13
Sep

How to Write a Great ‘About’ Section for Your Company’s Website

How to Write a Great ‘About’ Section for Your Company’s Website

Your company’s website is an important digital asset that allows you to be discovered and connect with customers more easily.

One of the most important sections of your website is the About page, which introduces your business to the public. This page should offer insight to consumers on who you are and what you do, and provide a first impression that will welcome new customers.

Whether you’re writing this important webpage from scratch or updating your existing one, experts shared their tips on how to set up an effective About page.

You want to attract customers by telling them why you’re the right choice, and relating to them on both a personal and professional level.

“Like every page on your website, the About page has one single goal: to convert visitors to leads,” said Tim Cameron-Kitchen, founder of Exposure Ninja digital marketing company. “Use your story as a chance to explain to visitors why they should buy from you rather than your competitors.”

You don’t want to overdo it on the self-promotion, though: Rather than rave about how great your company is and why you’re the best in the market, allow your experience and success to speak for you.

“Promoting yourself comes through showing off your passion and values,” said Cameron-Kitchen. “Think about what is most important to you and your business, and what gets you excited about your market. Don’t be afraid to be honest and let your passion show.”

Your tone has a major impact on the impression you give consumers. While you don’t want to come off as unprofessional, you should write in a conversational tone that welcomes readers. Remember, your consumers are human, and you don’t want to speak to them like they’re robots who understand industry jargon.

“Try not to sound like a wise old orator – this can come across as boring and overly corporate,” said Cameron-Kitchen. “Use the tone that you would use if you were telling a potential customer about your company in a face-to-face interaction.”

“If you’re offering a service that people will pay for, you have to come across as professional and trustworthy,” added Kamran Mirshahi, founder of PPI claims management company Canary Claims. “Don’t use slang or colloquial language. You have to be understood by everybody.”

You don’t need an over-the-top introduction to lure in customers. Cover the basics in the most efficient way you see fit.

“The most important thing is to include what you do or offer,” said Mirshahi. “Try and explain it as swiftly and simply as possible, so if people are quickly scanning your page, they know exactly what you do.”

Don’t feel the need to cover everything in your “about” page. “It’s likely that people will have further questions, but these can be answered in an FAQ page or elsewhere,” said Mirshahi.

Ask yourself what people want to know right away, and mention the most important things at the top of the page, he added.

Hearing what previous customers have to say about your company is a great way to recruit new ones. It offers an outside voice that assures people they are choosing the right business to work with.

Mirshahi explained that “having testimonials is crucial, as people need this to know you are a trustworthy company.”

In a highly competitive business world, having supporters offer their praise might just be the extra boost you need.

13
Sep

From CNN to CEO: How I Built a Career by Helping Others Build Theirs

From CNN to CEO: How I Built a Career by Helping Others Build Theirs

Credit: The Independent Grid

Planes drop out of the sky. It happens.

When you work in the business of developing and delivering the 24-hour news cycle, everything happens all of the time.

Santa water skis on lakes across the country each July and cameras are there to cover it. Carnival rides collapse, politicians give pressers, babies die and are revived by paramedics, human remains are found, and populations of people gather in protest or solidarity. All the while, someone like me, a former CNN producer, is taking notes from a wire service, organizing footage in servers, lining it up in a show’s rundown, preparing scripts for anchors and pre-interviewing guests to understand how they might answer the questions when on air.

I was a minor player at a major network where I started climbing the ranks in my role as a video-journalist. Four years later, I was writing, producing and interacting with cable network stars like Connie Chung, Anderson Cooper and Paula Zahn. The climb was precipitous for me. My first experience in a television studio was at CNN in 2000 – the year of the Second Intifada; the year of the election; the year of so much news.

I embraced my role in a career where success was measured by my ability to withstand and react. The very nature of the news industry requires a constitution not much different than that of a wealth manager: Not to necessarily expect the unexpected, but rather to prepare to be unsettled daily, and react to that uncertainty calmly and armed with a variety of solutions.

In reviewing a script I had written for Anderson Cooper one morning, he stopped and asked me what I wanted to be when I grew up. I had no answer.

The answer was certainly not a financial advisor or compliance officer. But a year later, I was back in Central Pennsylvania joining the family business and cutting my teeth on orphan life insurance policies at Prudential.

Twelve years into the business, I had already shuttled through quite a bit of education in the field, including a Master’s Degree in Financial Services and the Certified Financial Planner Certification. I had begun building what was a sizeable book of business for myself.

The next transition was an easy one, a common-sense step borne of the challenges of starting in this business from scratch. I had always loved building things – never anything mechanical, but rather careers.

Building a career in television news with no experience was the challenge that once suited me. But, building a career in wealth management continues to excite me and fulfills me in a way that television never did. I can actually experience the impact of my work with a client, whereas broadcast television separated me from the audience I served. Over a year and a half ago, with the help of my father, Frank Conte, and a longtime colleague and friend, Trent Gain, we got into the business of helping others build their own careers.

In running our own advisory firm, Conte Wealth Advisors, Frank and I had grown to learn that those advisors who had already crafted a brand of their own might prefer to maintain it while benefiting from the services that CWA offered. The creation of a firm to serve CWA and other brands like it made perfect sense. Our company, The Independent Grid, was our chance to help give other advisors, both experienced and nascent, the tools to create and grow careers of their own in an industry that is difficult to break in to.

