How Plumbers Can Optimize Cash Flow
One of the main reasons small businesses fail is lack of cash. And it’s possible to have no cash even if your business is making a profit. That’s because assets, like accounts receivables, are not cash until you’re able to collect what’s owed to you by your customers. Profit, in this case, will not pay your bills. This is why it’s essential to keep an eye on cash flow at your plumbing business. Doing so will ensure that the amount of cash generated by your business is sufficient to pay your immediate operating expenses, such as business loans, payroll, and rent
Here are some key steps every plumbing business owner should take in order to optimize their cash flow.
Automate Invoices
Choosing to automate your invoices is beneficial to your plumbing business because you’ll get paid faster. This can be done easily by using accounting software, which can automate time and expense tracking, recurring invoices, late payment reminders, billing, appointment scheduling and more for your plumbing services. For instance, FreshBooks, an all-in-one accounting plumbing software solution, can manage all your bookkeeping needs — everything from creating invoices to managing cash flow and tracking employee time.
Overall, the faster you receive payments, the better. Anything that can help you maintain a steady cash flow to pay your employees and cover your business expenses is something worth looking into.
Forecast Your Cash Flow
Be sure to draft a forecast of your cash flow to ensure you have enough money to pay all upcoming bills. This will allow you to plan a cash flow budget, which should include an estimate of all cash receipts and all cash expenditures that are expected to occur at your plumbing business during a specific time period. You can make these estimates on a monthly, bimonthly or quarterly basis. Your cash flow budget should show you when money is coming in, when it will go out and what money remains each month after you’ve paid your expenses and recorded your income. To help with this task, you can use a cash flow management software solution. Many of these solutions integrate with various accounting software platforms if needed.
Outsource When Needed
Outsourcing allows you to leverage outside expertise for certain workflows, such as payroll, accounting, taxes, office cleaning, marketing and more, which can benefit your plumbing business in many ways. By choosing to outsource, you can save money by converting fixed costs into a variable expense. With outsourcing, you can decrease the labor costs of full-time employees, reduce overhead and increase plumbers cash flow. Outsourcing partners are essentially subject matter experts, so they will already have the tools and know-how for specific tasks. In turn, they can reduce the learning curve and improve workflow efficiency, saving you valuable time to focus on your core business. Additionally, outsourcing can help you grow your plumbing business by freeing-up capital to secure small business funding.
Cut Operating Costs
There are several ways to reduce costs and increase cash flow without negatively affecting your core plumbing business. You may want to start with the following:
- Hire an accountant to prepare your taxes. An accountant can help you discover tax breaks and deductions to keep your business growing.
- Review your insurance policies to make sure deductibles, premiums and liability coverage are both affordable and appropriate for your current business needs.
- Further, evaluate your advertising campaigns to determine if they are effective enough to justify the cost.
- Decrease paper filing work and paper storage at your office by using free or low-cost cloud storage
Overall, to optimize your cash flow, prioritize your needs and cut costs in places where you’re not finding value.
Offer Flexible Payment Options
Flexible payment options – such as allowing clients to pay by cash, checks and credit cards – will make it easier for your customers to pay for your plumbing services. In addition to traditional payment methods, be sure to consider online payments or mobile payment options, which have become increasingly popular over recent years. Online payment options give your business an inexpensive, faster and reliable way to do business while offering your customers convenience and security.
There are also secure credit card payment processing solutions. EMSmobile, for instance, is specifically geared toward plumbers, roofers, electricians and other traveling business professionals. With this particular solution, you can accept payments right on the job.
Keep in mind, as with any payment method, there are advantages and disadvantages. However, to optimize your cash flow, you should offer your customers payment options that will work best for them. Doing so will allow you to get paid on time, every time.
Stay on Top of Accounts Receivable
It’s imperative to keep up-to-date on your customers’ accounts and inquire about unpaid invoices in order to promote a positive cash flow. Do this by reviewing all of your accounts receivable on a regular basis.
For customers paying for your plumbing services in installments, send reminders for payment when necessary. You can also try installment payment software to streamline this process. Installment payment software can facilitate your business’s ability to offer your customers the option to purchase an item over time through a set number of regular payments. You then have the choice to implement the software yourself or utilize a SaaS tool to provide installment payment capabilities. In those instances, the service will pay your business the full price of the item upfront and then remit the installment payments from the customer. This will help eliminate unnecessary strain on your cash flow.
Stall Your Supplier Payments
Delaying payments to your suppliers when you are able to can help increase your cash flow.
In fact, many U.S. companies are holding back payments to their suppliers for longer than at any point in the past decade, according to The Wall Street Journal. This allows them to keep more cash on hand that otherwise would be tied up in their businesses.
To keep a good relationship with your supplier, it’s important to be sure that you’re not breaking any agreements before you decide to delay any payments.
