Community Marketing Blog: The 7 Worst LinkedIn Mistakes and Their Fixes

December 01, 2009

The 7 Worst LinkedIn Mistakes and Their Fixes

Mistake

Over the last two years I’ve written often about the tips and strategies to more effectively utilize LinkedIn.  It’s just as important to consider the mistakes that people make on LinkedIn that will affect their success.  Many of these mistakes are often errors of omission.  Today I’m going to discuss seven mistakes and then I’m going to show you how you can correct them.
 

Let's get started.

1.  Bad Photo Choice

One of the first things most people do when they visit a profile is look at the photo.  Its natural to want to see the person behind the profile.  People connect to people and a photo helps improve your visitors perception.

One of the worst mistakes is to not include a photo.  What does it say about you as a business professional if you don’t understand the importance of the profile photo?

Another mistake I see is that someone decides to include the family in their photo.  That’s fine on Facebook but on a professionally based network it misses the point.  Add to this photos with effects or simply unclear.  If someone can’t see your face or recognize you there is a problem.

Finally avoid including a logo or product shot.  The same advice goes for cartoon photos.  Its a professional site.  You’re a professional.  Your photo should support your brand.

The Fix

Spend $25 with a local photographer and get a professional quality headshot.  If you choose to take your own photo make sure you have proper lighting.

2.  Lack of Detailing Your Profile

Your profile isn’t meant to replace your resume but it should tell your visitors who you are.  There are some key areas that not only allow you to tell your story but provide an opportunity to add keywords naturally into your profile.

The first opportunity is your summary.  I like to start my profile off with my elevator speech.  This short sentence has been refined to capture attention when presented in face to face networking.  There’s no reason it shouldn’t work the same on your profile.  The rest of your summary should answer the questions of “Who you are”, “How you help people”, and “How they can help you”.

One area of missed opportunity is failing to add in your previous employment.  First people want to know the path you travelled from college to your current position.  Not including this introduces questions into your profile visitors perception.  There’s also the lost opportunity to include keywords into your job descriptions.

There are also some other areas to add information to such as specialties (great place for keywords), Interests, Awards, and don’t forget to include your phone number and your personal contact information (phone number and address if relevant).

You never know how someone will find you

The Fix
Include as many previous employers that are relevant to your development as a business professional.  It’s OK to skip that college job delivering Pizzas.  Also be sure that when you write the job descriptions to write them from the perspective of how that job contributed to making you better at what you do today.

3.  Ignoring Applications

When you look at the number of applications on Facebook (1,000’s) verses the number on LinkedIn (13) you might think that applications just aren’t that important.  That would be a bad analysis.  While few in number, the applications available are a key to sharing what it is that you do with your fellow LinkedIn members.  They provide the opportunity to take your profile from two dimensional to three dimensional.

The basic LinkedIn profile is simply a lot of text.  Sure you can tell people all of the relevant information about yourself, but I always recall my freshman English teacher imploring me to “Show, don’t tell”.  Applications give you the opportunity to show what it is that you do.

Applications give you the ability to post a PowerPoint or Keynote presentation (Slideshare or Google Presentations), add a video (Slideshare or Google Presentations), feed in your blog (WordPress and BlogLink), add PDF files or Word documents (Boxnet), announce and RSVP Events, conduct Polls, share the books you’re reading (Amazon), and the just released Twitter application.

Just about any way you want to communicate a message or information on LinkedIn is available.  Your profile visitors can engage with your profile in print, video, even audio (add your podcast to a PowerPoint or Keynote presentation.

The FIx
Start going through your resources to see what information will help you show others what it is that you do and how you can help them.  If you don’t have a blog WordPress makes it simple to create one.  It’s simple to create a presentation to share, just be sure to make it interesting by including more than just bullet points.  Load up those brochures, white papers, and one-pagers.  

Finally, add a video to your profile.  If you don’t have the tools to record yourself in a professional manner (think lighting and sound), go to http://www.jing.com and download this free software.  It will allow you to record a 5 minute screen capture as a video.  The hardest part is figuring out what to record.

4.  Not Securing Recommendations
When I visit at a profile one of the first things I look for is recommendations.  There’s no reason why anyone shouldn’t be able to build up to 10 recommendations if they’re good at what they do.

The reason most people fail to get any recommendations is that they sit back and wait for someone to take the initiative.  You have to remember that only 24% of the people on LinkedIn are regular users (spend at least 5 hours a week interacting), so the majority of your connections are still trying to figure it out.

These irregular users probably haven’t thought about recommending someone else because they’re still trying to understand LinkedIn.  

The Fix
Get proactive about generating recommendations.  Whenever I start working with a new prospect one of the first things that I do is connect to them.  Then once I’ve finished serving them, or moved to a point where I’m delivering results, I send them a recommendation request. 

I keep the request simple and reference the work I did for them and then state “I’m using LinkedIn to build my online brand.  If you feel the work that I did on your behalf exceeded your expectations I would appreciate your taking a moment to write a brief recommendation”.

