No Obligation Consultation - Call (888) 783-1503

Business Finance Lounge

How to Determine if a Small Business Loan or Line of Credit is Right for You

Posted by Brittni Abiolu

Jul 10, 2014 8:15:00 AM

5792635506_697faa416dThe most accessible type of small business capital for small business owners is debt financing, which includes small business loans and small business lines of credit. If you’re seeking small business capital, it’s very important to understand that small business loans and small business lines of credit are two very different types of small business capital. The biggest (and most obvious) difference between a small business loan and line of credit is: 

  • Small business loans have fixed interest rates and terms and are considered long term financing. Long term financing is generally used to purchase large assets such as equipment and machinery. 

 

  • Small business lines of credit have variable interest rates and terms and are considered short term financing. Short term financing is generally used to purchase supplies and inventory and cover payroll. 

Once the total amount of a small business loan has been used, you’ll need to re-apply if you need more financing. However, the good thing about obtaining a small business loan is that you’ll have the same monthly payment for the life of the loan. This will make it easier to budget because you will already know what to expect in regards to monthly payments. You’ll also be able to pay it back over time.

Small business lines of credit are revolving, meaning that you can have access to them for the life of your small business if you manage the debt properly (and the lender wants to continue their relationship with you). Lenders may also continuously increase your credit limit over time if the small business line of credit is properly managed (increasing your access to capital year after year). However, your monthly payment may vary depending on how much you spend from the small business line of credit. Because of this, you’ll need to plan ahead before you begin using the small business line of credit to be sure you can handle the monthly payment.

If you want to determine if a small business loan or small business line of credit is right you, ask yourself:

  • Will I need ongoing access to capital? If you own a small business that will continuously need outside funds to operate efficiently and effectively, you may find that small business lines of credit are more suitable for you than small business loans. This is because once a small business loan is used, you’ll have to re-apply to get another and there’s no guarantee that you will be approved again.

 

  • Can I afford to pay a fixed monthly payment? If you don’t have the ability to pay the same monthly payment every month, a small business loan may not be suitable for you. With a small business line of credit, your monthly payment will vary depending on how much you use. If you don’t use the small business line of credit for a particular, you may not have a monthly payment for that month (as long as there isn’t a current outstanding balance).

If you are still unsure about whether or not a small business loan or line of credit suitable for someone in your unique situation, you may want to consult with an expert who is well versed in the small business finance arena. The most reliable and knowledge experts will be able to properly analyze your business and situation to determine whether a small business or line of credit will be best for you at the present time.

Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on LinkedinGoogle+TwitterFacebook, and Pintrest.

 

Photo credit here

 

more

Topics: small business loans, lines of credit

Identifying the Best Small Business Financing Experts

Posted by Brittni Abiolu

Jul 8, 2014 10:11:00 AM

8016428880_8bdfffafafApplying for small business financing can seem like a difficult and daunting task for many entrepreneurs and small business owners who have no experience with it. The best way to minimize the difficulties that can be associated with applying for small business financing is working with an expert who understands the process and can help you increase your chances of getting approved. Before you approach an expert to assist you with the process of obtaining small business financing, it would be wise to know how to identify the best of the best. There are hundreds of thousands of so-called small business financing experts online but only a small few will live up to your expectations. If you’re considering consulting with an expert to help you apply for small business financing, you’ll need to know how to identify them. There are 3 good ways you can identify the best small business financing experts:

  • Transparency – The best small business financing experts will be open and honest about who they are and what they can do for you. They’ll have a professional website with a company name, phone number, email address, and/or contact form. They’ll make it easy for you to contact them and do your due diligence on them by telling you everything you need to know about them on their website or over the phone. If you find that you have a difficult time doing due diligence on a so-called expert, it would be wise to look elsewhere. 

 

  • Proof of Experience – Small business financing experts who are the best at what they do often have a long history of working with small business owners to obtain funding and will be able to display that through their knowledge. The best way to determine if they are knowledgeable and experienced is to speak with them. When speaking with an expert, they should be able to do 4 things – (1) analyze your personal and/or business credit history to help you determine what type of small business financing you will qualify for and how much you can get, (2) tell you how to increase your chances of getting approved for small business financing based on your personal and/or business credit history and unique needs, (3) tell you which lenders are the best to approach and help you apply to those lenders, and (4) coach you on how to use the small business financing effectively so you can grow your business and increase your profits. If they don’t discuss each of these things with you, you may want to consider another option. 

