Home Wealth Project

We’ve been hearing about increased confidence in small business and, if you’re like me, you want to believe it - but you’re suspicious, too. How do we really know if things are getting better? How do we really know if lending is beginning to open up for small businesses? I don’t think anyone is claiming that small business loans are becoming easy to obtain, but there are good signs that we are headed in the right direction and that the availability of funds are growing for main street.

Bank Lending

Before we talk about the “good news” let’s do a quick history lesson about how we got here. Some would say it started with the secondary mortgage market. As mortgages got closed, lenders were able to sell their mortgages on the secondary mortgage market and wall street turned them into mortgage bonds. As real estate prices increased and mortgage rates decreased and profits were flowing through wall street the “appetite” for these mortgage bonds increased. Then you join that with deteriorating underwriting criteria along with a staggering number of sub-prime loans to non-credit-worthy borrowers and we’ve got problems.

But how did this happen? It happened because the ratings agencies (Fitch, Moody’s, and Standard & Poore’s) were giving the same grade to the pools of sub-prime mortgages as they were to the “prime” or “A-Paper” mortgages so these bad mortgages flowed through the system just like any other mortgage. As the defaults hit certain levels, the investors who shorted mortgages by buying insurance against the bad mortgages were able to cash in – this is where you Google search “who is John Paulson” or you could try “what did AIG do wrong?”

History lesson almost over – but what happens next? It’s called TARP or the Troubled Assets Relief Program. TARP is where Uncle Ben (Bernanke) drew on the lessons of The Great Depression of the 1930′s so we didn’t repeat our mistakes. The Fed actually turned a recession into The Great Depression in 1929 by letting the money supply contract very sharply which caused prices to fall and inflation to hit.

Secondly, they let the banks fail and thousands of banks actually failed. TARP was a conscious effort to let the banks recover first because if the banks fail then we all fail and we propel ourselves into a much worse economic climate. TARP was an infusion of capital into the top banks – yes, it’s 100% true that it was “unfair” to the smaller banks – in an effort to get them to continue to lend (or at least to not totally shut down their lending). Interestingly, tax payers made money on TARP but, of course, that hasn’t been talked about in the “occupy” movements.

So here we are a few years after TARP. Fortunately, The Great Recession did not become a depression.

According to CardWeb, $4.5 billion was extended to small business owners in 2009 by Citi. Then they increased that to $6 billion in 2010. Then they pledged to lend $24 billion to small business (defined by them as businesses with less than $20 million in annual revenue) over a three year period from 2011 – 2013. Citi announced last week that they are ahead of pace on their goal of lending $7.0 billion in 2011. They finished the calendar year very strong after a slow summer and ended up lending $7.9 billion in 2011 to small businesses.

I agree that there’s a lot more to be done. However, if we put mistakes of the past aside, this is one lender who is showing us progress and who intends to continue to lend at a much more generous pace than we saw in 2008 and 2009.

Lending Photo via Shutterstock

More Signs of Increased Small Business Lending

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Amish Entrepreneurship: Black Buggies Make Great Signs

Sep 5th

The Amish are natural entrepreneurs and business people. After all, they’ve supported themselves with farms for centuries. Their approach to life has been infused with the concept of free enterprise and self-employment. But as has been documented over the past decade in books and articles in magazines like Forbes, the Amish are leaving their farms to start businesses.

About 15-20 minutes from me in Ohio is the largest Amish settlement in the U.S. I see evidence of Amish entrepreneurship all around me. Amish tourism (i.e., people traveling to visit Amish country, buy Amish furniture and crafts, and eat Amish food) has become a sizable business here. In the summer it’s especially noticeable, because you will see evidence of Amish enterprise literally right under your nose. This photograph shows an example:

Click for larger image

This is a typical scene on an August afternoon in rural Ohio near Amish country. You see 4 Amish buggies, wedged between a Pilot gas station on the left and a McDonald’s on the right. This is just off of Interstate 71 between Medina, Ohio and Ashland, Ohio.

The Amish arrive early and set up their tents and tables in this narrow strip of land. You can just see the tops of their blue tents behind the buggies. They tie their horses in a sheltered field nearby.

But notice that they don’t leave the buggies in the field. Instead they park their buggies right next to the street. Those buggies being there is very important. The buggies are what draw the buyers. In fact, if you zoom in on the photo you’ll see one of the buggies has painted on it in white letters “FOR SALE BASKETS.”

They must know their buggies are a tourist draw. I don’t know about you, but I wouldn’t be very interested in just anybody alongside the road with a blue tent. They’d barely get a second glance. But the Amish … ah, well that’s a different story. For Amish crafts I might just stop.

The Amish come here because there’s a nearby outlet mall. It draws lots of traffic from people who are already in a buying mood. (I shot this from the mall’s outer parking area across the road.) I’ve seen them at this particular spot for years, so it must be a good spot. In the 10 minutes that I sat watching I saw numerous people walk over from the gas station and the McDonald’s, to browse and buy. One minivan even did a quick U-turn to stop!

