Monday, March 18, 2024

Live - Quickest way to find a business in the UK with Alfie Lambert- Bizcrunch.co


Quickest way to find a business in the UK.

New Livestream guest-> Alfie Lambert.

I’m happy to have Alfie join me on a live broadcast.

He’s the co-founder of BizCrunch.co, an online tool that makes it easy to find exactly the business you’re looking to buy in the UK.

Tune in and as we’ll be discussing the hows and whys of his new BizCrunch tool.

This is a ‘must see event’ for searchers in the UK.

Be sure to join live so that you can ask questions, replay will be available.

Also, Alfie has set up a special offer for any of you who want to try out the service.

Tune in and get the link/discount code.

Set yourself a reminder on YouTube here: https://youtube.com/live/b5VMMhT_Szo 

We’ll be going live Monday March 18, 2024 1PM Atlantic, 12 Noon Eastern Time

See you there!

David C Barnett


 

Saturday, March 16, 2024

The ABCs of Factoring in Business

Today, let's dive into the world of factoring – a financial tool that can be a game-changer for businesses dealing with accounts receivable. Watch the full video here:


So, what exactly is factoring? In simple terms, it's a financial process that allows companies to transform their accounts receivable into immediate cash. If you're in a business-to-business environment, offering trade credit is common – you provide goods or services, issue an invoice, and then patiently await payment, typically within 30 days.


Now, trade credit is industry-dependent. While fast-food businesses may receive instant payments at the counter, others, like those selling hard goods to retailers, might extend credit to clients. This credit allows retailers to sell goods, generate revenue, and pay the supplier within an agreed timeframe.


However, this seemingly normal practice can lead to a cash flow crunch for growing businesses. Imagine having to wait for 30 days or more to receive payment for each sale while still covering operational costs. This scenario can be detrimental, especially for businesses experiencing rapid growth.


This is where factoring companies step in. They address the liquidity crisis by purchasing accounts receivable. Let's break it down:

  1. The Asset: When you make a sale and issue an invoice, the resulting accounts receivable is essentially your asset. It represents the money your customer owes you.

  2. Factoring Agreement: A factoring company enters into an agreement with you to purchase these receivables. In exchange, they provide you with an advance amount – let's say $80 for a $100 debt.

  3. Payment Shift: Once the agreement is in place, your customer now owes the money to the factoring company, not you. You instruct your customer to pay the factoring company directly.

  4. Final Settlement: When the customer pays the factoring company, they deduct their fee (let's say 3%) and remit the remaining amount to you. In our example, you'd receive the remaining $17.


On the surface, it might seem like a fee, but the benefits are substantial. Factoring accelerates your cash flow, providing immediate working capital to cover costs and fuel growth. The fee incurred is comparable to credit card processing charges but can offer a significantly higher return on investment.


If you haven’t already, be sure to sign up for my email list at www.DavidCBarnettList.com 


Cheers



David C Barnett


Wednesday, March 13, 2024

The changing Value of your time

 


***New Video Alert!

What’s more important to you?

Money or time for personal pursuits and relationships?

This week, I take a stab at how to value your time and some very important considerations you need to make before you get into business.

Watch this week’s video here: https://youtu.be/KwNwBaZA1WA 


Cheers


See you over on YouTube

David C Barnett



Saturday, March 9, 2024

Unveiling the Franchise Reality: A Freshii Perspective on Business Ownership

Today, I've got an eye-opening video to share about franchises, sparked by a recent news article.


Now, let's shift our focus to the pressing issue of franchises. As you may know, back in 2015, I penned a book called Franchise Warnings, shedding light on the pitfalls and risks associated with the franchise business model. Fast forward to today, and we're confronted with a recent news article about a Canadian franchise giant, Freshii, whose ambitious growth plans took a hit, leading to a 50% drop in stock value.

Freshii's CEO, Matthew Corrin, aimed to almost double their store count in 2019, but the reality was a far cry from expectations. The blame game began, with Corrin pointing fingers at underperforming franchisees and slower-than-anticipated growth in the UK and US markets. This situation raised eyebrows, prompting me to explore the deeper issues within the franchise model.