 

  • Proof of Results – When it comes to small business financing experts, the proof is in the pudding. The best small business financing experts will always have verifiable written or video testimonials on their website. Some experts may even provide you with the contact information of past clients so you can call them to verify their results. If you find a so-called expert that can’t show you any proof that they’ve ever gotten anyone approved for small business financing, keep searching. 

Whatever you decide to do, I strongly suggest that you talk to more than one self proclaimed expert before making a decision. Take notes when speak them so you can remember and study what they’ve said. After you’ve approached about 5 to 10 experts, review your notes, think it over, and make the decision that is most appropriate for you. Good luck!

Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on LinkedinGoogle+TwitterFacebook, and Pintrest.

Photo credit here

more

Topics: Small Business Financing

Why You Should Consult with an Expert to Get a Small Business Loan

Posted by Brittni Abiolu

Jun 25, 2014 6:49:00 AM

9071472374_780c756832If you are considering applying for a small business loan, consulting with an expert, third party resource, consultant or business finance broker could be very beneficial to you. Many small business owners are experts in their industry and good at what they do but may have no clue how to start the process of acquiring and obtaining a small business loan. The good news is that there are experts out there who can help you get the results you want. There are 3 primary reasons why you should consult with an expert to obtain a small business loan: 

Long-term experience – Most experts, third party resources, consultants or business finance brokers have a long work history of working with banks and lenders. Often times their primary positions at these companies were that of “small business bankers”, “personal bankers”, and/or “mortgage bankers.” After years of working with various banks and lenders, many of them often decide to branch out on their own to help small business owner improve their chances of obtaining small business loans.

Insider knowledge - Working with experts is also good because they often have insider knowledge about how to get approved for a small business loan that the general public may not be aware of. Experts that have years of experience working at banks often know every single detail that lenders look at when determining whether or not to approve you for a small business loan, therefore they can pass that knowledge on to you so you can better prepare yourself. 

Business Connections – Most experts, who are familiar with the process of obtaining small business loans, have built a database of connections that include banks, lenders, and credit unions that the general public may not know about. Most people only know about well known banks, lenders, and credit unions and those that are in their local neighborhoods. Experts often know about banks, lenders, and credit unions in multiple states. This opens up more opportunities for you to approach multiple small business loan sources for funding. One lender may not approve you but another will. The best experts will always know which lenders to approach based on your unique situation so you have a better chance of being approved. Working with the right expert will no longer limit you to just your local banks, lenders, and credit unions. 

Overall, working with an expert who is familiar with the process of obtaining small business loans will give you better results. It would be wise to consult with an expert the first time you decide to apply for a small business loan so you can do it the right way. The best experts will always prepare you to get approve and simplify the process of obtaining small business loans using their experience, knowledge, and connections. 

Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on LinkedinGoogle+TwitterFacebook, and Pintrest.

photo credit here

more

Topics: small business loans

A Tale of Two Small Business Owners

Posted by Thomas Gazaway

Jun 24, 2014 11:27:00 AM

4645730858_b3114f96a4How important are the early stages of your business? Lots of the time we call it the start up phase. Well, think about it like this. Brett and Sara both sell widgets. Brett's widgets are great and amazing. Sara's widgets are good and solid. Side by side in 3 different stores Brett's widgets outsold Sara's widgets. But how are Brett and Sara's companies different?

Brett has a cool idea to take his widgets nationwide, maybe even worldwide. He decides to build a website. He finds a couple of online sites that wanted to charge him between $700 - $1,200 for a website. They wouldn't be interactive sites, they would not really be set up to do any drip marketing, there would not be a blog, and they wouldn't design the site around proven SEO strategies. After all, what do you expect for only $1,000? They would have an online cart to receive orders and that was about it. The site would be pretty static and wouldn't change much. It would be a total of about 3 pages, a homepage, a checkout page, and a thank you page.

After seeing the costs, Brett figures he'll set up his own site to save about $1,000. He's never owned or ran a business but how tough can it be to set up a website? So while Brett starts setting up a website, Sara takes a different path to sell her widgets.