The Amish are not just involved in selling to tourists and leisure shopper, however. Some Amish are also turning their farms into commercial enterprises on an artisan scale. The Mt. Hope Farmer’s Market in Holmes County — the capital of Ohio’s Amish country — offers produce grown by dozens of Amish farmers. Buying Amish produce has become an event for local residents to look forward to each summer. It’s also point of competitive advantage for one local grocery chain, Buehler’s. It touts the locally-grown Amish produce it carries, saying “in the field one day and on your table the next.” The grocery chain even wrote about the Amish farmer’s market in its blog.

The Amish are turning their cultural propensity for self employment into business opportunity wherever they find it — even at the side of the road.

Amish Entrepreneurship: Black Buggies Make Great Signs

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The warning signs of defending the status quo

Aug 29th

Posted by Home Wealth Project in Marketing Tips

When confronted with a new idea, do you:

Consider the cost of switching before you consider the benefits?
Highlight the pain to a few instead of the benefits for the many?
Exaggerate how good things are now in order to reduce your fear of change?
Undercut the credibility, authority or experience of people behind the change?
Grab onto the rare thing that could go wrong instead of amplifying the likely thing that will go right?
Focus on short-term costs instead of long-term benefits, because the short-term is more vivid for you?
Fight to retain benefits and status earned only through tenure and longevity?
Embrace an instinct to accept consistent ongoing costs instead of swallowing a one-time expense?
Slow implementation and decision making down instead of speeding it up?
Embrace sunk costs?
Imagine that your competition is going to be as afraid of change as you are? Even the competition that hasn’t entered the market yet and has nothing to lose…
Emphasize emergency preparation and the expense of a chronic and degenerative condition?

Calling it out when you see it might give your team the strength to make a leap.

View full post on Seth’s Blog

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5 Signs You’re Throwing Leads in the Trash

Jun 23rd

What I’ve learned the last 10 years of working with entrepreneurial small businesses is that this savvy group of marketers cares about three things: getting more customers, increasing sales and saving time.

Small businesses tend to focus most, if not all, of their marketing and sales resources on closing hot leads — which means the not-ready-to-buy-yet leads end up getting thrown out with yesterday’s garbage.

This “get more customers now” mentality, combined with a lack of time and resources, hurts small businesses and often causes some serious inefficiency in the marketing and sales funnel.

Are you suffering from this problem in your small business? There are five signs your marketing and sales funnel is leaking leads and losing customers.

1. You don’t use a lead magnet or Web form. You spend money and time driving traffic to your website, but then you bury your opt-in form. Or worse, you don’t offer a compelling lead magnet (e-book, webinar, demo, etc.) that people can opt in for at all. If you don’t have their contact information, you can’t follow up, and your conversions will be lower.

2. You don’t segment your prospect and customer list. I suggest you segment your contact list three ways: by lead source, by demographics and behaviors (links they clicked on in an email, webinars they attended, etc.) and by selected interests (what information they’ve opted to receive).

3. You don’t have a lead nurturing system in place. Without a system in place for nurturing and qualifying cold leads, your sales team waste hours on the phone educating prospects about the benefits your product or service provides. It helps to have an automated follow-up system in place so no lead gets lost in the cracks.

4. You batch and blast. Your lack of time forces you to send the same message at the same time to your entire contact list. While your prospects and customers may share similarities, this one-size-fits-all approach will train them to ignore you or opt out of your messages all together. Track what actions they’ve taken, what information they’ve opted in to receive and their buying history. Then send only relevant, highly targeted messages that you know they will want to receive. This strategy will result in better open rates, higher click-through rates and more lead-to-sale conversions.

5. Any nurturing ends after the sale. Once you get the customer, you get too busy to keep them happy, to upsell additional products or to ask for referrals. Automated follow-up can help satisfied customers remember to send their friends your way. Also be strategic about the products you upsell. If you have a system in place for tracking customer behavior, you can easily market your upsells to their needs. I know one small business that sends a pre-recorded voicemail automatically to new customers, thanking them for their recent purchase. That same business sends cookies when customers spend a certain amount of money (this is done automatically when the sale is processed). It’s about wowing your new customers so they don’t leave you for the competition.

Don’t fret if you find your marketing and sales funnel has some serious leaks. Just about every small business will experience and overcome these growing pains. In today’s world of technology, there are many marketing and sales tools available to help small businesses attract, nurture and convert leads.

5 Signs You’re Throwing Leads in the Trash

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Dollar Signs: Like Them a Lot

Mar 11th

Unleashing Bold Initiatives

This cartoon actually came out of revisiting one of my most popular cartoons. It shows a person giving a presentation where a dollar sign is shown in an equation equaling a happy face.

It’s been so popular for so long I thought I’d challenge myself to create something similar (see above cartoon).

All in all I’m happy with the result, but it didn’t turn out to be the second lighting strike I’d hoped for.

Dollar Signs: Like Them a Lot

View full post on Small Business News, Tips, Advice – Small Business Trends

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Kids Used To Steal Stop Signs

Dec 8th

Posted by Home Wealth Project in 2478