Request Deposits
Ask for a deposit when taking on a long-term contract to help maximize your cash flow. For instance, you can ask for a 10 percent deposit upfront, and after the job has begun, the remaining amounts can be paid per your agreement. This allows you to have some additional cash flow while waiting for, let’s say, the electrician or general contractor to finish up on items that they need to do in order to pass a plumbing rough-in inspection.
Raise Your Pricing
Raising your prices won’t necessarily affect your customer base, but it can make a big difference to your bottom line and cash flow. Play around with the numbers and try to predict what will happen if you raise your prices by 10 percent or 20 percent. Then, evaluate the market to ensure you remain competitive. You may even realize that you’re pricing your services too low to begin with.
By considering these cash flow tips, you’ll be on the right track to having the necessary cash to sustain or grow your plumbing business. Keep in mind, you can always work with your accountant to review how cash circulates through your business if you’re having trouble developing a solid system to track cash flow.
How to Grow an Electrical Business
Are you looking into how to grow your electrician business? Well, you’re at the right place. In this guide, you’ll learn the top considerations — everything from coming up with a business plan to financing options.
Here are the steps you should be taking to ensure your electrical business is set up for the growth that you envision.
Devise an Electrical Business Plan
Just like any business, an electrical business needs a solid plan. Going through the planning process allows you to focus on specific steps to get your ideas off the ground. It also provides an opportunity for you to outline short- and long-term growth objectives.
As you devise your electrical business plan, you’ll need to address and evaluate market needs, capital, overhead, competition and pricing. This information will come in handy when it’s time to set specific benchmarks. A business plan will also make managing risks easier because you’ll have a better understanding of revenue and expense projections, logistics and operational plans, and the competitive market landscape. All of this can lead to improved decision-making and provide a more realistic view of where you expect your electrical company to be in the future.
A business plan for growing an electrical business generally consists of the following components:
- Executive summary
- Market opportunity
- Marketing and sales strategy
- Operations plan
- Personnel strategy
- Financial projections
The overall purpose of this plan is to formulate an effective strategy for growth, determine your future financial needs and attract lenders and investors.
Before you get started on this important step, you should first find a mentor who’s doing what you want to accomplish and is willing to share everything you need to know about growing an electrical business. By shadowing your mentor on the job, you’ll have the opportunity to ask questions and get electrical business ideas — everything from how to finance electrical equipment to professional liability insurance.
And industry business owners agree. Tommy Mello, The Homer Service Expert, for instance, says it would have been helpful to find a mentor before starting his own garage-door business 15 years ago. Instead of spending time figuring things out on his own, he could have more quickly emulated best business practices.
“You’ve got to act like the business you want to become, and I didn’t know that back then,” says Mello, owner of A1 Garage Door Service, which reached $30 million in revenue last year.
“If I would have listened to a mentor tell me, ‘This is why you shouldn’t do this,’ or ‘This is why you should,’ it would have definitely fast-forwarded the business.”
Before creating your electrical business plan, you may also want to listen to electrician podcasts for tips and ideas, as well as read books on how to grow your electrical business.
Create a Marketing Plan
Once you determine that there’s a marketing opportunity for growing your electrical business, it’s time to develop a marketing plan or strategy. Start by creating an outline of specific marketing tactics that could help expand your customer base and build sustainable long-term growth.
Some examples of marketing tactics for an electrical business are as follows:
- Content marketing, such as search engine optimization (SEO) services for electricians to get your business visible in multiple cities
- An optimized website to showcase your brand
- Pay per click (PPC) advertising
- Google local services ads for lead generation
- Networking with other large and small businesses, especially home services businesses
- Networking with other local electricians
- Social media, video and email marketing
- Customer testimonials
- Offer free annual electrical “health” services
Decide an estimated budget for each marketing tactic that you choose to utilize, and be sure to test each strategy and measure the results. Your marketing plan should also detail how you will sell to customers, key marketing partnerships, a pricing strategy and your market positioning. Keep in mind, as your electrical business grows, you’re marketing mix will likely change. Therefore, your marketing tactics, strategy and financial ability will continue to evolve along with your business needs and goals.
Develop an Operations Plan
Your operation’s plan will explain all the specifics about how your electrical business will run. It should include actionable details on your company goals, procedures and timelines, as well as keep everyone involved accountable for meeting deadlines and on track with growing your electrical business.
Your operations plan should have the following:
- Long-term goals, key milestones and timelines
- Strategy and processes for inventory sourcing, suppliers, equipment, technology, people, capital, financing, sales, marketing and in some instances, R&D, logistics and supply chains.
- Departmental budgets, as well as employee roles and responsibilities
- Strategy for support processes, such as human resources, payroll and accounting
- Process for monitoring progress
Overall, you’ll need to think about what your electrical business will look like as it grows. Start by looking at where it is today and where you would like it to be in the future. A communication strategy along with your operations plan is also critical to ensure your team is working towards your stated goals.