Sara decides to do a few things. First she obtains some small business funding. Since she's a startup she doesn't have any revenue so she knows her best bet is to get some business credit cards. She knows about things like the Capital One Business Credit Card so she is careful about how she obtains her funding. In the end she gets some help and has $50,000 to use for her business. She thinks she'll need about $15-20k but everywhere she reads the people with experience tell her that everything takes more time and costs more than expected. So while she's getting some funding she decides to educate herself. She does this by reading books like The E-Myth Revisted, Built to Last, and Predictable Success. She also signs up for two free courses on Courera.org.

The next thing she does is create a marketing plan. She learns about the 7 Musts of Marketing and makes a strategic decision to invest part of her funding in building a website that will engage people and generate leads. She knows she could "do it herself" but also knows that you get what you pay for. In her research she realizes that she could spend $1,000 and get a "cheap" website built for her. Or she could spend $3,000 to $5,000 and get an "inexpensive" website that is very good. She knows she does not need one of those $20,000 or $50,000 websites but for an extra couple thousand dollars she'll get a far superior website that will sell more widgets, create relationships with her customers, and represent her company in a very professional manner.

When it was all said and done, Sara spent $4,000 getting her funding, $4,500 on her website, $250 on some books and educational resources, and $750 on an email marketing system that integrated with her website leads and her twitter and Facebook accounts for a really cool backend campaign for her website visitors.

So let's compare Brett and Sara. Brett ended up building his own website. With the tools and apps and resources he needed he ended up spending $600, out of his pocket. It was a savings over what he would have spent if he had one of the online companies build his website. Sara, on the other hand, financed her company's start. She got a website that was superior to Brett's (by far) and she spend some time and money learning about business from great books and a quality online site, plus she has access to additional funding for any future needs. She set some goals and then created a marketing "plan" that was basically a "path" for "how" she would get to her goals. Lastly, Sara spent no money out of pocket. Her business credit card paid for everything, she's paying 0% in interest for the first year and her monthy payment is less than $200. She did make an initial investment of almost $10,000 but it will be more than 3 months before she spends as much as Brett did out of pocket.

So who is going to sell more widgets? Who has a better chance of success? Who would you rather be, Brett or Sara? Success as small business owners does not require a high IQ. It doesn't require you to be smarter than the next guy. It's pretty easy to open a business. It's pretty easy to "be in business." The tough part is making consistent profits year after year. It requires a "plan." If you're thinking about starting a business or you are already a business owner then read more about the 3 main reasons businesses fail here.

photo credit here

more

Topics: small business owners, small business funding

Small Business Loan Provider Partners with Bank

Posted by Thomas Gazaway

Jun 19, 2014 11:04:00 AM

455279239_720dfc98c8Small business loans are and always have been in high demand for small business owners. We know that the lack of access to capital is one of the top reasons why small businesses fail. Additionally, we also know that banks only approve about 10-20% of the loan applications they receive from small business owners. There are a variety of reasons for this but in recent years, with advances in technology, there have been large numbers of "alternative" lenders who have stepped into the business funding gap.

Last month, a partnership was announced between OnDeck and BBVA Compass. OnDeck was formed in 2007 and uses a prorprietary scoring model to issue small business loans to small and medium sized businesses. Their loans are significantly higher cost than bank loans and, additionally, they only offer terms of 6-24 months so the higher rates along with the fast payback means that their loans don't exactly qualify for what we call "cash-flow friendly" in our 6 Benefits of Borrowing ebook. However, they have been quite successful and have grown rapidly in recent years.

Banks have been very slow to embrace technology and, for the most part, still underwrite and approve their loans just like they did 15-20 years ago. The same people who are changing our world through coding and computer programming have not found a home inside the small business banking sector as of yet. There are technology hubs all around the country, the most famous area being Silicon Valley. Boston, New York, Dallas, and Seattle among other cities have lots of technology-based companies (and jobs) for programmers. If you know computer languages like Python, Ruby, Java, etc. then chances are you won't have any problems finding work. Unfortunately, the banks have not been innovators, early adopters, or even part of the early or late majority with how they accept, approve, decline, and process their small business loan applications. To call the banks laggards would almost be an understatement.

So this partnership is an important development. It might just be a strong indication that banks would rather team up with a technology partner. The landscape is changing.

What does this mean for Small Business Owners?