There are some people that feel that you should not do this, but based on the response, and the recommendations, I’ve received from clients I don’t see a downside to sending the request.

I prefer client recommendations but if your position doesn’t involve clients then you’ll have to impress your fellow coworkers and business colleagues.

5.  Fail to Join Enough Relevant Groups

There was a time on LinkedIn when you could belong to as many groups as you would like.  These days there is a imposed limit of 50 groups, yet many people have not yet joined any groups.  Failing to do so severely limits your LinkedIn reach.

Currently I have 4,500 direct connections on LinkedIn so at any moment I could reach 4,500 people.  In the 50 groups that I belong to there are over 1.3 million people.  These are people that I can communicate directly to or through using discussion posts and news articles.  

Groups are also a great place to engage in conversations and cultivate new relationships.  The key is to find as many groups as possible that are relevant to your business.  

The FIx

Go to the groups directory and search for relevant groups.  These might be groups that are alumni, industry, location, networking, topical, etc.  Be sure to think about the groups your prospects would belong to and join these.  Then you simply need to start engaging fellow group members through discussions and news articles.

6.  Overlooking Answers

One of the keys in social media/networking is to seek out opportunities to share or provide value to others.  LinkedIn Answers is the perfect vehicle to do so.  Each day thousands of new questions are asked by fellow members looking for help.  You simply need to find the questions that surround your industry or specialty and share your knowledge.

There are several benefits to answering questions.  First you’re building good will with the person who asked the question and potentially everyone else that reads your answer.  Second you have the opportunity to demonstrate your expertise.  

Your answers are also Linked to your profile which is then viewable by profile visitors.  Let’s say you’re a health insurance broker that only sells in Georgia but you answer a question from someone in Louisiana.  The person that asked the question will never be your client but at least you were able to help someone (Good Karma).  But since your answer is Linked to your profile, anyone in your local area can see your answer and it can impact their perception of you.

The Fix

Go to LinkedIn Answers and search for questions related to what you do for a living.  Then start answering questions.  Be sure to include a link back to your site or blog in your answer.  I find that when I answer a question traffic to my blog increases.

Most categories also have a RSS feed.  You can set up a RSS reader that will display the latest questions asked in the category.  Using the Google RSS reader I simply check for new questions every morning and answer away.

Just be sure to provide quality answers.  Everything you do or say on LinkedIn either adds to or subtracts from your brand.

7.  Selling Directly

I’m sure that on LinkedIn someone is having success posting direct sales messages or sending messages to their connections.  That being said you are more likely to do harm to your brand over time.  People are not looking to be sold to directly on LinkedIn.  

That doesn’t mean that there are no opportunities to sell using LinkedIn, its just that you’ll find more success communicating your messages indirectly.  The one exception is with the status.  It will be interesting to see if this changes with the new Twitter integration.

The Fix
Take advantage of the opportunities to communicate your message indirectly.  One simple way to do this is to change your title to a tagline.  My title might be “Blogger” but “Helping folks use LinkedIn more effectively with tips and strategies at the Social Media Sonar blog”.  The title tells people what I am, the tag line tells them how I can help them.  Plus that tag line is visible in a mini profile when I answer questions, post discussions, or add news articles.

Starting conversation using the discussion boards is a great way to interact with fellow group members.  Adding news articles allows you to share value through the content.  Over time people will get to know you.  If they like your content they’ll begin to like you...and check out your profile.  Share value consistently over time and people will begin to develop trust.

We discussed Answers above and its another communication opportunity.  These are only some of the options available to communicate indirectly.  you can also use your applications including polls and events.

Wrap Up

Many of the mistakes I’ve detailed are simply errors of omission.  They can be corrected by simply taking some extra time to build your content.  Your first goal on LinkedIn is to get people to visit your profile.  Then once they’re at your profile page you want to ensure that they understand what it is that you do and how you can help them.

The worst thing that can happen is that they leave your profile with questions and move on to the next profile.

What are some mistakes I missed?

Posted by Sean on December 01, 2009 at 09:25 AM | Permalink ShareThis

Anyone on Linkedin needs to read this once a year to check and fix mistakes, and to help refocus maximizing one's networking efforts.

Florida is No. 12 for auto delinquencies - South Florida Business Journal:

Florida ranked 12th in the nation in the number of borrowers 60 days or more past due on their auto loans in the third quarter, according to a report by TransUnion.com.

The delinquency rate slipped to 0.99 percent from 1.1 percent in the same quarter last year. However, it rose slightly from the second quarter, when it was 0.92 percent.

Floridian’s average auto debt burden was $13,448, ranking 13th in the nation.

Nationwide, auto delinquency was highest in Mississippi, at 1.53 percent, and California, at 1.33 percent.

The lowest rates were in the District of Columbia (0.26 percent) and North and South Dakota (0.35 percent and 0.37 percent, respectively).

