Archive for October 2009

Global Cash Flow Analysis Now Used to Justify Bank Loans

October 29, 2009

By John Riley

 It wasn’t too long ago when a bank loan could be obtained by an individual demonstrating his ability to repay that loan. Then came the recession and the government began taking steps to shore up the financial system.  Now the rules have changed.

 Global cash flow analysis (GCF)  is the new mantra that bankers follow in analyzing a candidate’s loan worthiness. To most, it may seem an arcane process, but in fact it’s more of the same you’ve experienced in the past when applying for loans. It means all your debt instruments, rather than just the loan you are applying for, are reviewed and an assessment made of your ability to meet each of those obligations.

 Until now, lenders in the commercial market  have relied on cash flow from operating  businesses or income producing properties as their repayment  sources for a loan. With private bankers, an individual’s personal cash flow has been the measure. With individual loan requests, bankers prepare a cash flow statement  (PCF) which is widely used.

 Global cash flow is a modification of personal cash flow.  Business debt service and business income are added to personal cash flow creating a new instrument.

 a cool fifty thousandAccording to Michael Sabetta, Senior Vice President, Goldwater Bank, a  family’s income and spending habits are detailed by the PCF, but does not take into account  how much the family takes in or how much it pays out. However, the GCF analysis considers all sources of cash flow and all debt service related to personal debt and debt that has been personally guaranteed by business holdings or investments in a Limited Liability Company (LLC).  It’s important that business cash flow represent the amount of money the family could have withdrawn, spent or transferred to their personal account. (Many bankers differ on this point)

“As a process, it is not much different from banking in the 70’s or 80’s,”Mr. Sabetta noted.

 The global cash flow analysis needs to be used when a borrower’s obligations include a company as lender and the person who owns that business as borrower or the other way around. In this situation, the PCF and business cash flow represent the two main repayment sources. This is essential because neither the PCF nor the business cash flow individually give a fair picture of the borrower’s ability to repay.

 More and more, banks are being required to adopt the GCF. No doubt this is being influenced by bank examiners who are looking at the GCF as the most reliable tool to gauge loan worthiness. Although the GCF process has not been universally adopted, it is receiving much more attention within the industry. That means, you can expect a broader and more thorough analysis of your next loan request.




Why You Need the Internet to Promote Brand You

October 27, 2009

In 1999, business management guru Tom Peters in his book ‘The Brand You 50’, said that the job security of individuals was beginning to revert back to the way it was hundreds of years ago. In this period, shortly after America was founded, job security was based on three core elements:

Networking Skills

Craft meant that you had a skill that was marketable. To have distinction meant that what you did was memorable. To have networking skills relied on ‘word of mouth collegial support’.

What Tom Peters argued was that we live in an age now where personal branding and networking is everything, even for those working for someone else’s payroll. It is these core elements that are now important once more for job security, where so called white collar jobs (knowledge workers) are expected to almost entirely fizzle out (at least in the recognized ‘western world’) as Peters claimed in the late 90s ‘in around 10 years from now’.

The age of ‘Brand You’ was already in motion when Peters spoke about it back then, and has never been more evident than it is today.

This reconfiguration of the way people are doing work coupled with the economic downturn, means that more and more people are becoming independent and freelance workers. Inevitably, many of these freelancers are using the Internet to get work (as are more prospects looking for workers and creatives). The influx of cheaper freelance labour from places like India, means that more choice, at lower costs are available to clients on the web.

Because of all this, freelancers, and particularly creative freelancers, need to create and promote a personal brand more than they ever have in the past if they are to succeed in the long-term. It is possible to succeed as a freelancer and overcome these obstacles. It doesn’t need to be frightening or complicated. It simply requires a strategy.

It requires that you can demonstrate you have a niche skill that is marketable, that you stand out as best as you can and that you build up a solid and relevant network of friends, fans, clients, colleagues and people that share your interests.

The single most effective way of building and marketing your personal brand in this way is through the Internet. The Internet is not only hugely powerful in terms of gaining exposure for your work, and I will be writing much more on this as the blog progresses, and will demonstrate that you are ‘with it’ and up to date (what clients are looking for), but it is now almost a necessity to get online as a freelancer, with so many others doing the same.

If your competition is online, you’ve got to join them to succeed!

Alex Mathers
Writer, Marketing enthusiast, Illustrator, Designer
Red Lemon Club Marketing

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Recommended Book: Transforming Your Leadership Culture

October 20, 2009

Stressed Over Money

In spite of their allure and promise, change management initiatives typically fail to make an impact on organizations. In fact, after decades of change management, studies studies still suggest that most of these efforts will fail— leaving leaders frustrated and their companies trapped in the status quo. In today’s volatile economic climate, the bottom-line impact can be devastating.