Recruit and Train Competent Employees
Electrical contracting businesses belong to a sector of skilled trades that often find it difficult to attract and retain qualified employees due to high demand. However, although employee turnover risks may be greater in the electrician construction and maintenance sector than others, you should not skimp on investing time and money in training while growing your electrical business. By having a properly trained workforce, your workers will be able to learn necessary skills that allow them to improve productivity, reduce costly mistakes and build confidence. In turn, adequate training can lead to the engagement needed to increase workforce morale and reduce employee turnover.
For electrical businesses, safety training is typically a priority. From using electrical equipment to installing electrical wiring, training will help eliminate mishaps on the job that could hinder your business from growing.
Technology training is also key, especially from a competitive standpoint. Keep technology in the forefront by developing a comprehensive skills training program to help foster new technologies and innovations, which can in turn improve crew management, project handling and safety strategies.
Keep in mind, your employees will be working and interacting with your clients on a daily basis, so your electrical contracting business will only be as good as the people you hire and train. A well-trained staff can see where improvements could be made and develop client relationships to propel your business forward.
When building your recruiting program, it’s suggested to develop a comprehensive organizational chart that includes clear job descriptions and expectations for every position. Incentive pay for recruiting efforts is also recommended.
“Some people say, ‘always be closing.’ I say, ‘always be recruiting,’” says Mello, who gives employees $1,500 for referring a new hire.
“I think a lot of us, we just don’t start the business right,” he adds. “Give it such a strong foundation, there’s nowhere to grow but up.”
Set Financial Projections and Secure Financing
Growing your electrical contracting business can put a strain on your cash flow. Therefore, you’ll likely need to secure additional financing. Before shopping for loans, determine how much financing you’ll need based on your overall growth plans for each investment.
Some common options to finance your electrical business expansion are:
Bank Term Loans
Start your loan shopping by looking for bank term loans from traditional lenders, especially if you have good credit and established profitability. Bank term loans can cover most of your electrician financing needs and have the most favorable rates and terms.
SBA Loans
SBA business loans have similar rates and terms as traditional loans because they are actually provided by traditional lenders. SBA loans are partially backed by the federal government, which means some of the lender’s losses will be taken care of if you default on the loan.
Online Lenders
For quick financing, you can also look into online business lenders. Online loans are typically under $250,000 and come with shorter terms and higher interest rates than traditional bank loans. However, online loans have lower credit and cash-flow requirements, a faster funding process and give electrician companies another option to finance their business expansion when a bank loan is not available or can not get you the working capital you need quickly enough.
Equipment Leasing
Obtaining machinery or equipment is common when expanding an electrical business. A good alternative to traditional equipment loans is equipment leasing, as equipment leases are conducted relatively fast and are easier to qualify for. Terms can also be more flexible, and lease payments lower, when compared to equipment loans. The option to purchase the equipment at the completion of the lease is another benefit.
Overall, there is a loan out there for any kind of electrical business expansion need, including working capital, advertising, recruiting, payroll expenses and more. It’s just a matter of determining what type of loan will be the best fit for your particular situation.
Know Why You Want to Grow Your Electrical Business
Growing an electrical business is an important endeavor that requires quite a bit of thought. Identify your personal strengths to find out where you’re going to need help and to see if expanding your business is right for you. Determine how well you understand other areas of business, for instance, financial and management topics in electrical contracting. Then, seek the assistance of mentors in the industry to fill in the knowledge gaps.
More importantly, though, set forth a compelling case for growing your electrical business in the first place. Or as Mello says, “You’ve got to choose what’s important to you and decide what’s your ‘Why?’”
A Chicago-Based Digital Strategist Goes BOOM With App Centering Black Businesses
George Floyd’s murder was the breaking point for Chicago-based digital strategist Sequena Luckett.
“My business partner and I were already discussing another app, and we immediately shelved it,” she says. They had an idea for an app of some sorts that could bring Black people and communities together – give them a place to center their stories and economic power. Luckett didn’t know what it would look like but knew she had to make it a priority.
“We were trapped in COVID, dealing with that, and then the explosion surrounding the inequality of Black people in America – I cried for a week trying to figure this app out.”
She knew she wouldn’t feel comfortable going to protests amid the pandemic. She also knew that staying in her lane – technology and digital strategy – could be the most powerful way to drive change for the Black community.
Boom Is Born
“Driving through Chicago, I saw so many board-ups of Black-owned businesses,” she says. She knew that she could create something that shone a light on the outsized impact the pandemic and generations of racial inequality had had on the Black community. “I thought, ‘Our power is our buying power.’”
And from there, The BOOM App was born. Why BOOM? It stands for Black Owned and Operated Marketplace – a gathering point for Black business owners and consumers who were ready to vote for change with their wallets.
Luckett knew that if Black people could buy together, they could make an impact. They could keep wealth within their community instead of continually sending dollars out to non-Black-owned businesses.