Frank and I both agreed that given our experience as advisors receiving services from compliance officers and broker/dealers over the years, we were surely positioned to serve advisors like us with amenities that we had always looked for in one service provider, but had never found.

With 12 years of experience as an advisor at the time, I thought we might be able to create a home for advisors, a kit filled with every tool I could have used to grow my own advisory practice much more quickly and efficiently from day one in the industry. What advisor wouldn’t want a marketing department at their fingertips with a library of pre-produced campaigns? What newbie to the independent space wouldn’t love to tap into a network of experienced advisors who can help guide them to strategies, money managers, or planning techniques as needed?

A career in television may appear flashy, but for me, it was suffocating. The Independent Grid is my opportunity to liberate others in a challenging career and make their lives better. Having worked as an employee for years, I was able to liberate myself by finding my own niche to explore as an entrepreneur.

The key to starting your own business is finding your niche and using your past experience as a tool to make that niche tangible. Those years at CNN honing my writing chops, crafting my own sense about the world through direct exposure to international and domestic events, and refining my communication skills working in a high-stress environment all have been worthwhile skills to have.

About the author: Anthony M. Conte, MSFS, CFP, is the chief executive officer of The Independent Grid, a turn-key business platform dedicated to helping financial advisors gain independence without having to go at it alone. He is also managing partner at Conte Wealth Advisors, an independent financial services firm.

13
Sep

Is Direct Sales the Right Career Path for You?

Is Direct Sales the Right Career Path for You?

Direct sales or independent sales consulting can be a lucrative career option for motivated entrepreneurs.

Credit: one photo/Shutterstock

If you’re looking for a way to earn money on the side of your current job, or you want to work independently full time while setting your own schedule, a career in direct sales might be a good idea for you. The direct sales model involves taking orders for and distributing products or services from a parent company. You might do this by going door to door, hosting in-person or virtual parties, or building a client list through other means. Popular examples of direct sales companies include Avon, LuLaRoe, Arbonne, Nu Skin, doTerra, and Stella & Dot.

A direct sales career might be best if you want to have some independence and flexibility, or to work from home. According to Connie Tang, president and CEO of Princess House, women and millennials are especially active in this industry.

Tang told Business News Daily that anyone who is coachable, values their independence and is dedicated can succeed in direct sales. People who have a passion for helping others succeed will find the most success in direct sales, since everyone benefits from one person’s success in this industry, she said.

“All direct selling skills can be gained by being self-motivated, disciplined and determined,” Tang added. “It’s all about making a plan, and working your plan to completion. Staying organized, setting goals and developing a plan for achieving personal sales objectives are the keys to success.”

If you’ve decided that a career in direct sales will work for you, it’s important that you choose to work with a reputable company that is as invested in your success as you are. You should also be interested in the product or service you’re selling, and you should be careful not to get caught up in a pyramid scheme.

Jeff Olson, founder and CEO of Nerium International, pointed out that direct sales is a business of duplication. In other words, companies should provide messages that direct salespeople can duplicate. If you’re interested in direct sales, you should try to find a company that supports its representatives and builds confidence and success through its training programs and other support avenues.

“[Nerium International] executes our communication platform through conference calls, email and text blasts, so a whole team can get the same information at the same time,” Olson said. “Our training system is called Nerium Rhythm. We train and reinforce this system and [its] tools at regional meetings and leadership events through our Nerium Leadership Academy.”

You should also look into a company’s track record, Tang said.

“They must assess a company by … how long it’s been in business,” Tang said. “A healthy direct selling company also has a large number of dedicated representatives who collaborate together to build their individual businesses.”

Finally, look at the company’s practices to make sure you’re not signing up for a pyramid scheme. Multilevel marketing (MLM) businesses get a bad rap because they’re often confused for pyramid schemes. However, many MLM businesses are safe and reputable. One key factor is the focus of the company. If the focus is to build distributors instead of customers, there may be cause for concern.

Consider the cost to begin your business as a distributor, and whether or not the company will buy back unsold inventory. If a company requires you to purchase a large amount of inventory to distribute upfront and makes you absorb the cost of unsold items, that might be indicative of a pyramid scheme.

There are many ways to build a successful career in direct sales. As you’ve probably noticed on your own social feeds, this industry has a large presence on social platforms like Facebook, Instagram, Twitter and LinkedIn.

“Social media is a huge component for direct sales,” Olson said. “Ninety-four percent of digital purchases are influenced by family and friends’ recommendations. Therefore, social media is a natural way for direct sellers to recommend a product they love to their networks.”

Patrick Crosson, senior vice president and managing director at Hyperwallet, told Business News Daily it’s important to be active on the social media platforms that most closely match your goals. Different social platforms are better for different audiences and post types, he said, so knowing your goals can help you choose the best social media site to promote your business.

“Having a presence on a social networking site without being active is a mistake,” Crosson said. “Users that try to engage with the direct selling company online may find that their replies come slowly – if at all – and could develop a negative perception of the brand. Rather than create corporate accounts for every social platform, organizations should look carefully at which makes sense for their purposes and commit to them.”

Crosson noted that Facebook is the most popular platform for driving online sales, citing the Direct Selling Association’s (DSA) annual Web Presence and Technology Systems Survey, “whereas Twitter is preferred for fast information sharing, LinkedIn for recruitment, Instagram for brand awareness and so on,” he said.

It’s also important to engage your audience on social media and not just push sales via those channels.

“Direct selling companies can market their products and highlight their benefits through social media, but organizations that bring nothing else to the table are missing the point,” Crosson said.