The nation’s average auto debt in the third quarter fell to $12,542 from $12,560 in the same year-ago quarter.

Nevada had the largest auto debt burden, at $14,721, followed by Texas, at $14,425.

“As in recent quarters, both the availability of funding in the market, consumer demand for auto financing and tighter lending standards have contributed to a significant decrease in the number of auto loans in the market, resulting in upward pressure on delinquency rates,” said Peter Turek, automotive vice president in TransUnion’s Financial Services Group, in a news release.

He added that TransUnion's forecasting models indicate that the national 60-day auto delinquency rate will rise to almost 0.9 percent by year-end, a 7.5 percent increase over the prior year.

The Future of Wi-Fi: sponsored access, 802.11n and WiFi Direct | MuniWireless

Three articles I want to point out to you that should get you thinking about the future of Wi-Fi:

(1) Andy Abramson’s long and thoughtful piece about sponsored Wi-Fi, sending party pays and the future of media in which he argues:

“Public Wireless” really takes hold, not from the telcos, or even the cable companies, but from the likes of Google, who understand how to monetize “free” better than anyone, and who also have the delivery billing system in place to bill back to a “sender” the same way they can bill back a click to an advertiser. Google, will then work with their “partners” in Clearwire, not to promote 4G WiMax as the pipe, but to use real WiMax in consort with companies like Comcast, Covad and TowerStream to deliver super fast Gigabit wireless to a series of access points around the country, where it then is distributed using WiFi. This is more than a likely scenario as Google has been a pioneer in Public Sponsored WiFi access for sometime, with their Mountain View WiFi network which has been up and running for a few years, surviving the failed Earthlink, MetroFi and other third party operator networks. By blending the “sponsored” public access model as Google has done with “sending party pays” the end user sees little or no cost.

(2) Network World’s eight ways 802.11n changes Wi-Fi

According to Network World, the approval of the 802.11n standard means improved security, higher data rates, better RF and interference management, use of Wi-Fi by devices never before associated with Wi-Fi, connecting to non-WiFi networks, personal area Wi-Fi (e.g. Wi-Fi Direct, which allows a Wi-Fi device such as the iPod Touch to connect directly to another Wi-Fi device such as a printer).

This is nothing new to those of you who have read Ken Biba’s articles on MuniWireless. If you have not read Ken’s articles, click on the links below:

The King is Dead, Long Live the King: 802.11n dramatically improves Wi-Fi outdoors

Real world measurements show muni Wi-Fi networks outperform WiMAX and cellular

(3) What Wi-Fi Direct means for Mac users: Glenn Fleishman has written a very informative article about how the Wi-Fi Alliance’s new Wi-Fi Direct standard greatly improves ad hoc Wi-Fi networking, that is, Wi-Fi connections between two devices (without the need of going through a base station).

Why conference Wi-Fi sucks and how to improve it | MuniWireless

I was inspired to do a long article about Wi-Fi at conferences by Joel Spolsky’s article Wi-Fi At Conferences where he asks why Wi-Fi works so poorly at tech conferences. Muniwireless has organized conferences in the past and I won’t say that the Wi-Fi at our events has ben the very best either (however, it was better than at most events I’ve attended). You would think that by now, Wi-Fi access at conferences, especially tech events, would be something no one would even notice — that is, it should just work well. But that’s rarely the case.

Dewayne Hendricks (who has provided Wi-Fi at David Isenberg’s Freedom To Connect events in Washington DC, Social Capital 2009 in San Francisco, West Coast Green 2009 in San Francisco and others) pointed out that in many hotels and conference centers, the existing Wi-Fi network can handle only 20 to 25 connections at one time and the bandwidth for the network is barely enough for people who are downloading and uploading data. Conferences today have to deal with people who are updating blogs, Twitter feeds, and Facebook pages, and who are sending photos, video clips, and reports. Some attendees are also using Skype and other VOIP applications. Unfortunately, many venues are too cheap to install new 802.11n access points, and because the bandwidth that feeds into the network is too paltry, the conference organizer – if it wants to guarantee a good Wi-Fi experience – will have to bring in both the access points AND the bandwidth (for example, Covad). This dramatically increases the cost of hosting an event. (Note: Dewayne used Apple Airport Extreme 802.11n access points which worked very well at the Freedom to Connect event held in March 2009 at the AFI Silver Theater in Silver Spring, MD. I attended this event and would rate the Wi-Fi experience outstanding.)

Here is a sample quote (dated September 2009) from a well-known bandwidth provider for bringing in (wireless) bandwidth into a venue (each amount quoted below is a one-time fee). This is just the bandwidth; it does not include the access points, the fee charged by the Wi-Fi service providers for installing the access points, managing the event’s Wi-Fi network, dealing with problems and meltdowns, etc.