Operating on a membership model, The Boom App launched on October 31, 2020. Luckett and her co-founders James Hampton, Tonya L. Johnson, and Arron Pighee all breathed a sigh of relief, knowing the app was finally out in the world but knew they had miles of work still to do ahead.
“This inequality has always been here for us, and now, I’m glad that people have taken off their blinders and can see what’s in front of them,” Luckett says. “We’re all looking to try to help in some way, and some people just don’t know how. BOOM is a way to help. It’s about taking a stand on something and learning and growing from it.”
Powered by Community
The BOOM App is powered by a membership-based model. Black-owned and operated businesses can currently join as early adopters with a lifetime membership for only $499 or via an annual membership for $249. With their membership, Luckett and her team use the app and its supporting Facebook community to promote businesses to their audience. Luckett has audacious plans to drive up group membership in the years ahead and give app members what so many Black-owned businesses lack: the digital savvy to connect with customers who are ready and waiting to buy.
One of those initiatives is The BOOM App’s exclusive Pop-Up Shops for business members. Starting February 12, Luckett’s team will feature product-based businesses within the Facebook group, giving consumers a direct link to buy directly from members. They’re doing profile-type interviews for service-based businesses that help shine a light on the business owner’s expertise.
For now, building their brand community on Facebook is the easiest way to quickly build community and easily connect business members and buyers looking to make an impact with their dollars.
“Many of the businesses impacted [by COVID] were local,” says Luckett. “Businesses that have something digital to stand on weren’t impacted as significantly.” The BOOM App instantly offers business members that missing or weaker digital component of their marketing strategy and uses social media – something people already use and trust – to quickly build meaningful connections.
Looking to the Future
As The BOOM App team looks ahead, they’re excited about the app becoming a nationwide or perhaps even global way for Black-owned businesses and consumers to connect.
“One thing I’ve learned over time is that when you take a stand on something, it grows on its own and develops its own personality,” Luckett says.
The BOOM App isn’t concerned with finding its audience. The audience already exists. And while 2020’s long-overdue rising tide of racial awareness isn’t an instant fix and comes at the cost of countless lives, Luckett and her team are ready to use The BOOM App to charge ahead as a point that connects people when so many forces are ready to divide.
Latest Riot-Related Small Business Loans and Grants
Small businesses that have already struggled with the pandemic are now experiencing the fallout of rioting and looting that has taken place across the nation. The good news is, there’s help. Here are some of the latest riot-related small business loans and grants.
And some small business encouragement to pull you through.
$2M Loans Available for Illinois Small Businesses
Illinois suffered greatly following George Floyd’s May 25th death while in Minneapolis police custody — $32 million in losses due to rioting have been recorded across the state. Everything from high-end shops to smaller, family-run businesses have been affected.
To provide relief, the SBA has stepped in with low-interest, Economic Injury Disaster Loans. Qualifying Illinois businesses and private non-profits who suffered riot-related losses between May 26th and July 30th are eligible for up to $2 million in emergency loans for operational costs, payroll, PPE and more. The loan amount will be based on the actual economic injury of the business and its financial needs, regardless of whether the business endured any property damage. The deadline to return economic injury applications is July 13, 2021.
Kenosha Small Business Grants and COVID-19 Relief
Downtown Kenosha Inc. is offering $250,000 in grants to help Kenosha businesses recover from damages caused by rioting during protests in late August. Grant funds are geared toward bridging insurance coverage gaps and providing short-term rental assistance as well as covering clean-up costs associated with damages.
“This is one step in helping people who have lost their very livelihood,” Kenosha Downtown Inc. executive director Alexandria Binanti said in a statement. “More than repairing buildings, we’re helping families who have committed to building their lives in Kenosha’s small business community. We owe all our Kenosha business families a chance to rebuild stronger.”
And for those Kenosha small businesses that are struggling with reduced revenue due to the COVID-19 pandemic, The Wisconsin Economic Development Corporation has launched a second round of “We’re All In” grants to help. The latest round of the grant program will provide $5,000 grants to 10,000 additional Wisconsin-based, for-profit businesses. Applications will open at 8 a.m. Oct. 19th and close at 11:59 p.m. Nov. 2nd.
The St. Paul Midway Fund
The St. Paul Midway Fund will benefit the community around the Allianz Field soccer stadium in St. Paul, Minneapolis for riot-related small business relief, rebuilding and relocation. Two forms of “Small Business Economic Justice grants” are available at MidwayUnited.org.
A total of more than $340,000 will be available to 21 small businesses in need of damage relief. Eligible businesses can apply for up to $15,000 to assist with paying for smoke and water cleanup, glass replacement, replacement of stolen goods, lost inventory and any other damages caused by riots, looting and unrest.
An additional $500,000 will aid at least 10 businesses through a “Rebuild and Relocation” program. Qualifying businesses can apply for up to $50,000 to assist in rebuilding efforts, ranging from total fire loss to help with relocation costs due to loss of lease or eviction. Applications will be accepted through Dec. 20th, or until funds run out.