13
Sep

How My Childhood Adventures Fueled My Passion for a Travel Career

How My Childhood Adventures Fueled My Passion for a Travel Career

Credit: Tracey Codd

My childhood was nontraditional to say the least. It seems my entire life was spent moving from one location to another. By the time I graduated college, I had attended over 40 different schools over the course of my life.

I was born in Staten Island, New York and resided there until I was six years old. I spent many weekends with my paternal grandparents who would share stories of their parent’s adventure arriving in the United States by ship from Ireland. I was amazed at the thought.

The adventure of travel began when my mother told my sister we were moving west – we packed the car in the middle of the night and began our adventure. My mother had a gypsy soul and was raising two toddlers on her own at the age of 21, so it wasn’t common for us to stay in one location for very long, and this continued throughout my childhood.

On my 17th birthday, my mother said she was ready for her next big adventure. However, I decided to forgo this one and start my own path. I found a roommate, lived on my own and began to pursue a career as a flight attendant.

While the on-again off-again moving was exhausting, my passion for travel ran deep. I was ready to turn all my childhood adventures into a career.

While in school, I was offered a job in Osaka, Japan by American Airlines, but I found myself reluctant to take the opportunity. I decided to clear my head and vacation with some friends who had broken into the travel sector. Little did I know, this would be my first of many cruises.

On the cruise, I met a businessman who owned a travel agency. After talking further, he told me to call him to discuss a job – so I did just that.

I spent over a decade working for the agency until they sold to a large corporation and closed. I made the transition to entrepreneurship shortly after when I obtained my sport pilot license and opened my own travel agency. I partnered with a friend, and a few years later, he heard of the Expedia CruiseShipCenters franchise opportunity and was determined to meet with their executives to convert our agency. We flew to Vancouver for a meeting.

The hook for me was incredibly simple. The Expedia CruiseShipCenters president, Matthew Eichhorst, arrived a few minutes late. When he walked in, he started apologizing for his tardiness, explaining that he had to take his kids to the dentist. For me, this made him incredibly personal and emphasized how the brand was a family company and not just another large corporation.

By the end of the meeting, I was completely on board and ready to sign on.

Today, I am the proud mother of three children and even met my fiancé Dan through Expedia CruiseShipCenters. We own and operate three locations and love to travel the globe together.

I am able to see the various aspects of cruises from both a franchise owner and a family standpoint, which consistently proves travel appeals to everyone. It’s my vision to open more Expedia CruiseShipCenters in the coming years.

My heart is and always has been passionate for travel; I don’t envision a day that will ever change.

About the author: Tracey Codd is the owner of three Expedia CruiseShipCenters franchises across Florida. Embracing her passion for adventure, Codd sought out jobs in the travel industry, keeping her love for travel afloat. Her passion led her to become a sport pilot, dabbling in the cruise industry and finally becoming an owner of Expedia CruiseShipCenters.

Edited for brevity and clarity by Sammi Caramela.

13
Sep

Want to Be a Part-Time Franchisee? What You Need to Know

Want to Be a Part-Time Franchisee? What You Need to Know

Credit: Vasin Lee/Shutterstock

Entrepreneurship is enticing for many people, but not everyone wants to start from the ground up or has an idea to create a business from scratch. Joining a franchise and running a branch of someone else’s business can be a great step through the entrepreneurial door without the hassle and stress of starting at the very beginning.

However, full-time franchising can be a lot of work and take a lot of time, which is why more franchisees are signing on with parent companies offering part-time franchising opportunities. Two companies that currently offer part-time franchise opportunities are ABC Do-Re-ME!, a music education program for children, and Maui Wowi, a company that sells Hawaiian coffees and healthy fruit smoothies. Ellie Greenberg, who founded ABC Do-Re-ME! in 2009, began franchising her company to give mothers like herself the opportunity to make extra money while still having plenty of time to spend with their children.

Maui Wowi has been offering franchise opportunities for 20 of the 35 years it has been in business, and currently has over 200 full- and part-time franchisees. Mike Weinberger, a former franchising attorney and CEO of Maui Wowi, said that many of the company’s part-time franchisees begin with the goal of making their franchise a full-time job. Regardless of your schedule, it’s important to remember that franchise ownership is a big commitment.

“Even if you’re part-time, don’t take it lightly,” Weinberger advised. “Do your due diligence, and don’t make any decisions until you’ve gotten all the information you can.”

13
Sep

6 Things to Do Before Opening an Etsy Shop

6 Things to Do Before Opening an Etsy Shop

Credit: Evan Lorne/Shutterstock

Running an Etsy shop is a popular way to sell products and earn income. For talented artists and crafty individuals, selling your goods in a third-party marketplace is a great way to pursue your passion and profit from it.

But before taking the next step, and after reading Etsy’s seller handbook, you should familiarize yourself with some tips on opening a shop. Business News Daily asked Etsy shop owners to share their advice for opening a shop the right way. Here are a few things to keep in mind when starting your Etsy business.

While you may want to use the first shop name that pops into your head, you should give it serious consideration before deciding on a moniker.

“Be careful not to pick a name that limits your shop and what you offer,” said Kelly Phillips, owner of Wave of Life. “Avoid using terms in your shop name such as ‘jewelry’ or ‘crochet,’ unless you are absolutely certain that is all you ever intend to sell.”

Names often exude the first impression to buyers, so you want to ensure yours represents your company efficiently and serves its purpose.