In their new book, Transforming Your Leadership Culture,  released by business publisher Jossey-Bass, Center for Creative Leadership faculty members John B. McGuire and Gary B. Rhodes offer a provocative solution: Don’t get stuck on changing an organization’s systems. Focus instead on your people and your culture.

McGuire and Rhodes explore the powerful role that leadership culture—the beliefs and behaviors related to leadership that organizations display daily—plays in organizational engagement and growth in comples times.

“When leaders take on and follow through on cultural transformation alongside their strategic and operational changes, they consistently succeed in in reaching performance goals,” says McGuire. “They often just need help knowing how to change the culture.”

“Transforming an organization’s culture to face new challenges is very possible and increasingly vital in today’s economy,” McGuire says. “Individuals, teams and entire organizations can change their belief systems, current mindsets and learn more collaborative behaviors. Bigger minds can be creatted to solve bigger problems.”

Printed with permission of the Center for Creative Leadership.

Authenticity and the Leadership Mold

October 20, 2009

Stressed Over MoneyBy Kelly Hannum


It’s and old question; how much of “you” can you reveal at work? I don’t mean dress code, but acting and saying things the way you would outside of work. Where’s the line between inappropriate and inauthentic?

With social networking, flexible schedules, and hip-mounted technologies that keep us connected to people and places all over the world—separation between work and non-work is no longer the default way of doing things. Most workers have to figure out and manage their boundries—-by reinforcing them, blurring them, or whatever makes sense in the moment. Switching from one’s “work-self” to one’s “non-work self” is something we have to do more frequently. 

To blend or not to blend?

Many folks blend work and non-work “friends” on social networking sites.  That could be a good thing, but is it? The idea of an integrated self is appealing—it’d make life easier, but is it a equal option for everyone?

Being authenic is bound to be easier for folks who are part of the leadership “in” crowd (aka folks who fit the leadership mold—who look, walk, or talk in a manner consistent with dominant images of leadership). As we collectively embrace more inclusive images of leadership, I imagine the option for everyone to bring their full self to work will increase.

Are we beging challenged?

In the meantime, we may have to ask ourselves is this inappropriate or is it something that challenges our image of leadership — and thereby places an expectation that someone else has to be inauthenic in order to fit our leadership mold?

Printed with permission from the Center for Creative  Leadership blog, Leading Effectively.

Has Your Business Stalled? Better Rethink Your Strategy

October 12, 2009

By John Riley

Rethink Your Strategy

Rethink Your Strategy

It’s axiomatic that a business plan or business model should be a dynamic document, i.e. revisited periodically and revised as necessary to reflect new realities. When its neglected, bad things happen such as the business may stall and the market share tumble.

 When a company stalls, there is usually more than one reason and its essential all the reasons be quickly identified.  If the problems linger too long, the company will find it increasingly difficult to restore its position in the marketplace. The concept of continuous improvement needs to be instituted and ingrained in employees as a normal part of the business process.

 First,  analyze the competitive situation to see if any of the players have changed their strategies or if any new companies have entered the arena.  Most often, new players will cut prices to establish themselves and gain a toe hold in the market.

 \Next, core customer relationships need to be examined to make sure customers have not found fault with your products, services or pricing. Because they are core accounts, you want to make regular contact at the management level so you can quickly determine any change in attitude.

 You also want to be sure existing products and services are continually being upgraded and new products are being introduced. You never want to be without a new product/service development program. New products are emerging continuously to replace products whose normal life cycle has not expired and you want to be ready to replace your own current product/service with a new and improved product/service rather than letting a competitor do it.  That will make life more difficult for the newcomers and enable you to preempt the established competition.

Finally, there needs to be a recognition of the critical skill jobs in the company. You want to be sure you have your best people with the right skills in those jobs. You also need to recognize the competition may buy a few of your good people so a succession plan should be in place to insure competent replacements are ready to step into those jobs. Finally, there may be a need for training of the other incumbent employees and provisions should be made for them.

 Any or all of these issues can affect how well your business is performing and when a stall occurs, that’s a danger signal that cannot be ignored. Swift remedial action can often restore your lost position, but any delay may create irreparable damage. It’s an easy choice to make.

FTC Toughens Ad Rules

October 9, 2009

Advertisers, celebrities and online bloggers in the US will now be considered liable for any false claims they make while promoting products and services, new guidelines from the Federal Trade Commission state.