  • 5 Mbps: $3999
  • 10 Mbps: $5999
  • 20 Mbps: $9999
  • 30 Mbps: $11,999
  • 45 Mbps: $16,999

Andy Abramson, founder of Comunicano, agrees with Dewayne’s assessment of hotel Wi-Fi and adds that most hotels have less than 5 MB of connectivity. Some hotels limit the number of users to 250 concurrent users. Andy believes that hotels have not realized how much Wi-Fi means to an event’s (and the hotel’s) reputation. Most conference attendees rate Wi-Fi connectivity as one of the three most important needs at a conference.

Q&A with Tim Pozar on how to improve conference Wi-Fi

I wanted to unravel the mystery surrounding what it takes to bring good Wi-Fi to conferences by asking Tim Pozar, a network engineer who has been hired by conferences such as TechCrunch 2009, Intel Developers Forum, SNAP and more. Below is our Q&A.

(1) Why is Wi-Fi service so horrible at most conferences, including at hotels where there’s already Wi-Fi and/or wired broadband? What can you do to improve Wi-Fi service?

There are several reasons. In the case of built-in Wi-Fi at hotels, they really don’t design it for conferences. They design it for general guest use around the hotel. They install a minimal set of access points and don’t use a number of the tricks we have used for conferences. Also, on-site hotel staff usually do not have technical expertise to address issues. Most of these installs were done by third parties that may not currently have a support contract with the hotel. If they do, or if the hotel supports it, it is done off-site by some remote network operations center (NOC).

Where a conference organizer brings in an company to provide Wi-Fi access and the network fails, it can be for a number of reasons. Typically I see small companies that are trying to grow larger and don’t test the deployment or think through all the failure points that can happen with a large-scale deployment. When I was called in to solve the Wi-Fi problems at TechCrunch 2008, the wireless provider had some serious problems, not the least of which was the DHCP server they were running, which only supported 250 or so leases. Needless to say, that alone stopped the use of the wireless network pretty early on in the conference until I came in to fix it.

I also notice that many vendors just don’t understand RF propagation and how to manage it. They think that more is better: more access points and/or more power. In most cases, this is the opposite of what you want to do as it just congests the spectrum even more. There are a number of tricks that we use at MSI to try to manage the spectrum.

Redundancy plays a big part of a deployment. If you have a conference that depends on broadband for the success of the event, you can’t have a single point of failure. Having multiple transit providers, DHCP servers, etc. are critical as things fail all the time. Having any service fail will likely make the deployment unusable and worthless for the event organizer.

(2) Why haven’t hotels and conference centers done much to improve the quality of wireless broadband for conference organizers who are already paying a lot of money to host events at these locations?

Good question. It seems that large hotel chains could make this a profitable item, but as with most hotels, they figure they have a captured event and don’t need to put any more effort into this. Also, as mentioned above,
they have had third parties come in and do the deployment. One size does not fit all events and they almost never have technical staff on site to address the problems of this deployment because it costs too much to keep them on the hotel’s payroll.

(3) Why do most conference organizers fail to provide good Wi-Fi? Ignorance? Cheapness? Both?

Both. You get what you pay for. MSI’s deployments include a significant staff that can deploy and address problems during the event quickly. The network engineers that MSI uses (including me) are veterans of decades of networking experience. I have seen a number of wireless providers who think all they need is a broadband connection and some access points thrown around the location. Of course, it is much more complicated than that.

Event organizers don’t have the technical background and skills to do the “due diligence” to see if a vendor has the ability to pull of a deployment. They really need to look at the vendor’s track record with similar deployments and many just don’t have the time. In other cases, the event organizer will choose the wireless vendor who is offering the cheapest solution.

(4) What advice would you give conference organizers? What should they look for, what questions should they ask the hotel or the company they are hiring to bring in Wi-Fi to the conference?

As mentioned above, look at the track record of the company. Ask for references. Ask for previous event’s reports. (MSI always creates daily reports on an event, including bandwidth and number of users. It also includes problems encountered.) Ask them about their technical qualifications. Have they done similar events? How many people attended these events? Were they “tech” events where everyone shows up with multiple devices — laptops, smartphones, etc.?

Meet with the company and discuss the event’s requirements. Ask them how they would deploy the network in detail: where they would place access points, how they are going to bring in bandwidth. Ask them about
redundancy such as transit providers, equipment, staffing. Ask if the gear they are going to deploy has been used at events of similar size recently. Ask them about how they will deal with outages and problems. Will they provide a high-level network engineer at all times? How will they be reached during the event?

(5) In terms of costs for providing Wi-Fi at an event, how much should a conference organizer budget (taking into account  the number of attendees, size of venue, type of event — obviously a conference around streaming video/entertainment would suck up more bandwidth)?

This can vary greatly from $2000 a day for a small event (up to 300 people) and no redundancy; to $100,000 and more per day for larger events (up to 30,000 people) that could take over a conference hall like Moscone Center in San Francisco, and a serious build out that would address multiple failure points.