“A more fanciful name that is unique to your brand will allow you to expand and grow as trends change,” Phillips said. “Make sure [another] shop is not using a name that is too close to the one you are contemplating, to avoid losing customers to the competition.”

Finances are always a major concern when starting a business – including if your new venture is an Etsy shop. Research the costs of your endeavor before embarking to avoid surprises.

“You should have an idea of what your business model will require [concerning] reporting for income taxes, and you should find out what your state requires of businesses with regards to business licenses and sales tax collection,” said Cathy Stein, owner of EDCCollective. “Getting these things straight before starting a shop on Etsy can help ensure you will not incur a penalty for failure to collect sales tax, for example.”

Additionally, Shelley Burton, owner of Squeaky Sailor Soap, said to calculate how much your product costs to make and how much time it takes to make it.

“The amount everyone else on Etsy is charging for a product similar to yours doesn’t matter if you can’t turn a profit at that price,” she said. “It’s really important to know what your profit margins will be, especially if you are approached by a shop that wants to wholesale with you, because standard wholesale purchasing price is 50 percent of retail.”

Mapping out your expenses will help prepare you for any issues. Create a budget so you’re aware of how much you’re earning versus how much you’re spending, including processes like production, packaging, shipping and more.

“Make sure you think through the cost of shipping,” said Roy Barker, owner of The Clock Monkey. “This includes your time to and from a mail center, the packaging, and the cost of transportation. It is easy to get caught short in shipping.”

Anyone can pack their products in a cardboard box and ship them to a customer. Stand out from other sellers by creating a unique experience for your buyers.

“Find a way to make your packages fun to receive in a way that reflects your business,” said Joanne Halpin, owner, jhcards. “Everyone loves getting a package. Opening it to find an unceremoniously packed item without a personal touch is a bit of a letdown.”

If you want people to take you and your products seriously, you need to present your content through quality pictures.

“Learn how to take good photos, along with understanding sizing and image editing,” said Gari Anne Kosanke, owner, Bead Lovers Korner. “The reason for this is that the image of your product really needs to stand out and compel a customer to click and learn more about your product.”

Pay close attention to your image’s formatting, coloring and overall presentation on the site.

“If the image is sized incorrectly, it won’t show properly in the search view, or if it is dark and blurry, most people will pass right by the photo without looking,” Kosanke said. This can harm your company’s credibility.

Utilizing search engine optimization (SEO) is crucial to gaining views among pages of similar products posted on Etsy. Don’t post your work and write just anything – research and put some thought into keywords and tags before listing your first item.

“Etsy search works very differently than other search engines,” said Amanda Lehto, owner of The Painted Tee. “You need to understand how to optimize in order to be found in the millions of items listed on Etsy. It’s best to understand this before listing, so you can do it right from the start, rather having to adjust all of your listings that are done incorrectly.”

Social media is another way to attract customers. While you don’t need to use every social platform to find success, you should at least focus on one to draw a following.

Jennifer Schmidt, owner of The Cat Ball, said that it’s OK to choose your favorite site or to work on the one you’re most comfortable with. However, she noted that Pinterest has an advantage: Pins from Etsy are “rich pins” that show your pricing.

“Pins are searchable for a long time and can lead to sales in the future,” Schmidt said.

Don’t jump ahead of yourself if you haven’t put enough time into creating goods to sell in your shop.

“List a variety of items to start with,” said Jeanine M. Boiko of Okio B Designs. “Don’t open your shop with just a handful of pieces. Buyers aren’t typically impressed with two or three items in a shop. Having a larger variety will keep potential buyers browsing in your shop, and you have a better chance of making a sale.”

13
Sep

Is Buying a Franchise Right for You?

Is Buying a Franchise Right for You?

Credit: garagestock/Shutterstock

If you have an entrepreneurial spirit and are looking into investing in a franchise, now may be the time to do it. In 2013, Franchise Resales reported a “perfect storm” of conditions for buying franchises – baby boomer franchisees are retiring and putting their businesses up for sale. That, coupled with an improving economy and greater access to startup capital, meant a perfect opportunity for aspiring franchisees.

Since then, the franchise market has continued to rise. Ron Bender, CFE of Big Frog Custom T-Shirts & More, told Business News Daily that the franchise industry is currently in a strong place. He reported that Big Frog is currently experiencing their best year ever in regards to franchisee united economics and franchises opened.

“Franchisees are doing very well, and engagement and satisfaction are at all-time highs,” Bender said. “Many new stores are setting sales and profitability records … and all are seeing benefits. The economy is strong, [and] the future looks promising.”

While the franchising industry is on the rise, Steve Jackson, CEO of Hungry Howie’s pizza franchise, said it’s still a good idea to approach franchising – along with any business venture – with caution.

“It’s important to really do your research and find a franchise … that provides a robust training program to ensure you succeed,” Jackson said. “If you’re armed with everything you need to prosper, you’ll be able to cultivate a favorable environment to launch a thriving business in any market.”

13
Sep

Why I Left a Successful TV Career to Become an Entrepreneur

Why I Left a Successful TV Career to Become an Entrepreneur

Credit: Alejandro Chaban

Like lots of kids, I dreamed of being an actor when I grew up. From my small town in Venezuela, the lights and cameras of Hollywood were exciting and alluring. They also seemed impossibly far away.

The distance wasn’t just geographical. Becoming a famous TV star felt especially out of reach for me, because there weren’t a lot of people who looked like me on TV. I was too fat.