And There’s Hope…
Despite everything that’s been happening, small business owners are finding resilience. Daniel Johnson, a small business owner in Minneapolis, is a good example of this. Johnson’s flagship clothing store, House of Hoodies, burned to the ground during the riots following George Floyd’s death. However, instead of feeling sad for the business loss, he decided to rebuild by opening a new store in Rochester.
“It just lit a fire in me to just keep pushing and we have the younger generation that just watches us. We just wanted to be an inspiration to everyone and let them know and show resilience and if you fall down you have to get back up.” Johnson said.
This is just one of the many small businesses finding strength during this time, and it starts with having a positive outlook to move forward.
If you’re not in one of the mentioned areas, be sure to check within your community for any local riot-related small business loans and grants that can help you start to recover.
Forget the Feds! Take advantage of Regional Support for Your Business
If your business is looking for financing, especially during these times, there are various places you can turn. While many small business owners applied for Federal grants and loans, in the form of the Paycheck Protection Program (PPP) and the EIDL, some of these financing opportunities have come and gone. But have you considered regional support for your business?
Today, many localities across the country have all sorts of support mechanisms and are ready to help small business owners looking for COVID-19 relief. All you need to do is know where to look to take advantage of them.
Here’s where you can start looking.
Small Business Administration Regional Offices
The SBA doesn’t just operate out of Washington, D.C., all across the country, you’ll find SBA District and Regional Offices set up to help local small businesses in that area.
Within these local offices, the SBA offers programs such as SCORE for free and low cost mentoring and counseling, Women’s and Veteran’s Business Centers to help small business owners create business plans, networking, and marketing help.
This summer, the SBA also introduced the Community Advantage Recovery Loan (CARL) Program, which provides funding for small business owners in underserved markets.
U.S. Chamber of Commerce
Virtually every community around the country has a branch of the Chamber of Commerce (CoC). It can be an excellent source for small business owners to network and get in touch with local funding programs.
Many local Chambers of Commerce are also offering free help and guidance during this time. Search your state or local CoC website. There, you might find a list of local member brands providing grants, training and other free services to small business owners in the region.
State, County and City Government
Many states and county governments are also offering small business loans and grants for COVID-19 relief. To find these, search for your local city, county and state’s economic development offices and small business programs, which tend to administer these programs.
Statewide programs vary in size and scale. However, many offer smaller grants and funding to businesses serving in front line work or operating culturally essential institution. These new options are in addition to more traditional options. Many of these loans focus on keeping struggling small businesses afloat, offering funding to keep employees on the payroll to prevent staff reductions and cover the costs of sick workers.
Rents are also a continuing concern for small business owners. So, check your state, local, and city governments to see if they have enacted rent moratoriums or offer rent assistance.
Several state and county governments are also facilitating personal protective equipment (PPE) to small business owners for employees at no additional cost.
Business Improvement District Programs
Business Improvement Districts (BID) are geographical areas that are overseen by a non-profit organization that helps maintain, improve and promote the area.
An essential part of the growth and improvement of any BID is through its small local businesses. Many BIDs have economic development programs that offer loan and grant programs to qualifying small business owners, especially those who might be underserved in the community, such as women and people of color.
Private Local Groups and Entrepreneurs
Don’t forget to look to local groups and entrepreneurs as well. Many of these groups and individuals offer grants, loans and even microloans to qualifying local business owners in the area.
There are already thousands of groups and non-profit organizations that work regionally providing small business and SBA loans during so-called “normal” times. They are working to continue their efforts during COVID-19 by expanding current loan options and offering new loans and grants.
You Have Options
Even though your business might be struggling under the weight of everything happening in the world right now, know that there are funding options out there for you.
Once you’ve gone through your opportunities at the Federal level, look look a little closer to home and consider taking advantage of regional support for your business. More often than not, you’ll find people and other businesses who want to help you get through this tough time.
Life-Saving Measures for Small Businesses on the Brink of Closure
No matter what part of the country you’re in, you have small business-owning neighbors struggling to keep the lights on. With erratic reopening plans, caseloads that still won’t decline, and the need for social distancing until there’s a widely-available vaccine, countless businesses have been hit hard. But what can be done? Are there any life-saving measures for small businesses on the brink of closure?
If you’re a business owner in this situation, you could find enough relief to keep your doors open and critical staff employed using one (or all) of the options below.
Review Your Expenses
While you might have already done this back in March, it might be time to review your expenses again.
Instead of eyeing luxury expenses this time around, put an eye toward ways to discontinue some low-margin services and supplies until traffic gets back to pre-pandemic levels again. This could mean paring-down your menu, hiring a delivery person instead of subcontracting to meal delivery services, liquidating inventory at a deep discount to reduce warehouse space, or even limiting workdays to the most profitable days and hours.