It might be a little early to confidently answer this question. However, it's possible that the huge gap between banks and "non-bank" lenders will begin to be bridged. It certainly won't happen overnight but if more of these partnerships follow then it would surely be good for the main street small business owners who need funding.

It's hard to find but keep in mind that the best case scenario for a small business owner is to work with someone who understands bank financing and non-bank financing, as well as both personal and business credit. Then, with a proper diagnosis of your business and your goals you can begin to know what business funding options you have and how to go about obtaining that funding. Also, remember the importance of both personal and business credit so that you not only borrow and fund your business now but also so that you can position yourself for the additional funding you'll likely need if your business is successful.

Photo credit here

more

Topics: small business loans

How to Determine if Factoring is Right for Your Business

Posted by Brittni Abiolu

Jun 18, 2014 7:15:00 AM

14050106798_e73137ac04If you own a business that has customer payment terms of net 30, net 60, net 90 (or more), chances are you may have experienced cash flow issues at some point. If you’ve had cash flow issues, using factoring finance to cover business expenses might be right for you. Factoring finance may help you keep the business afloat while you’re waiting on payments from customers. The first thing you need to know to determine if factoring finance is right for you is to understand exactly what it is. Small business owners are often confused as to what it is, therefore knowing how it works is important. 

What is factoring?

In a nutshell, factoring happens when a small business sells it’s accounts receivables to a financing company to get a percentage of total amount of receivables in cash to cover current business expenses. Most factoring finance companies will pay the small business owner up anywhere from 60% to 90% of the total amount of receivables owed to cover the cost of their business expenses. Once the accounts receivables are sold, the factoring finance company owns them and the customer becomes responsible for paying them instead of your company. This type of transaction gives you immediate access to capital and places the responsibility of collecting your customer’s payment on the factoring finance company since they have purchased the receivables from you. To determine if this type of financing is right for you, keep the following in mind:

Factoring finance is usually best for B2B companies – most factoring companies will only provide factoring to companies that sell products or services to other companies. If your company is a B2C company, you may want to consider a “merchant cash advance” instead. Merchant cash advances are best for business owners that accept credit cards or check deposits from their customers. 

Creditworthy B2B customers are required – an important key to getting approved for factoring finance is having B2B customers that can prove their creditworthiness. Factoring finance companies will check your customer’s business credit rating. If your customer doesn’t have a history of paying on time, you may not qualify to factor your receivables for that customer.
 
The total amount of your receivables – most factoring finance companies require you to have a minimum amount of receivables to sell. The minimum amount varies depending on the factoring finance company but usually a minimum of $10,000 in receivables from at least one customer is required.
 
Your customer payment terms – depending on the factoring finance company, your customer payment terms will need to be net 30, net 60, or net 90. Some factoring finance companies allow up to net 180 customer payment terms. Factoring finance may not available to you if your customer payment terms go past 6 months; (however, again this depends on the factoring finance company you work with). 

If you’ve determined that factoring may be right for you, the next step is to seek expert help. Finding a good factoring finance company is critical. You will want to go with the company that has the best rates and terms. If you need assistance with finding the most suitable factoring finance company to meet your needs, our Small Business Finance Advisors may be able to assist you. Inquire today to see how we may be able help you.

Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on LinkedinGoogle+TwitterFacebook, and Pintrest.

Photo credit here

more

Topics: factoring

How to Know if You’re Ready to Apply for Small Business Financing

Posted by Brittni Abiolu

Jun 4, 2014 8:15:00 AM

Small_Business_FinancingBefore you began applying for small business financing, it would be wise to know if you’re actually ready. Different lenders have different requirements that you must meet to get approved. Therefore, knowing and understanding those requirements will help you determine if you are ready to apply for small business funding. Examples of what lenders might require of you include:

  • Meeting their credit criteria – most lenders will review your personal history to determine if you qualify for small business funding, especially if you own a startup with no proven track record of success just yet. The key to meeting a lender’s credit criteria is to avoid making late payments (or making no payments at all) towards the accounts reporting on your personal credit profile. Derogatory and delinquent accounts are the number one reason why lenders deny applicants. Keeping your credit card balances below 30% of the total credit limit is also ideal. If lenders see that you have maxed out your credit cards, it could negatively affect your chances of approval. Lastly, monitor your debt to income ratio. Taking on to much debt (when you don’t have the income to pay it back) could raise that ratio, which can be a huge red flag to lenders.