I come from a culture and family that celebrates food. Cooking for and feeding others are ways of showing love. Our family gatherings featured incredible feasts, and I was always praised for cleaning my plate and having a healthy appetite. But all that eating took a toll on my young body: by the time I was 15, I weighed 314 pounds. Kids at school bullied me, calling me “Shamu.” I was embarrassed by my body and ashamed of who I was.

When I couldn’t take it anymore, I became determined to lose the weight. But back then, I didn’t have the knowledge to do it in a healthy way. I tried dangerous fad diets—anything to make the weight disappear. I drank boiling water. I starved myself. I lost 150 pounds, but I was hospitalized for bulimia and anorexia.

Still, I dreamed of becoming an actor. I finished high school and moved out of my hometown to pursue my career, and I also began to study the art of nutrition. I worked hard to achieve a healthy lifestyle as well as my professional goals.

Even as my television career was taking off, my history with obesity, depression and low self-esteem weighed on me emotionally. During a difficult time in my life, my father encouraged me to share my story in order to inspire others struggling with their weight. I wrote and self-published my first book, “De Gordo a Galán” (“From Fatty to Hottie”) and was overwhelmed by the response from the Hispanic community.

I realized that I had uncovered an unmet need and a huge opportunity: the mainstream diet and wellness industry didn’t cater to Latin audiences.  The existing plans and products were only available in English, and the food choices weren’t relatable to Hispanic culture and lifestyles.

As a Hispanic celebrity who had experienced firsthand the struggle to lose weight, I was in a position to help others improve their lives. I decided to leave the entertainment world and become an entrepreneur. I launched Yes You Can!, a healthy lifestyle with a Latin flavor, in 2012. Today, we have 75 employees in the U.S. and thousands of coaches all over the country.

My passion for Yes You Can! comes from my very personal mission to help others transform their lives physically and emotionally with the power of a healthy lifestyle. For me, the key to being a successful entrepreneur and maintaining a healthy lifestyle is goal-setting. One of my mantras is, “a goal without a plan is just a dream.”

In my experience, the more clear, vivid and detailed the goal, the easier it will be to achieve in the long run. I know that in order to achieve big goals, I have to break them into manageable time-frames: short term, mid-term and long-term goals. And I have to write them down – the more visual they are, the better. We all have so much going on, and so many responsibilities, that it’s easy to get sidetracked from our goals. I constantly remind myself of my long-term goals and their greater purpose in order to stay focused and motivated.

Earlier this year, I published my second book “Think Skinny, Feel Fit: 7 Steps to Transform Your Emotional Weight and Have an Awesome Life.” In the book, I share success stories from real people who achieved their weight loss goals with the help of Yes You Can! Stories like these inspire me every day, and remind me how fortunate I am to make a difference in the lives of others—one person at a time, one day at a time.

About the author: Alejandro Chabán is an author, motivational speaker, and founder and CEO of Yes You Can! In his new book, “Think Skinny, Feel Fit: 7 Steps to Transform Your Emotional Weight and Have an Awesome Life,” Alejandro shares his inspiring personal journey and his seven essential steps to help people of all ages and backgrounds lose their physical and emotional weight and lead healthier, happier lives.

12
Sep

Factoring: What It Is and How to Choose a Service

Factoring: What It Is and How to Choose a Service

Factoring

Credit: Atstock Productions / Shutterstock

Invoice factoring is a form of alternative financing in which a business sells some or all of its outstanding invoices to a service, known as a factor, for an upfront percentage of the total value. Then, as the factor collects the outstanding payments, it returns the remainder (called the rebate) to the business, minus a predetermined fee. Factoring services primarily work with businesses that provide goods or services to other businesses or to the government, and use invoicing to bill their customers.

Factoring differs from traditional lending in that it’s more accessible to businesses with less-than-perfect credit and there’s no restriction on how you use the money. It’s also faster: Applications are shorter and require less documentation, approvals are quicker, funding is provided promptly, and financing is repaid within weeks or months (typically 30 to 90 days) rather than years.

While rates are relatively low if your customers remit their invoice payments quickly, factoring can be more expensive than other financing options if your remittance terms are long, your customers are slow to pay or you need long-term financing. As you evaluate whether a factoring service can help your business improve its cash flow, consider the following questions:

  • Will this type of financing help your business grow?
  • How much does it cost to work with a factor?
  • Is there a contract? Are there minimums? What should you look for in a factoring service?
  • What type of factoring service should you use?

We’ll help you answer these questions, but if you already know what you need and just want to see our recommendations for the best factoring service, visit our best picks page.

Factoring can help you access capital quickly and is best used as a short-term solution that assists you in keeping your businesses running while you wait for customers to pay outstanding invoices, or allows you to take advantage of time-sensitive opportunities to help your business grow. For example, if you’re waiting to receive payment on several large invoices but need money now because one of your suppliers is offering a significant discount if you purchase a certain dollar amount of products within a specific time frame, a factoring advance may be a good solution. Here’s a real-life example of how invoice factoring helped a small business grow:

Eco Nuts, an organic soap nut retailer that appeared on Season 4 of ABC’s “Shark Tank,” was unable to secure an investment deal, but it still had a large purchase order from a major retailer on the line. The company opted to work with the factoring company BlueVine to successfully fill the order.

“When [Eco Nuts] came to us, they were limited by the working capital they had on hand to meet that demand,” said Edward Castaño, former vice president of marketing at BlueVine. “They had so many outstanding invoices from TJX (the parent company of T.J.Maxx, Marshalls, HomeGoods and the Sierra Trading Post) that it made it hard for them to fulfill orders.”