Tim Pozar has been a network and RF engineer for more than 20 years. Past projects, besides broadband deployment for conferences, are a 30Mb/s, 50Km connection the the Farallon Islands to support personal on the island and a live streaming camera for the California Academy of Sciences. Currently he is designing and deploying a city wide fiber network for the City of San Francisco. Pozar also designs and deploys VoIP networks for national teleconferencing companies and high reliability Internet networks for enterprise and ISP companies.

I have made this article into a PDF file posted on Scribd so you can download it, print it, send it around.


Ex-Factors - CFO Magazine - April 2009 Issue

Ex-Factors

An upstart exchange offers a new option.

S.L. Mintz - CFO Magazine

April 1, 2009

While hoping to complete a second round of equity financing last fall, Data Drive Thru faced a cash squeeze. Needing capital to exploit rising demand for a patented high-speed data- transfer technology, CFO Brad Oldham had two viable options: increase debt or sell receivables. But a frozen credit market made traditional bank loans extremely difficult if not impossible for the company to access, and selling receivables to a traditional factor would surrender too much cash flow.

So the company turned instead to a new online exchange that does for receivables what eBay does for consumers' used merchandise: auction it off. Live since December, The Receivables Exchange is an online bidding platform that touts greater control, faster remittances, wider access to global buyers, lower transaction costs, more transparency, and less documentation than other methods. It will accommodate amounts as low as $10,000.

Unlike eBay, however, buyers don't end up taking physical possession of a product. Instead, they bid the amount they will pay for the receivables. The pricing is based on the risk of remittance. Gold-plated receivables, such as those issued by Wal-Mart, command the highest prices. Size of advance is also a factor — around 85 percent for good credits. The Receivables Exchange validates all parties.

The service's primary appeal may be to small and midsize companies holding IOUs from big companies with sterling credit. Oldham is happy with his initial experience; his first auction, in December, found a buyer willing to extend him $100,000. The next morning, Oldham had cash in hand on terms he liked. Over the course of several transactions, he has trimmed the discount rate to less than 3 percent.

One buy-side portfolio manager calls exchange-traded receivables a brand new asset class. In sharp contrast with Wall Street's fatal appetite for excessive leverage and complexity, says Bill Andersen of Andersen Capital Management, The Receivables Exchange exemplifies "the good side of financial innovation — bringing together buyers and sellers who would not have met otherwise."

Quorum Technical Services, which provides IT staff to global corporations, uses The Receivables Exchange to augment its $200,000 line of credit. Founder and CEO Jack Karamanoukian says that Quorum tallies its invoices on Fridays and posts them to the exchange on Mondays. When totals exceed the $10,000 threshold, bidding can begin. The fastest trade so far: $19,000 in 28 minutes.


Borrowing Against Receivables Gets Cheaper, Easier

By SIMONA COVEL

Data Drive Thru Inc. was on a roll. The Dallas company had received $1.5 million in start-up money from an angel investor. Its signature product, a tool to transfer data from one computer to another, won an award at a trade show and landed on shelves at big-box stores like Staples.

But the company hit a financial wall in the second half of last year. A second round of angel funding, expected to come in at $7.5 million, fell through as credit markets froze. The company was too young to have the well-established cash flows needed to get a bank loan, and retail customers were taking longer and longer to pay—as many as 30 extra days in some cases.

The Journal Report

See the complete Small Business report.

“Everyone is holding onto cash as much as they can,” Chief Financial Officer Brad Oldham says.

So Mr. Oldham took an unconventional step: He listed the company’s accounts receivable—invoices due to be paid by the big-box stores that buy Data Drive Thru’s products—on a new online auction site called the Receivables Exchange. Anonymous lenders bid on those receivables, agreeing to lend Data Drive Thru money against them and then take a cut when customers pay the bills.

Borrowing against receivables isn’t new. For hundreds of years, cash-strapped companies have hired people or companies known as factors to advance them funds based on money owed by customers. But with interest rates sometimes exceeding 30% or 40% annually and tales of unsavory business practices, this small corner of finance is considered by many to be a funding source of last resort.

A few companies are trying to change that with products and services designed to make the process of borrowing against customer invoices cheaper and more transparent. These products are gaining ground in the recession as companies—particularly small, untested ones—find their credit lines cut and other sources of funding gone.

Mr. Oldham had worked with factors before and didn’t like the high prices. But he knew Data Drive Thru’s receivables were valuable; the company regularly collects hundreds of thousands of dollars from big, well-known office-supply stores. “Retailers may not be real fast paying, but they do pay,” he says.

That’s the ideal scenario for Receivables Exchange LLC, which launched its first online receivables auction in November. The New Orleans company—executives describe it as eBay for receivables—provides the platform for companies like Data Drive Thru to post their invoices. Lenders then peruse the site, searching for receivables against which they are willing to lend. Lenders bid on those invoices, with the majority electing a fixed buyout price similar to eBay’s “buy it now” feature.

