in your marketing efforts, you should create a blog and moderate it by adding interesting postings. Once you create the blog, you will be responsible for approving or disapproving the comments.

If you use search engine optimized content, you will find that your postings get hits in the search engines and you get more visitors to your blog, and to your main site if you have links from the blog content to the site. You can also direct the search engines to spider your blog after each entry is posted and your blog content will get hits immediately.

Besides generating additional Internet traffic with the content of the postings, you can also “visit” (manually or with the help of various software programs) other blogs that discuss related subjects and you can post comments in those blogs, making sure to include a backlink from your comment to your money website (your order page or landing page main business page). When someone reads the blog entry or comment and clicks on the link to your page, they are following a backlink to your site.

There are several savvy marketing companies that can assist you with this process and help you get started. You can search Google to identify and compare their services.

www.andrelarabie.com

andre@andrelarabie.com

Posted in Business Growth, Business Management | No Comments »

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