According to Castaño, Eco Nuts didn’t have the cash to purchase the supplies and cover the salaries to fill the new orders, which put its growth trajectory at risk.

“[Eco Nuts] used our invoice financing solution to unlock the cash trapped in their invoices to fulfill new orders and maintain their growth trajectory,” he said.

To meet eligibility requirements for most factoring services, your customers’ accounts must be in good standing. Some factoring services also consider other qualifiers, such as your annual revenue and how long you’ve been in business.

The factor conducts due diligence to determine the creditworthiness of your customers and whether they’re capable of paying their invoices on time. This is an essential step, as factors typically don’t function as collection agencies.

After approving your customers, the factor reviews outstanding invoices and inspects them for accuracy and completeness, verifying with your customers that the invoices are genuine, the products or services have been received and accepted, and the invoice dates are correct. If everything’s in order, the factor typically requests payment from your customers by sending them a notice of assignment that instructs them to send invoice payments directly to the factor.

After you’ve selected which invoices you want factored, the service advances you money, typically between 70 and 90 percent of the invoice value. Most companies transfer the money to your account using an ACH transfer, which can take around two business days to receive. Wire transfers are often available, though you’ll pay a fee for the convenience of receiving your money the same day you request it.

After your customer pays the invoice, the factor forwards the remainder to you, minus its service fee.

“The bottom line is that [the business owner] wants to get paid for their work right away,” said Kevin Gowen Sr., founder, president and CEO of AmeriFactors Financial Group. “The deal isn’t over until the customer has paid the invoice and the check has cleared the bank.”

Factoring fees usually range from 2 to 6 percent of the invoice total. This fee is known as a discount rate, and your specific rate will be determined by your creditworthiness, invoice volume and size, customer base, industry risk, client credit history, and billing structure. As with other financing options, the more risk the lender takes on, the more you’ll pay in fees.

Rates may accrue weekly or monthly. When you call for a pricing quote, you’ll want to ask whether it’s a weekly or monthly rate and how frequently the rate increases. Some factors quote a monthly or 30-day rate that increases each additional 15 days, but many quote a weekly rate that increases every seven days.

Fees may be based on the advance or the full amount of the invoice. As you call for quotes, you also want to ask whether the fee is based on the full invoice amount or only the amount of your advance. As most companies advance between 70 and 90 percent of the invoice value, choosing a company that charges only on the advance saves you quite a bit on fees.

Factoring is expensive if you have long remittance terms or slow-paying customers. If you have long repayment terms or your customers tend to pay late, longer-term financing, such as a bank loan, may be more cost-effective than factoring. Although 2 to 6 percent sounds very low, keep in mind that this is only for the week or month, depending on the factor’s terms. If you’re quoted a 1 percent fee that compounds weekly and your invoice remittance terms are 30 days (around four weeks), you’d pay 4 to 5 percent – if your customers pay on time. If your terms are longer or your customers pay their invoices late, factoring gets expensive. For example, for a 60-day remittance, you’d pay 8 or 9 percent, and for 90 days, you’d pay 12 to 13 percent.

Some factors charge additional fees. Although the best factors only charge a percentage of the invoice advance, some charge a variety of fees. When you call for a quote, you want to ask the sales rep if the factoring company charges any of the fees listed below. You also want to read the contract or terms of service and to verify which fees the company charges before signing up for a service. Possible fees include the following:

  • Application fee: This fee covers the costs of reviewing your application, setting up your account and screening your customers.
  • Bank transfer (ACH) or wire fees: Most factors provide ACH transfers for free but pass the bank’s wire transfer fee on to you.
  • Credit check fee: Sometimes included with the application or due-diligence fee, this fee for checking your customers’ credit may be charged separately or when you bring on new customers (this may be called a new client fee).
  • Due-diligence fee: Similar to the application fee, companies may charge this fee for the costs involved with checking your credit and your customers’ credit, and verifying that your customers and invoices are authentic.
  • Early termination fee: If you sign a contract and decide to close your account before the end of the term, you may be charged a penalty.
  • Lockbox fee: If the factoring service sets up a lockbox for your customers to send invoice payments to, you may be charged a fee.
  • Service fee: This fee may be charged monthly and covers costs associated with maintaining your account.

In addition to rates and fees, you’ll want to ask the factoring service about its terms, including the following:

  • How long is the contract? Although some factoring services are willing to work with you on an as-needed basis, others require you to sign a contract. If this is the case, ask how long the term is, what your obligations are, if it automatically renews at the end of the term, what the cancellation procedure entails and what fees you’ll incur if you close your account early.
  • Is there a reserve account? To mitigate their risk, some factors hold a portion of your invoice payments in a reserve account. For example, the factor may reserve 10 to 15 percent of your credit limit.
  • What is the monthly minimum? Some companies require you to factor a certain dollar amount or number of invoices each month. If you fail to do so, the company charges a fee to compensate for the money it expected to make from your account.

As you evaluate factoring services, you need to decide which type of factoring you need. For instance, do you need a service that factors all of your outstanding invoices, or do you want to choose which invoices to factor? Do you prefer to continue receiving payments from your customers, or are you comfortable handing collections over to the factoring company? Do you want to be held responsible to the factoring company if customers don’t pay? Keep the following types of factoring in mind as you evaluate factoring services.

