Thursday, January 21, 2010
This post has nothing to do with the law, and so I am wholly unqualified to opine–yet I shall opine regardless.
This article is a classic example of pointing out a practice that, once it’s pointed out, seems obvious–yet few companies actually do it, and do it well. The gist: Many companies are good at developing new leads; and many companies (sometimes even the same companies!) are good at closing deals. Few companies are good at converting new (i.e., “cold”) leads into ready-to-commit (i.e., “hot”) leads; instead, most companies initiate the first contact with leads, then wait for the lead to spontaneously combust into a ready-to-sign customer.
Clate Mask, the author of this article, reminds us that each contact with a potential customer warms them up a little; and while a very small percentage of “cold” leads become “hot” leads, you can increase this percentage if your frequent (but not annoying!) contacts move the customer from cold, to cool, to tepid, to lukewarm, to warm, to hot. It’s therefore a good idea to focus as much on cultivating existing leads as you do on generating new leads.
The smallest of the small businesses–those that employ between one and five people, and currently are getting health insurance through the Small Business Service Bureau–will soon be saving a little money on their employees’ health insurance.
The Boston Globe reports that the Health Connector will be taking over administration of the program from the Small Business Service Bureau, resulting in a reduction in the per-employee administrative fee from $35 per month to $10 per month (the participating insurance companies will pay the other $25 per month to the Health Connector).
$25 per employee per month isn’t a huge amount in light of the high costs that small businesses incur in providing health care; but every little bit helps, no?
SBA-guaranteed lending was significantly higher in the last quarter of 2009 when compared to the last quarter of 2008. As reported by the L.A. Times:
“A total of $3.8 billion in 12,393 SBA-backed loans was distributed throughout the U.S. from Oct. 1 to Dec. 31 of last year, up from $1.9 billion by way of 9,070 loans a year earlier…”
This could mean good things for startup companies seeking capitalization assistance in 2010; or it could mean nothing more than that the last quarter of 2008 was catastrophically bad across any number of metrics, including small business lending. So, it could mean something, or nothing. Not particularly helpful, I’m afraid.
Thursday, January 14, 2010
“Don’t worry about it, this is just our boilerplate. No, it’s not negotiable.”
“All that small type printed in light-gray on the back of our invoice? That’s just our standard terms, don’t worry about them. Just sign where indicated.”
We’ve all heard this from customers and vendors. Many of you likely don’t bother to read the “small print”, and if you do read it, you probably wonder whether it’s intentionally dense and inscrutable; the words may all be in English, but string them together and you have complete gobbledygook.
Unfortunately, this “boilerplate”, those “standard terms”, they really do matter, and they can have a significant impact on your company. They allocate risk between you and your customer/vendor, and they can limit your rights to sue and collect if the other party misbehaves. When they’re the other party’s terms, they are often very one-sided and, frankly, unfair. And, they often ARE negotiable, if you try hard enough (and if you’re reasonable in your demands).
In this blog, I will periodically be discussing common contract terms, what they mean, and how they can be negotiated or modified, in a recurring feature called “What did I just sign?”
Tuesday, January 12, 2010
Good article in BusinessWeek about a “new” federal program (approved as part of last February’s stimulus package, but not yet active) designed to encourage small business lending.
The Small Business Administration will, for the first time, provide guarantees for 504 loans sold into the secondary market. It’s common practice for lending banks to bundle groups of loans together and sell them to investors; unfortunately, asset-backed securities haven’t been very popular recently, since the collapse of the mortgage-backed securities market. The SBA’s willingness to guarantee these bundles makes them more attractive to investors, therefore making it easier for banks to bundle and sell small business loans, which in turn makes the banks more willing to lend to small businesses. At least, that’s the theory; it remains to be seen how this will play out in practice.
The 504 loan program is one of many types of assistance provided by the Small Business Administration. It’s designed to help job creation by providing financial support for business expansion. Information about the program can be found here.