The next day, the borrower is wired the money, minus the lender’s fee, which might be two, three or four cents on the dollar. Receivables Exchange, which is in the background verifying that the invoices are real, takes a varying percentage commission on each trade.

While the credit crunch has buoyed Receivables Exchange’s growth on the borrowing side—the company has 200 customers and says its sweet spot is a firm with $10 million to $100 million in revenue—it also has translated into fewer lenders. Exchange co-founder Justin Brownhill says he expected to see 20 times as much demand as supply on the exchange. Instead, with $7.5 billion in invoices and $15 billion in available capital, it’s about a two-to-one ratio, largely because banks haven’t stepped up as much as expected amid their own vast problems.

Hedge funds have made up for some of the lag. As many as 40% of the lenders on the exchange are hedge funds looking for solid returns as other types of investments sag. Banks, asset-based lenders and factoring companies each comprise about 20% of the lending base.

Borrowers don’t know who’s providing the loan. Mr. Oldham, for one, says he doesn’t much care. In the past few months, he has posted hundreds of thousands of dollars in invoices—usually at least one auction per week—in exchange for a cash advance. Participating in repeated auctions with a solid payment history has bolstered his company’s reputation on the site, which in turn has lowered his cost of capital to less than 3% every 30 days, down from 4% in the beginning.

“Every auction I’ve had, it closes one day and the money is wired to my account” the next day, Mr. Oldham says. “It doesn’t matter to me who it is.”

Keeping It Real

While the generally steady cash flow from receivables appeals to bank lenders, many say they just don’t have the infrastructure or manpower to monitor each borrower’s customers to make sure their invoices are up to snuff. That’s where FTrans Corp. comes in. The Atlanta technology company offers a sort of virtual clearinghouse for companies, their bankers and their suppliers. A company posts its receivables on FTrans’s online system, and FTrans verifies that the invoices are real, giving banks enough information to lend against them.

“Typically a community bank does not have a department set aside to do that,” says David Dunbar, the chairman and chief executive at Synovus Bank in St. Petersburg, Fla., a member of Synovus Financial Corp.’s regional-bank system.

For a bank customer to qualify for a receivables-based credit line, it generally would need to offer full, audited financial statements, which most small businesses don’t have. Indeed, when FTrans first presented the system to Synovus bankers about two years ago, a few executives voiced concerns about whether FTrans would be able to sufficiently monitor invoices to make sure they were real, says Mr. Dunbar. So far, he says, there have been no major problems.

The bank, in an attempt to branch out from real-estate lending, is now aggressively pitching FTrans-facilitated receivables lending to new and existing clients, many of whom wouldn’t qualify for other types of commercial loans, Mr. Dunbar says.

Today, a year and a half since Synovus first implemented the FTrans system, more than three dozen clients from the bank’s three commercial offices are using it. The bank has a right to choose how much of each invoice it is willing to advance—maybe 90% for a well-known retailer but only 70% for a lesser-known company that seems like a greater risk. Borrowers typically pay between 1% and 3% on each transaction, Mr. Dunbar says. The bank and FTrans each take a chunk of that.

FTrans also administers a handful of loans on its own. That’s the case for Billy Teagle, president of Atlanta-based retail-merchandising company Rocket Retail Merchandising LLC. In October, Mr. Teagle went to his bank to ask for a $300,000 line of credit to fund a geographic expansion.

“They wouldn’t give me the time of day, despite having four years of profits,” Mr. Teagle recalls.

Mr. Teagle called FTrans, and they set up a line of credit, secured by receivables, with a $300,000 limit. He estimates that he’s financing as much as $75,000 each week through FTrans, inputting invoices into the FTrans system when he bills clients and borrowing against them until his customers pay. Mr. Teagle says he had a problem when a client paid a $25,000 bill 30 days late and he was forced to pay the interest on the loan for the extra time. If multiple customers did that at the same time, it would be a problem. So far, though, that has happened only once.

Getting Big-Company Rates

With buyers anxious to extend payment terms in tough times, some are turning to Atlanta’s PrimeRevenue Inc., a supply-chain finance company. PrimeRevenue works with large companies—from car makers to retailers—that want a few extra days to pay their hundreds of small suppliers. Through a network of bank partners, PrimeRevenue will advance the money owed to the small suppliers, at an interest rate that’s based on the credit standing of the bigger buyer company—generally a single-digit annual rate, PrimeRevenue says. PrimeRevenue’s fee is wrapped into that rate; the rest of it goes to the banks that provide the financing. Suppliers can log into the program, look at their future-dated receivables and either elect to wait for the buyer to pay the bill, or click a button to get an advance.

Small suppliers can’t just ask to be in the program, however. The bigger buyer company has to initiate the system and pay a fee to participate. Today, PrimeRevenue services 40 big global companies or units of those companies, up from about 30 early last year.