Bulk or whole-ledger factoring: With this type of factoring, you turn over all of your invoices to the factoring service for a set period. You’re usually required to sign a contract, and there are typically monthly minimums and additional fees associated with this type of service. However, rates are usually lower.

Spot or single-invoice factoring: You can choose which invoices you factor with this type of service. There’s normally no monthly minimum or contract requirement, but rates are higher. If you only plan to use a factoring service intermittently, or you only want to factor invoices from certain customers, this is the type of service to look for.

Recourse factoring: This is the most common, readily available and cost-effective type of service. In this setup, the factor funds your invoices but requires you to provide a refund on any invoices that remain unpaid after a certain amount of time. Since you assume the risk, rates are lower.

Nonrecourse factoring: This type of factoring releases you from any liability for delinquent invoices. However, since the factor assumes the risk of unpaid invoices, this type of factoring costs more and the creditworthiness of your client roster will be more closely scrutinized.

Notification factoring: The majority of factoring services require you to send your customers a notice of assignment instructing them to remit invoice payments directly to the factor.

Non-notification factoring: Some factors don’t require a notice of assignment, so your customers never have to know you’re using a factoring company. These factors allow you to continue receiving payments from customers as if nothing has changed; you then forward the funds, plus fees, to repay the advance.

However, the factoring services that offer non-notification factoring may function a little differently from those that notify your customers. Your rates may be higher, there may be a repayment schedule, and late fees may be applied to your account if you fail to repay the advance on time.

For instance, Fundbox, our pick for the best factoring service for very small businesses, advances 100 percent of the total invoice value. You repay the advance, plus a weekly fee, over a 12- or 24-week term. The advantage is that you remain in control of your receivables and, if you can repay the advance early, you can save money, since there’s no early repayment penalty. However, the prorated repayment and weekly fee are automatically withdrawn from your business bank account, which may be problematic if you’re still waiting on an invoice payment and cash is tight.

Factoring may or may not be the right financing option for your business. However, if your day-to-day operations are suffering due to large outstanding invoices, you don’t qualify for bank loans or lines of credit, or you need cash quickly and don’t have time to apply for traditional financing, you should consider factoring.

The potential downside to factoring is that the fees can add up quickly, and it may end up being more expensive than a loan or other types of financing. You need to consider whether immediate access to working capital is worth the higher price, and whether factoring will help your business expand or recover while achieving specific long-term goals or if it will exacerbate existing issues.

Factoring is most beneficial to those with a reliable client base and a net 30 or net 60 payment structure. Factoring isn’t a solution for companies in dire financial situations. If your company has substantially more accounts payable than accounts receivable, factoring is probably not a good idea.

Once you’ve determined that factoring is the right financing option for your business, it’s time to look for the service provider that will be the best fit.

“You want to work with someone that you trust and is transparent,” Einat Steklov, president of Coral Capital Solutions, told Business News Daily. “It’s good to ask questions. You want to work with a company that is experienced.”

Steklov suggests asking contacts within your business community to provide references to help you find a great factoring company.

“You need to trust the person who makes the introduction for you, not unlike looking for a supplier that is critical to your business,” Steklov said. “In the case of the supplier, you like to see the product when choosing it. When choosing a factoring company, you need to make sure they’ve factored before.

“Overall, factoring is a simple finance transaction,” Steklov continued. “Factors want their clients to grow and be successful. Their success is our success as well. We grow together with our clients.”

12
Sep

Fundbox Review: Best Factoring Service for Very Small Businesses

Fundbox Review: Best Factoring Service for Very Small Businesses

Credit: Fundbox

Our 2017 research and evaluation of factoring services leads us to again recommend Fundbox as the best factoring service for very small businesses. We chose Fundbox from dozens of factoring companies. To understand how we made our decision, and to see our methodology and a list of factoring services, visit our best picks page.

Fundbox gives very small businesses access to credit, which they may otherwise not be able to obtain. It has fewer minimum requirements than most lenders, and both invoice factoring and lines of credit are available. Fundbox has transparent pricing; before you submit an invoice to be factored or request a draw, it shows you the exact fee so there are no surprises when it’s time to repay the advance. There’s no lengthy contract, monthly minimum or prepayment penalty, so you can repay advances early and Fundbox waives the remaining fees.

Fundbox fees start at 4.66 percent per week of the invoice value, based on a 12-week term, or 8.99 percent per week for a 24-week term. The company advances 100 percent of the invoice value; you repay a prorated portion each week, plus a fee. Minimum requirements include using compatible accounting software for at least six months and billing at least five invoices per month or using a business checking account for at least three months. There are no credit checks; rather, the company connects to your accounting software or business bank account to determine your creditworthiness.

Fundbox’s low barrier to entry makes it a viable financing option for very small businesses, as well as those that are new and lack a lengthy credit history and those that have poor credit. It has only three minimum requirements:

  1. Only businesses can use Fundbox; the service isn’t intended for use by individuals, households or families.
  2. Your business must be based in the U.S.
  3. You must use supported accounting software to create and send invoices (see below) for a minimum of six months, with at least five invoices per month, or have a minimum of three month’s history using a business checking account.

Fundbox doesn’t have any minimum revenue requirements, doesn’t exclude businesses from certain industries, and doesn’t require collateral or personal guarantees. The company also doesn’t consider the business owners’ (or their customers’) personal credit scores. However, per the terms of use on the company’s website, when you set up an account, you consent to background checks for yourself and for your business’s directors and officers.