In its Guides Concerning the Use of Endorsements and Testimonials in Advertising, the FTC laid out a number of updated rules governing both online and offline ads, amending some procedures that had not been modified for almost three decades.

Executions featuring consumer testimonials must now explicitly state the average outcome customers can expect when using a product, rather than focusing on the results that are the most impressive, but are also atypical, and then adding disclaimers.

Bloggers will be required to disclose any links they have with brand owners, who often provide web users with financial or other forms of reward to review or comment on their goods.

Similarly, these online authors will be held liable if any such statements are misleading, and they are then found to be connected in some way with manufacturers.

Celebrities will be subject to similar provisions regarding the disclosure of their relationships with companies when appearing outside of traditional forms of advertising, such as on social media platforms or when on talk shows.

These high-profile spokespeople may also be held responsible for erroneous comments they make about goods they are officially endorsing.

Printed with permission of World Advertising Research Center

Just How Different Are You?

October 6, 2009
By Cidnee Stephen
Just How Different Are You
The other night, I was out at my favorite Sushi restaurant. We go there quite regularly because both my son and I are in love with their rolls, especially their Signature Dynamite Roll.

Being the marketer I am, I couldn’t help but notice as the little boats floated around with various dishes, that others must share our passion. The boats were full of our favorite rolls.

Yet oddly enough, the sign outside, promoted their excellent service. Now don’t get me wrong, their service is second to none! But the problem with boasting quality and service is that these are EXPECTATIONS, not DIFFERENTIATIONS.

It is VITAL as a small business you find a way to differentiate yourself from the competition.  If you don’t, you quickly become a bit of a commodity, which allows your customer to go to price.  

Let me explain.  Awhile back I was shopping around looking for a housekeeping service.  So I began listing the attributes important to me in such a service and out came the boxes.  In the first box or column was whether the cleaners were bonded, secondly I wanted to know how many were in a team, thirdly was how long they thought it would take and then finally came the price.  As I called around I began getting very similar answers to the first three questions so began comparing to price.

About my fifth call, something very unique happened.  As I was rattling off my criteria, the representative asked if she first explain their process before she answered my questions.  Of course, I was intrigued.  She began outlining EXACTLY what their cleaners do EVERYTIME they visit a home.  She started wooing me with dusting my doorframes, and perimeter cleaning all the rooms.  As she carried on I fell in love and price was NO LONGER an issue.

What she had done so effectively was pull me “out of my boxes” and began outlining what they saw themselves as their key difference.  

So how do you effectively pull your prospects out of the box? In other words, how do you define what makes you TRULY different.  Having done many surveys for my clients asking their customers this very pointed questions, I can tell you this. 9 times out of 10 it is in the little things.  

Ask Your Clients
No one can articulate your strengths better than your clients. So ask them (about 5 – 10 of your ideal clients).  Ask them why they chose you in the first place. Ask them why they continue to do business with you. Ask them how they would explain why you’re great to others. Ask them outright; what they think makes you unique in the marketplace.  The scariest thing we can do is assume we know what makes us special.

Identify Industry Frustrations
Here’s an eye-opener and a very humbling experience. Ask people (and your clients) what frustrates them about people in your industry. If they remain incredibly polite, then take yourself out of the equation and ask them what frustrates them about your competitors. If you are great at probing and uncovering the root of an issue, you will find ways to turn this frustration into a strong differentiation.

A lawyer for a large company here in Calgary asked his clients why they enjoyed doing business with him. He heard over and over again, that they felt he kept them in the loop.

Interestingly enough, one of the major frustrations this client had with other lawyers in general, is this feeling that they were keeping them a bit in the dark. Now this may have come out in various ways like, “I don’t trust them,” or “their service is poor.” It takes further questioning and probing to uncover the root of the distrust and poor service to realize it’s a communication issue. This lawyer had identified a “little thing” that made him VERY different in the eyes of his potential clients.

Survey Your Competitors
Finally, shop around with your competitors.  Pretend you are your ideal client and that you are looking for their product or service.   Ask them some typical questions that your clients would have in their “boxes” and then just before you finish, ask them these questions:

    Why should I choose your company over a competitor?
    What is your company’s unique strength in the marketplace?

Here is the good news.  You will find most of your customers DON’T differentiate themselves!  So go forth and discover what makes you TRULY different. It is one of the least expensive ways to gain an edge on your competitors and strengthen your position in the marketplace.

Printed with permission of Cidnee Stephen of Strategies for Success