For small suppliers, the program offers an opportunity to land financing at rates based on the credit quality of their big customers, instead of the higher rates generally offered to smaller companies. When a big industrial customer told executives at metal-stamping company Universal Metal Products about PrimeRevenue, “our initial reaction was skeptical, because whenever you hear of this type of thing you think of some kind of back-room factoring house,” says John Rapacki, the Wickliffe, Ohio, company’s controller. But the rate was much lower than a factor, and Mr. Rapacki liked the ability to use the system without a fixed commitment. (Universal Metal Products’ large customer doesn’t want to be named; some participating companies would rather not admit they are extending payment terms.)

The ability to pick and choose when to use the system for financing has proved critical in recent months as rates have marched higher amid uncertainty in capital markets, Mr. Rapacki says. At the beginning of 2008, the interest rate on his receivables was around 3%, and Universal Metal Products would regularly take advances on payment. These days, it is closer to 10%, so the company rarely taps into the financing.

--Ms. Covel is a staff reporter of The Wall Street Journal in Chicago. She can be reached at simona.covel@wsj.com.

Black Friday online sales up 11% - South Florida Business Journal:

Online sales were better than last year’s Black Friday, according to initial data from Internet tracking firm comScore.

The Reston, Va.-based company says e-commerce sales Friday were up 11 percent, totaling $595 million – the second-best online shopping day of 2009. While most retail stores were closed on Thanksgiving Day, the Internet is always open, and online sales Thursday totaled $318 million, up 10 percent from last year.

ComScore’s e-commerce totals do not include travel or auction sales.

“While this acceleration in spending suggests the online holiday season may be shaping up slightly more optimistically than anticipated, it may also reflect the heavy discounting and creative promotions being put forth by retailers that now encompass the use of social networks such as Facebook and Twitter,” said Gian Fulgoni, chairman of comScore.

Monday, known as Cyber Monday, is traditionally the strongest day for online retail sales.

Last week, Florida Retail Federation President and CEO Rick McAllister suggested consumers were feeling better and that early sales have retailers painting a brighter holiday season.

ComScore (NASDAQ: SCOR) has predicted that overall holiday sales online, encompassing transactions in November and December, will total $28.9 billion this year, up a modest 3 percent from 2008. Online holiday sales in 2008 were down 3 percent from the previous year, the first decline on record.

Amazon had the most visits on Friday, up 28 percent from last year. Wal-Mart, Target, Apple and Best Buy were the next four most-popular sites. Apple’s traffic was up 39 percent from last year, the biggest year-over-year gain among most-visited sites.

Miami ranked among worst cities for jobs - South Florida Business Journal:

Miami ranked among the 10 worst cities for job seekers in November, moving to fifth place from fourth in October, according to an index by CareerCast.com and JobSerf, which measures U.S. managerial recruitment activity.

Tampa Bay replaced Miami in the No. 4 spot. Topping the worst cities list was Riverside, Calif., followed by Detroit and Memphis.

If you’re looking for a job, Washington, D.C., is the place to be, topping the list of best cities to find one. Boston, San Francisco, Seattle and Atlanta round out the top five.

Nationwide, after two months of declines, there was some positive job growth, as the national volume of managerial openings online increased by 5.9 points to 73.7.

The index scores against a base year of 2007, in which the number of job listings available online during each month of 2007 equals 100 points. That means that a score of less than 100 indicates the number of job listings for a given month is less than during the same month in 2007, while a value greater than 100 means that more jobs are available than were during the same month in 2007.

New tax rules allow businesses to get carryback on recent losses - South Florida Business Journal:

Friday, November 27, 2009

New tax rules allow businesses to get carryback on recent losses

South Florida Business Journal - by Oscar Pedro Musibay

Oscar Pedro Musibay
Public relations expert Jorge Martinez goes over tax changes that impact his firm with accountant Saul Silverman.
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Despite an uptick in its revenue, companies like the Conroy Martinez Group might still be able to take advantage of tax rules that allow it to use current losses to get a refund.

Public relations expert Jorge Martinez said his clients, like all businesses, are struggling in an economy that has yet to recover locally. Fortunately, his company was able to bring in new business and expand services to existing clients to make up for clients that didn’t renew contracts in 2009. As a result, it generated higher revenue in 2009 than last year.

Saul Silverman, a partner at Goldstein Schechter Koch in Coral Gables, said the federal government has enacted changes that are helping companies that would not be eligible otherwise to get money back.

For example, tax rules from the last two years allowed small businesses – those generating less than $15 million in gross sales – to apply recent losses toward net income going back five years. New rules would potentially allow all business to be eligible for the same carryback of recent losses, with businesses generating greater than $15 million in gross sales having some limitations.

Bob Dreker, managing director of CBIZ MHM in Boca Raton, said the key for accountants is to figure which year is the best one to get the carryback.

“If they had a good year a few years ago, they were in a higher tax bracket,” he explained. “That is the one we want to choose and get the refund.”

Another important tax rule that might help businesses in the coming tax season involves the sale of assets. A typical corporation converting to S-corporation status that sold an asset anytime during a decade would have to pay a capital gains tax at 35 percent. Recent changes allow S-corporations to be exempt from the 35 percent rate after seven years.