When evaluating expenses to cut, don’t think of these expenses as permanently on the chopping block. Instead, you can bring them back and build back up when life and revenue pick up speed once again.
Get Creative With Payment Arrangements
If you’re strapped for cash, your vendors may be as well. Reach out to your accounts payable and start a conversation about mutually-beneficial payment arrangements.
For example, if you can promise $X toward your invoice every two weeks, that’s better for your vendor than zero dollars. Your vendor gets a predictable cash flow, and you get a reasonable payment arrangement.
If you and a vendor do mutual business (they invoice you and you invoice them), set up a call for an invoice review. Explore creative options like applying their invoice for $1000 to your invoice for $800. You’ll still owe them $200, but it’s a lot better than $1000. This is a simple solution that often slips through the cracks because your AP and AR systems might not communicate with one another.
Explore SBA Loan Options
While the Paycheck Protection Program is no longer offered, there are three other SBA loan options you can explore for a much-needed cash infusion:
- Economic Injury Disaster Loan (EIDL): If you’re experiencing a loss of revenue due to COVID-19, you could be eligible. Terms are 3.75% interest (fixed) for up to 30 years with no pre-payment penalty. You can even defer payments for up to one year (but interest will still accrue).
- SBA Express Bridge Loan: If you have an existing relationship with an SBA lender, you may qualify for a loan up to $25,000. These loans can be regular term loans or bridge the gap between today and approval for your EIDL Loan. You just need to reach out to your existing SBA lender to inquire.
- SBA Debt Relief: If you have an existing SBA loan and have trouble making payments due to COVID-related financial hardship, this program can bring you relief. Eligible loans include “7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020” per the SBA. If you qualify, the SBA will pay any principal, interest, and fees on your loan for six months.
Have a Candid Conversation with Your Bank
Finally, it could pay to sit down and have a candid conversation with your bank. Your bank doesn’t want to lose your business or see you default on lines of credit or other loans. You could find they’re willing to work with you if they know your full financial picture.
There aren’t any guarantees that your bank could come through with funds or reprieves from payments due. But, if you don’t start the conversation, you’ll never know what’s possible.
Have any other tips or advice on life-saving measures for small businesses? Let us know.
Banding Together: How Businesses are Joining Forces in the Age of COVID-19
While some businesses have re-imagined their revenue models due to shelter-in-place orders and unpredictable reopening rules, other businesses are joining forces to revamp their revenue streams by pursuing partnerships.
Sometimes, the boost your business needs is right in your backyard. It just takes some creative thinking to identify, explore, and establish partnerships that can benefit both sides of the relationship.
Opening a Window
Filip Duz’s company, Giraffe Window Cleaners, services roughly 1900 square miles in the Dallas-Fort Worth metroplex. When mandatory closures and COVID-related business restrictions set in, he knew he’d have to find revenue sources beyond his regular income stream.
Instead of working directly with homeowners as he typically has, Duz formed an alliance with several real estate agents.
“From my past dealings with real estate agents and home stagers, I knew that real estate agents place a big focus on making a home look great before selling,” he says. “Naturally, clean windows are a part of making a home look presentable for selling, so a partnership made sense to me.”
To get his partnerships started, Duz located a list of the top 1000 realtors in his metro area. From there, he sent text messages and made cold calls, introducing himself, and asking if the agents needed help cleaning the windows on homes their brokerages had listed for sale.
The plan worked gangbusters for Duz and his partner agents.
“When a realtor needs to prepare a home for a showing, they reach out to us to schedule a window cleaning,” he says. “This benefits us because it provides a steady flow of work for our crews. The real estate agency benefits from having a reliable partner that provides consistent, high-quality window cleaning at a moment’s notice.”
Doubling Down on a One-Stop-Shop
As a gutter and window cleaning service in Austin, Texas, Full Color Cleaners owner Benjamin Nguyen knew his team always had an eye for identifying their customers’ needs.
“When we perform any one of our exterior cleaning services, we’d usually discover things that are broken or damaged and needs a specialist to come fix it,” says Nguyen. “We’d only ever pointed it out to the customer, and they would go out and search for a specialist themselves unless we had family or friends specializing in those services.”
But this year was unexpected with the pandemic and many businesses in the Austin area struggling. Instead of just pointing out things that might need to be fixed, Nguyen and his team started to call service providers they had relationships with to help their clients fix what needed fixing.
Nguyen started his outreach for potential partners with business owners he’d networked with in the past. Knowing they needed to add multiple services to their partnerships, Nguyen reached out to fellow local Austin-area businesses, including those offering roofing, pest control, landscaping, and plumbing.
“The outreach process is quite fun because small business owners are always thrilled and happy to talk about their business,” he says. “That really helped us build a good relationship with them from the start.”
Now, Nguyen’s business – and those he partners with – all get a referral fee when they refer customers. His customers get the satisfaction of knowing Nguyen’s team is bringing solutions to their problems. Full Color Cleaners has built up a robust set of local business alliances that will continue to power a new revenue stream even through reopening and beyond.