The franchise business model often relies on rapid expansion to attract investors and drive stock prices up. However, the consequences can be dire for individual franchisees who find themselves caught in the crossfire. Corrin's insistence on closing the bottom 10% of stores demonstrates a stark truth: franchisees don't truly own their businesses; they are merely extensions of the franchisor's larger enterprise.

This brings me to a cautionary tale from the past. The Great Canadian Bagel, once hailed as a success story with over 200 stores globally, now stands with only 20 locations, highlighting the transient nature of franchise success.

When considering a franchise, it's crucial to align your goals with the franchisor's and understand the potential risks. Franchise ownership may not grant you the autonomy and control you envision, as the franchisor's priorities may clash with your individual business aspirations.

In conclusion, as you navigate the world of business ownership, stay informed and consider all aspects before jumping into a franchise opportunity. And if you're hungry for more insights, head to davidcbarnett.com and sign up for my email list to gain access to exclusive content, including my holiday chat videos.

Thanks for tuning in, and remember, true success comes from informed decisions and strategic planning.

Until next time.

Dave Barnett.

Wednesday, March 6, 2024

 


***New Video Alert!

Trace wants to know the difference between online businesses and real-world ones.

Finance, operations and will there be a buyer for his business when he’s ready to sell?

Which one has the greater potential for trouble?

Watch this week’s video here: https://youtu.be/S4Ts-jyQxh4 


Cheers


See you over on YouTube

David C Barnett


Online vs real world businesses

 


***New Video Alert!

Trace wants to know the difference between online businesses and real-world ones.

Finance, operations and will there be a buyer for his business when he’s ready to sell?

Which one has the greater potential for trouble?

Watch this week’s video here: https://youtu.be/S4Ts-jyQxh4 


Cheers


See you over on YouTube

David C Barnett


Saturday, March 2, 2024

The Hidden Pitfalls of Business Growth:

 


This individual runs a thriving therapy business in the southern US, and her rapid growth presented a financial challenge that many businesses face without even realizing it.


The Story Unfolds:

This therapist, talented in her field but lacking extensive business experience, sought a business loan to address what she perceived as a need for additional operating capital. Intrigued, I had a conversation with her to delve into the intricacies of her financial situation.


The Quandary:

On the surface, her business seemed healthy. Charging $139 per therapy session and paying her assistants $50, she appeared to have a robust gross margin. 


However, she consistently found herself without enough money to pay herself, despite what seemed like a successful practice.


The Issue: Growing Pains and Cash Flow Timing:

Upon closer examination, it became evident that her growing business was facing a common challenge—cash flow timing. 


She was adding multiple new clients each week, but the insurance companies she worked with took 30 to 45 days to process payments. 


Meanwhile, she paid her assistants every two weeks. The result? A significant gap between the money going out and the money coming in.


The Danger of Financing the Value Chain:

This situation highlighted a crucial point: when your receivables (what you're owed) grow faster than your payables (what you owe), you find yourself in a perpetual need for higher operating capital to finance your customers.


 Essentially, you're inadvertently financing the value chain of your business.

The Illusion of a Loan Solution:

The initial inclination was to seek a business loan to alleviate the short-term pressure. 


However, I cautioned against this approach. 


While a loan might provide temporary relief, it wouldn't address the underlying issue. 


If the business continued growing at the same pace, the borrowed capital would ultimately be consumed by the need to finance the insurance companies' delayed payments.


The True Solution: Matching Receivables with Payables:

The key to resolving her financial challenge was to extend her payables. 


By changing the payment terms for her assistants to align with the typical payment cycle from insurance companies, she could match the money she's owed with the money she owes to others.


 This would prevent her from unintentionally financing the activities of the insurance companies.


A Valuable Lesson: Financing Wisely:

This scenario highlights the importance of keeping a close eye on your payables and receivables. 


Businesses should be cautious about taking on debt unless it's to acquire assets that will generate profit over time. 


Borrowing to meet short-term financing needs, especially when it involves financing customers' activities, can lead to a cycle of interest payments without significant benefit.


Closing Thoughts:

It's a reminder that businesses should strive to match receivables and payables, ensuring a healthy cash flow.


Whether it's through credit terms with customers or strategic payment schedules, businesses can navigate growth more effectively by managing their cash flow wisely.


Never miss any of my content by signing up for my email list at https://www.DavidCBarnettList.com


Cheers


David C Barnett