 

  • Having your loan package ready – you should be prepared before you approach a lender to apply for small business funding therefore having your loan package ready is extremely important. A loan package should include a business plan (with executive summary) and at least 3 years of financial projections. It should also include the loan application and proof of registration of the business. Having a well put together loan package shows the lender that you are aware of what it takes to qualify for a loan and what it takes to pay it back.

 

If you meet a lender’s credit criteria and have your loan package ready, the next step would be preparing for the lender meeting. That’s right, if you want to get any small business funding from a lender you may be required to sit down with them and answer a few questions. Before the actual lender meeting, the lender will usually ask to see your loan package so they can review your business plan and financial projections before they speak with you. Therefore, it would be wise to fully understand everything that is laid out in the business plan before the meeting with the lender. This way you will be able to answer all questions the lender throws at you with ease.

This is especially important if you hire a consultant to help you complete the business plan. Make sure you are thoroughly involved in the business plan development process so you’ll be aware of everything that’s in the plan. Lenders can sense when you don’t know anything about your business industry or what’s in your business plan, so study it like you would study for a test. Once you have completed all of these necessary steps, you’ll most likely be ready to apply for small business financing.

Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on LinkedinGoogle+TwitterFacebook, and Pintrest.

photo credit here

more

Topics: Small Business Financing

Safety in the Workplace: It’s Your Responsibility

Posted by Rieva Lesonsky

May 29, 2014 7:00:00 AM

186221101By Rieva Lesonsky

It’s worth the extra working capital you might need to take the necessary steps to provide your employees with a safe working environment. If an employee gets injured at your business, it could mean huge penalties or even the end for your company. Then there’s your company’s reputation in the community to consider. Who wants to be known as an uncaring employer?

All employers, whether they have one employee or hundreds, are subject to federal regulations. In 1970 Congress created the Occupational Safety and Health Administration (OSHA) to ensure safe and healthful working conditions for all employees. By setting and enforcing standards and by providing training and education, OSHA helps businesses of all sizes help provide a workplace free from recognized hazards that are likely to cause death or serious physical harm to employees.

If you use temporary workers or independent contractors, you may not have to comply with OSHA standards, but it’s best to check with your state government. Also, if your business has fewer than 10 employees, there may be some rules you do not need to adhere to, such as keeping OSHA injury and illness records.

Federal OSHA standards fall into four categories: general industry, construction, maritime and agriculture. Each category has its own set of standards, however all businesses have these standards in common:

  • All employees must have access to medical, safety and hazard exposure records.
  • Personal protective equipment must be provided at no cost to employees; and
  • Manufacturers and importers of hazardous materials must be evaluated on a regular basis, and employees kept informed of potential hazards.

All businesses covered under OSHA are subject to inspection by federal or state compliance safety and health officers. How can you be sure you’re in compliance when there are so many confusing regulations? Fortunately, OSHA has area offices that offer advice, education and assistance to small businesses. In addition, OSHA’s On-site Consultation Program offers free and confidential advice to small and midsized businesses in all states across the country, with priority given to high-hazard worksites. On-site Consultation services are separate from enforcement and do not result in penalties or citations. Consultants from state agencies or universities work with employers to identify workplace hazards, provide advice on compliance with OSHA standards, and assist in establishing safety and health management systems.

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+   and Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

more

Topics: working capital, small business management, small business owner

Do You Live the “Entrepreneur Life” in the Fast Lane or Slow Lane?

Posted by Brittni Abiolu

May 28, 2014 8:17:00 AM

2579303036_6488e9980bI like to think that there are two types of entrepreneurs – a horse and a cheetah. Both are beautiful and bold animals but they approach the entrepreneur life very differently. The first type of entrepreneur – the horse, can run as fast as 45 miles per hour, but often prefers to glide at a slow and steady pace. The second type of entrepreneur, -- the cheetah moves almost as fast as the speed of lighting! That’s the biggest difference between these types of entrepreneurs, one wants to grow at the speed of Twitter and Instagram – the other, at the speed of Coca-Cola.