“It comes full circle, everyone helping out each other,” says Nguyen.
Planting Seeds for Growth
Farmers have been hit particularly hard, first during the trade war of 2019, and now the pandemic of 2020. Farm Lease Pro, an online marketplace where farmers and landowners connect to lease farmland, recognized the need their customers had to find ways to bring in revenue when COVID caused slowdowns in the supply chain.
“Each day, many older farmers are retiring, and trying to figure out how to monetize the equity they have built up in their land over decades,” says Madison Woodward, founder of Farm Lease Pro. “The property taxes are high, and the maintenance bills keep coming while income is down.”
Woodward was actively looking for ways Farm Lease Pro could add value to their cash-strapped clients during these difficult times. He reached out to a similar marketplace, HLRBO (Hunting Lease Rental By Owner), to explore a partnership idea. Both farm and hunting leases are an avenue for landowners to generate income off their land while providing hunters and farmers the ability to use land that they might not be able to purchase outright.
“Farm Lease Pro has a large user base of landowners making money off of farm leases, while HLRBO has many landowners who are earning revenue from hunting leases,” says Woodward. “We joined together to provide landowners with another opportunity to monetize their land without selling it, while also helping farmers and hunters find the land they are looking for.”
Now, both Farm Lease Pro and HLRBO have an uptick in business, and both farmers and landowners are enjoying revenue from previously untapped revenue streams.
Whatever your line of work, there’s always a creative partnership waiting to help you and a potential partner grow your business. It doesn’t take a challenging economy to see that a strategic plan for businesses joining together can help every member of an alliance reap new rewards.
Rethinking Revenue Models During Re-Opening and Beyond
As businesses look toward the third quarter of the year, many are still looking for ways to overcome the unexpected pains that COVID-19 has inflicted on their revenue models. With states and localities having widely varying re-opening plans, it’s only natural for businesses in every sector to be on the lookout for new ways to generate revenue.
To help your business find inspiration for its own COVID-coping and re-opening plans, the businesses below share how they’ve reimagined their revenue models over the past two quarters.
Adding Humanity to Membership Models
Before COVID-19, Scott Beaver, Ph.D. (affectionately known as Dr. Scott) and his company Easy Hard Science operated on a fee-per-course revenue model for its pre-recorded and live-by-chat video classes. With kids out of school for an indefinite time and parents’ needs to keep their kids learning, Beaver switched his business over to a membership model.
Now offering unlimited courses for a simple monthly fee, Beaver can overcome the trend he sees with how other companies are leveraging the internet during the COVID crises.
“Families are still stuck at home, and they are being offered all sorts of digital and mail order products,” says Beaver. “These products are safe, yet perhaps less human.” Easy Hard Science provides what Beaver refers to as “good old ‘service with a smile’” and believes that his commitment to personal service is why families want to join and then stay in his membership program. He experienced a 300% increase in revenue in just six weeks after launching his membership model.
“We spend hours and hours talking with parents and having learners in live online classes and suggest you do the same,” he says. “Don’t expect robots to keep your customers happy. The world wants and needs more humanity at this moment, even if it’s delivered in a digital format.”
Investing in Micro-Influencers
NuLeaf Naturals had a healthy revenue stream built up through retailers, which came to a halt once states and cities imposed shutdowns. That forced NuLeaf to rethink its revenue model and focus on one that would help it become more self-reliant in all economies.
No matter the circumstance, NuLeaf’s Vice President of Operations Ian Kelly knew that people still need to buy things, and eCommerce is the best bet in terms of safety. He helped navigate NuLeaf to a new revenue solution with micro-influencers through Instagram – online personalities with 10,000 followers or less.
“Micro-influencers are great for growth hacking social media without shelling out too much money,” says Kelly. “Investing in five micro-influencers with 10,000 followers is better than targeting one influencer with 100,000 followers. If you can find micro-influencers who are already fans of your products, it’s a great catch.”
Through NuLeaf’s micro-influencer campaigns, they’ve experienced a significant increase in engagement – especially direct messages from potential customers asking questions about their products. NuLeaf can now engage with new customers on a one-on-one level and start meaningful conversations that address a potential customer’s specific concerns. As a result, they’ve seen a rise in sales and plan to carry the micro-influencer marketing strategy alongside retailer re-openings and beyond.
Envisioning New Verticals
Credit: UCplaces.com
When you wanted to create or take a virtual tour – through a city, a haunted house, a historical monument – UCPlaces was the place you went to. Their app took you inside for a look at destinations far and wide, yet when COVID came along, tourism ground to a halt. Tourism was one of the main reasons people tuned into UCPlaces tours, for the self-guided experiences in new cities and countries.
“Since tourism took such a huge downturn, we were forced to adopt a new business model out of necessity,” says Mary Rutt, the company’s Director of Business Development.