Despite its minimal requirements, Fundbox advances 100 percent of invoice values, making it a good option for growing businesses that are too small to work with most factoring companies but need a financing solution to keep their cash flow healthy when customers have yet to pay their invoices.

Fundbox has an easy application process. To sign up for an account, all you need is your business email address, business phone number and a secure password. You’re not required to provide financial statements, tax forms, legal documents or other paperwork to set up an account, and you don’t have to speak with anyone at the company to get started.

Once you’ve set up your account, you’ll connect it to your accounting software. Supported programs include the following options:

  • Clio
  • eBillity
  • FreshBooks
  • Harvest
  • InvoiceASAP
  • Jobber
  • Kashoo
  • PayPal
  • QuickBooks
  • Xero
  • Zoho Books

Fundbox uses the data from your accounting software or business bank account to determine the legitimacy of your business, evaluate its health, and calculate whether or not you’ll be able to repay advances. You need at least six months’ worth of accounting data on one of the supported software programs to be eligible to factor invoices through this company.

Editor’s note: Looking for information on factoring services? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:

To help us evaluate Fundbox, we called the company, posing as small business owners looking for a factoring service. We asked company representatives how their invoice financing service works and how it differs from other factoring services.

After your account is approved and your initial credit limit is set, you can select invoices to be funded. If you submit the invoices before noon, you may receive your funding as early as the next business day.

Fundbox differs from most factoring services in that it advances the full dollar amount of the invoices rather than the industry average of 70 to 90 percent. The minimum advance amount is $1,000, which can be a single invoice or multiple, and the maximum is $30,000; however, once your account is established and you provide the company with more information about your business, it may increase to as much as $100,000. The credit limit is revolving, so as you pay off advances, more credit is available to you.

While most factoring companies require you to instruct your customers to remit invoice payments directly to the factor, Fundbox allows you to continue working directly with your customers and instead automatically withdraws weekly repayments from your business bank account. If you prefer that your customers don’t know you’re working with a factoring company, or don’t want to introduce the confusion of wondering which invoice payments they should send to you and which go to the factor, Fundbox may be a good option for you.

The Fundbox representative we spoke with said repayments are automatically withdrawn from your business bank account via ACH (Automated Clearing House), starting one week after you receive the advance. Repayments include a prorated amount of the advance plus your weekly fee. (See below for more information on fees.)

You should be aware that if you’re unable to repay the advance on time, the late fee is steep, costing three times the weekly fee plus an ACH missed payment reimbursement fee. For this reason, it’s very important to make sure you have enough money in your business bank account to cover the repayment in full.

Fundbox is transparent with its customers about its pricing, which is a critical consideration, no matter what kind of business financing you pursue. When you choose an invoice to factor, the company shows you the total amount you’ll pay for it before you accept the advance.

The representative we spoke with explained that you have 12 or 24 weeks to repay the advance and each week you pay a prorated amount of the principle plus a flat weekly fee. There are no upfront fees – no application, origination, due diligence or maintenance fees.

He said that, on average, for a $1,000 advance you pay $7 per week, though your rates may be higher or lower, depending on the specifics of your business. This is somewhat higher than the $3.88 weekly estimate for this amount provided by the calculator on the pricing page of the company’s website.

If you’re able to repay the advance early, there’s no early repayment penalty, and Fundbox waives the remaining fees for the weeks left on your term.

Although Fundbox doesn’t offer 24/7 customer support, phone support is available during expanded business hours of 8 a.m. to 8 p.m. ET, Monday through Friday. You can also reach Fundbox via email or by messaging the company via its website, and a representative will get back to you within 24 hours.

When we called Fundbox posing as potential customers, we had mixed results. Friday afternoons appear to be a busy time, as our calls went to voicemail after a five-minute wait. However, when we called Monday morning, we reached a representative right away who patiently answered our many questions about how the service works, the rates and the repayment terms.

Fundbox’s website has a FAQs page, a blog and a searchable support center that has dozens of help topics that address a variety of topics, including how to get started with Fundbox, how to use the dashboard, pricing terms, payments, security and how to set up your accounting software.

Although we believe Fundbox to be the best factoring service for very small businesses, there are some drawbacks to consider:

  • It’s more expensive than other lending options as a long-term solution. If you plan on using Fundbox for a short period, and the advance allows you to take advantage of an opportunity that helps you grow your business or save money, it can be a valuable resource. However, if you need a long-term credit solution and have the credit history to qualify for other lending options, a small business loan will have a lower interest rate.
  • Repayment is weekly, rather than per invoice. If your cash flow is tight while you’re waiting for one or two customers to pay large invoices, having funds automatically deducted from your business bank account each week may exacerbate the problem. However, if your income is steady, it may be easier for you to repay the advance in smaller increments over a 12- or 24-week period.
  • Late fees add up quickly. If you don’t have enough money in your business bank account to cover the automatic repayment that Fundbox withdraws from your account each week, you’re charged triple the weekly fee plus an ACH missed payment reimbursement fee.
  • Advances may be too small for some businesses. Fundbox has a minimum advance of $1,000 and a maximum of $30,000 (which may increase to $100,000 for established clients), though this cap may be less, depending on the specifics of your business. These amounts are likely fine for most microbusinesses, particularly those that don’t want to take out huge loans. But if you’re in a business or industry that deals with high-value goods (such as technology or fine jewelry) or provides costly services (such as consulting or medical practices), you may need to find a factoring service with higher funding caps, such as BlueVine or American Receivable. You can also check out our best picks page for a comprehensive list of factoring services.