The Reason Why It Matters

According to the INC Magazine article, “Are You a Tortoise or a Hare Entrepreneur (It Matters” by Ami Kassar, building a business quickly may mean sacrificing your work/life balance. Entrepreneurs in the tortoise (aka horse) category are more likely to build lifestyle businesses that grow slow and steadily. This steady growth enables the entrepreneur to have more leisure time to focus on their own life outside of work. Entrepreneurs in the hare (aka cheetah) category are more likely to build high tech businesses that immediately attract revenue producing interest from customers and investors. In addition, hares have to keep investors happy so valuations can continue to rise, which can be time consuming and stressful.

There’s No Such Thing an Overnight Success

There may be millions of entrepreneurs who desire to make millions during the first few years of operations. However, that’s not realistic. Most small business owners are actually hares and horses and grow their business over time. Companies that grow quickly typically have better access to capital. These companies often obtain funds from angel investors and venture capitalists. Capital from these sources can be hard to come by. Hare and horse businesses will have to look to more accessible, traditional and alternative small business lending sources for capital, which can also be difficult to crack.

How to Crack the Code

If you’re a small business owner in need of capital, the best way to crack the code on small business lending is to educate yourself on the importance of several things:

Building and Preserving Your Personal Credit History – establishing a personal credit history where you have diversified credit accounts, that are always paid on time is the key to qualifying for capital with traditional banks and lenders. When starting your first business, for the first time, lenders will check your personal credit history to determine your creditworthiness and ability to borrow. If they find that you have late or inconsistent payments and a number of derogatory and delinquent accounts, you’ll ruin your chances of being able to obtain capital through them.

Building and Preserving Your Business Credit History – Did you know that, according to Creditera, more than 45 million business credit reports were pulled from Dun & Bradstreet and 35 million from Equifax Commercial in the first part 2013? That’s right, business credit is becoming more and more important in lenders determining whether or not a borrower is creditworthy. Sure, you may only need your personal credit to get approved when first starting out, but over time you are going to want to build a business credit history because it will be combined with your personal credit to determine your overall creditworthiness (see LiquidCredit). The lower the score, the more likely you are to get denied (especially for SBA 7a loans).

Seek Expert Help

Seeking expert help to learn how to build your personal and business credit can benefit you in the long run. A knowledgeable and experienced expert will be able to teach you how to build a good personal and business credit history and help you put it into play. The best experts are often FICO Certified Professionals that at least understand the in’s and out’s of personal credit and can help you build your personal and business credit so you’ll always have a better chance at qualifying for traditional financing as your business continues to grow.

photo credit here

more

Topics: entrepreneur

3 Leadership Lessons From Donald Sterling

Posted by Rieva Lesonsky

May 27, 2014 7:00:00 AM

145910213By Rieva Lesonsky

There’s no escaping the media storm surrounding Los Angeles Clippers owner Donald Sterling, even if you wanted to. Named one of the worst owners in basketball by the Sporting News and the worst owner in sports by The New York Times and Forbes, Sterling’s recent taped and broadcast interviews have shown the world what many already knew—that he’s not a good person, or an effective leader. Besides not squandering your working capital on questionable girlfriends, here are some basic leadership lessons you can learn from Sterling’s mistakes:

  1. Take responsibility. If you, as your company’s leader, don’t take responsibility for your actions and your words, then neither will your employees. It’s important as a boss to admit fault and work to remedy a situation as best you can. Then turn around and do the same for your staff’s mistakes. Even if the mistake was someone else’s, it still reflects on your company, so instead of placing blame, figure out how you can fix the situation and not make that mistake again. Did you not give clear directions for a project? Did you assume a staff member knew more than he or she did? Do you need to put a new policy in place?
  2. Stand by your staff. Donald Sterling was known to heckle his own players from courtside. Do you roll your eyes about a staff member to a client when the employee isn’t looking? Always show your clients that your company works as a team and the team sticks together. Consumers want to shop at a business that has happy employees. Remember: If you have an employee’s back, he or she will have yours.
  3. Know when to shut up. Some people just have no filter and don’t know when to keep their mouths shut. If you have an explosive personality or rush to act before thinking, maybe it’s time to step back and learn restraint. Definitely put someone else in charge of your social media communications! Once you put a negative or explosive comment out there in cyberspace, your business reputation may never be able to recover. Read business books on successful communication habits or talk to a therapist about changing your ways.

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+   and Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports

more

Topics: working capital, small business owners, small business leadership

Subscribe to Email Updates

Posts by Topic

see all