As the company started rethinking revenue models, one COVID-related trend stood out.
“With folks moving out of crowded cities and rural real estate markets becoming flooded, we felt that the UCPlaces tour creation platform could be a great tool to help real estate agents stand out,” says Rutt. The only challenge was figuring out a way to create tours that real estate agents and their clients found beneficial. UCPlaces did their version of market research.
“We started by presenting the platform to a few local agents for their feedback. Our goal was to determine if providing tours to potential buyers would be something they’d find exciting,” she says. “The reaction was overwhelmingly enthusiastic, and we knew this was a revenue stream we had to explore.”
Two months after having the idea, UCPlaces now targets real estate agents to create “where to live” tours for their potential buyers to learn about a new location and not have to be in the car with their agent.
“UCPlaces users can pop in their earbuds or connect to their car’s Bluetooth speakers and take one of our pre-recorded, GPS-led walking, hiking, cycling, or driving tours on their own schedule without needing to gather in groups,” says Rutt. “It’s perfect for social distancing.”
As you move into re-opening, the rethinking revenue models, such as the revamped models mentioned above, can help you identify new opportunities to keep the cash flowing in any market conditions. With a bit of creative thinking, you could discover that your next enduring revenue stream is easy to implement and can provide value for years to come.
What is in a Business Credit Report?
Credit bureaus track business credit activity through your EIN (employee identification number); or, if you have one, your D.U.N.S. number. Business credit reporting agency, Dun & Bradstreet, issues this identification number, and it’s free for businesses that have to register with the federal government to receive contracts or grants.1
This information helps build your credit report, which contains details on reported past and current borrowing arrangements. These include loans, credit lines, credit cards, and mortgages. The report may also include information on judgments, liens, and any accounts that may have gone to collections agencies. Your business credit report will also include a credit score, which generally represents how the issuing agency views your business’ ability to make payments on time and in full.2
How Lenders Use a Business Credit Report
Lenders use the information in your business credit report to help inform financing decisions for credit applications from businesses. They may take into account your business credit score, payment history, length of credit history, and any derogatory or negative information.
Why You Should Request Yours
It’s important to see the information on your business credit report to ensure that it is accurate. If you find that it is not, contact the reporting companies to have it corrected. Incorrect information could negatively impact your next loan application.
Seeing what lenders will see on your report can also give you the opportunity to prepare to explain any unusual or less-than-desirable information on your business credit report. And it also gives you an idea of areas for improvement, such as paying bills on time or keeping credit card balances within limit.
7 Business Credit Report Providers
If you’re curious about what’s in your business credit report, check out these seven providers. We’ve included five that offer reports for free.
#1. Experian
One of the better known personal credit bureaus in North America, Experian, also offers paid business credit reporting services. Experian offers a one-time business report which includes a credit summary report, credit score, and business summary for one business. Or, you can choose a monthly or annual service with the ability to check your own business credit reporting and business information. Through the service, you can also check details on other businesses (such as your existing or potential customers).
#2. Equifax
Operating across the globe, Equifax offers an entire suite of business credit reporting services for businesses large and small. While they don’t currently offer a free report checking service, their Business Risk Monitor for Small Business Service provides Public Record, Credit, and Risk Score email alerts to notify customers of activities and inquiries impacting their business credit in these areas.
#3. Dun & Bradstreet
The CreditSignal site operated by business credit bureau giant, Dun & Bradstreet, lets you monitor changes to your Dun & Bradstreet business scores and ratings — for free. It also notifies you either through email notifications, or via an app, when someone else requests access to your business score. However, take note — to get your actual business credit score you’ll need a paid subscription.
#4. Nav
Credit monitoring system, Nav, gives both individuals and businesses access to free credit summaries. Check your business report summaries from Experian and Dun & Bradstreet — you don’t even need to provide a credit card number to do so. Yet, bear in mind that these are only summaries. If you want access to more detailed business credit information, you’ll need the paid service.
#5. Credit.net
Although free access to your report through the Credit.net website is limited to a seven-day free trial, it’s a good place to start if you want to get a look at your current business credit situation, plus check credit summaries on others. During this time you’ll have access to seven reports. With the extra reports, you may want to consider checking credit reports on customers looking for credit terms with your own business.
#6. CreditSafe
Here’s another online option that lets you access a free report before committing to a longer-term paid arrangement. With a customized CreditSafe free trial, you’ll have access to credit scores and limits, company financials, adverse credit insights and more for not only your own business, but other businesses as well.
#7. Tillful
Tillful is on a mission to help small businesses reach their full potential by giving them free access to their credit score so owners know where they stand when it’s time to get business financing. With the Tillfull business credit reporting ecosystem, you can access your credit score and learn how it’s measured. You can also connect as many bank and business credit accounts that you want to get a holistic view of business credit. You can access this system as often as you’d like and you can even sign up for email monitoring alerts to let you know in real-time when a change has been made.