Businesses buying equipment can also write off some of the purchase price, but the discount will soon be smaller, so companies should take advantage of the larger discount while its still available, the accountants said.

Gary Gerson, senior partner at Gerson Preston & Robinson, said clients are anxious about the impact of health care legislation under debate and fear higher taxes specially increases in capital gains.

He said he expects Congress will raise estate taxes, which would soon be down to zero, to make up for new programs like health care.

“They are going to have to do something in 2010 and make it retroactive to Jan. 1,” he explained. “They are not going to let anybody die without paying estate taxes.”

He also said families with portfolios of assets are rushing to create family limited partnerships to take advantage of the sale of stock in the partnerships at a discount of 35 percent to 50 percent. His clients fear that will change in the near future, and the concerns are driving the demand for establishing family limited partnerships sooner, rather than later.

Gary Jenkins, managing director of RSM McGladrey, said he’s optimistic – and so are his clients. He said that Congress is sensitive to the struggles of both large and small businesses, and has given them tax tools to help them deal with cash flow issues.

Said Jenkins: “We want to prepare clients so they can grow quickly when the economy turns.”


omusibay@bizjournals.com

Virtual assistants help professionals handle the heavy load - South Florida Business Journal:

Friday, November 27, 2009

Virtual assistants help professionals handle the heavy load

South Florida Business Journal - by Jeff Zbar

Robert U. Craven has been the CEO of large companies and led teams of employees working from corporate offices. But, when he scaled back to launch ScalePassion LLC, a professional coaching company, Craven found he needed one part-time employee: an administrative assistant to take on much of his day-to-day planning, organizational and technology needs.

It didn’t matter whether the employee was on site or remote. So, Craven hired a virtual assistant to handle tasks that otherwise would have consumed his time and focus.

“My biggest need was someone to handle my calendar, book my travel and manage my schedule,” said Craven, principal of the North Palm Beach-based firm.

Virtual assistants (VAs) are finding favor across the business and professional landscape. From small or closely held companies that need tasks handled – but not necessarily by a full-time employee – to individuals who need a “personal concierge” to oversee errands and other personal errands, VAs provide services that free up clients to pursue profitability – in money or time.

VAs often include stay-at-home moms and seasoned administrators who were laid off during the recession. Most are looking for income or balance – and have a skill to sell, said Stephanie Goldberg Glazer, owner of Your Personal Manager. The business, which debuted in 2006, today helps about 20 tri-county area businesses and individuals “organize your life, free your time.”

Using little more than a broadband Internet connection from her Hollywood home office, Goldberg Glazer taps tools like LogMeIn or GoToMyPC to access client computers and manage their own customer databases.

Doing tasks others prefer not to

Goldberg Glazer sees some clients each quarter, and some no more than once a month. She generally does tasks they’d prefer not to, like package a direct mail campaign or update their social media status. With about 40 percent of her clientele being individuals with non-business tasks, some quirky requests come in – like dog sitting.

“I don’t do pets,” Goldberg Glazer said. “You have to know your limits. The most important thing I can provide is service.”

The cost: about $60 an hour. Money well spent, said Paula Holland De Long. She has used Goldberg Glazer since late 2009. Today, she attributes a 10 percent increase in income at What’s Next For My Life?, a cancer survivor coaching firm in Wilton Manors, to being able to focus on the 80 percent of her business that makes her money.

“When you’re growing a business, there’s only so much you can do,” she said. “Stephanie helped me clear stuff off my desk so I could focus on things that will make me money.”

That includes handling uploading events to Holland De Long’s Web site, updating her social media, and entering new contacts into her database. What else? When Holland De Long’s printer died, Glazer Goldberg handled the repair. And she sliced her workweek from 60 hours to about 40 hours. Holland De Long had to learn to delegate, as well as use her newly found hours wisely.

“To make this profitable, you have to reinvest your freed hours in something that will be profitable,” she said.

Not a problem for Craven. His assistant – from her home and using little more than a laptop computer and an e-mail account branded with Craven’s ScalePassion.com address – arranges appointments and interviews with prospective clients and other coaches.

Looking to hire a VA? Know your needs. Craven needed someone comfortable with e-mail, some technology and juggling of various tasks, but bookkeeping wasn’t important.

Though he currently pays about $15 to $20 an hour, Craven is looking to embrace even more “labor arbitrage” by hiring VAs from the Philippines, he said. Then, his VA will manage a team of offshore VAs, who can cost about $6 an hour, he said.

“I feel proud that I’m reaching into a community that’s used to making minimum wage,” said Craven, whose business often serves “change the world” entrepreneurs in socially responsible businesses and causes. “It’s important to find someone who’s very talented and cultivating her talent.”


Jeff Zbar covers marketing, technology and small business strategies. Contact him at jeffzbar@gmail.com.