Friday, February 19, 2010

Lending & Borrowing - ‘Confidence’ is Earned Not Given…

I recently attended a seminar sponsored by the Turnaround Management Association (TMA) which included panel discussions from financing companies and banks both of which are still heavily discounting tangible assets. Financial institutions use a blend of cash flow and asset equity to determine the lending capacity of a business among other ‘tools’ not covered here. The continued lack of confidence in the valuation of assets (buildings, equipment, inventory and even IP) will continue to constrain the economy well into 2010.

However, confidence with asset valuations is building slowly – moving in the right direction within some markets and industries. Lending all comes down to a lender’s confidence they will be paid back from the borrower in full with interest and on time.  In a truly open market valuations are built overtime and are not generally in anyone’s complete control; however, disruptions will occur and some individuals may attempt to control valuations in the short term.

Business management and owners can control the quality of the message presented to lending institutions which need confidence builders.  Confidence builders begin the lender / borrower relationship; achieving the goal of  both parties - providing captial for funding operations, growth or to finance strategic acquisitions for the borrower while the lender generates fee and interest income.

Key issues mentioned by panel members:
  • The lack of preparation in a businesse's own financial projections to 'sell' a bank that a borrower knows their business well enough  to plan - assuming the business management or owner's goal is to have any hope of borrowing money.
  • Failing to use realistically, conservative sales estimates and expenses to create financial projections that you would want presented to yourself if the tables were turned.
  • No confidence - if a company’s own financial and management team does not have faith or ‘confidence’ in the numbers presented to a financial institution then the effort is wasted.  The lending team will see through a borrower's false effort and they will remember it.
  • Companies must believe in their own asset valuations on their balance sheet and have supporting data / documentation to back it all up. A surprising number of companies do not put much time and effort into supporting asset valuations on their own balance sheets or presentation materials.
When management prepares a well thought out presentation to financial entities it will go a long way to achieving the goal of financing business needs. The greater economy and businesses will rebound quickly once confidence is restored which also must be earned.

If a business owner thinks about lending their own hard earned money to another business, especially now, how detailed and through would you want the financial statements and projections to be? How confident of a presentation by a business owner or management would you need to lend your own money?

Tuesday, February 9, 2010

Microsoft Azure and Cloud Computing...

Recently I attended a seminar hosted by Jeff Brand for Microsoft’s Azure platform – very interesting and powerful tools are being developing for small to midsized businesses. Cloud computing is really developing to the point where even very small businesses can benefit; inexpensive, relatively easy to deploy, scalable and powerful. Microsoft’s cloud computing solutions are good and will be very good within the year as they roll out additional features and remote server sites.

Most of us are concerned about a "cloud" solutions provider failing or lacking the resources to support their platforms. With Microsoft, even with some of its shortcomings, at least you have a strong brand and known quantity. Definitely worth at least testing if not full deployment.

A great first use would be in a promotion of your products or services; perhaps using your website to launch the promotion and assuming you did not want to buy additional server capacity. Another concern if you launched a promotion and your website is hosted by 3rd party;  you could find many problems that would negatively affect a customer's experience with their server experiencing overload issues. Also fees and surcharges with 3rd parties may pile up at many hosted services when volumes go beyond your base contracted rates or they may even downgrade your web service needs.

Unless you are a developer familiar with Azure it would be best to hire someone with previous experience deploying it; however, even a tech savvy individual could and should follow the setup and maintenance of your “cloud” solution. Find out more on Microsoft’s Windows Azure Platform website:

Friday, February 5, 2010

Social Media - Reputations (Part three of three)

The following is a continuation of a recent seminar called Reputations put on by Chris Brogan and member panelists. The key points of the seminar discussed how to tap into the power of social networks to build your brand's influence, reputation, and of course profits.

To be helpful businesses and individuals must begin by Listening, Connecting then Publishing. We will address each of the above key topics individually.


The internet and the social media offer the tools such as twitter, blogs, Facebook et al which are there for businesses to “listen” to what is being said about them. The economic downturn was partially caused by companies not listening to the real needs of customers and just pushing inappropriate home mortgage and related financial products on them.


Learn about the “influencers” using vertical tools such as LinkedIn. Learn about them and their interests. When tweeting those that you do business with remember it’s all about “them” not selling your products. It is not good social media practice to use Twitter as another dispenser of coupons or something other obvious promotional attempt to sell to twitters which will not go over well.

When using social media first talk about others and yourself or business last; a good ratio is 12 to 1 if you want to gain trust and creditability. Use newsletters and articles to aid in gaining that trust. Additionally talk up competitors and/or competing products which will add to businesses creditability. Taking up competitors/products is not only a courtesy but a reality.

Chris has an example of talking up competing products, a Japanese electronics company’s CEO during a public meeting brought out a competitors product and admired it in front of all in attendance. The CEO owned the competitor’s product and used it in addition to the products his own company offered. The reality is that customers in many cases have a complimentary mix of products from more than one company of the same type of product depending on their needs.

Social media is a communications tool that can be used to develop new products by finding how customers use company’s products to solve THEIR problems. No need for assembling customer focus groups that only want to please their paying hosts. Customers actually create their own products ahead of a companies R&D team. When businesses track who customers use their products through their own web order sites and social media new products or uses come into view.

Company blogs for only company business are really useless and a turn off. Companies MUST go and find where the clients are; not where companies want them to be. Companies must also anticipate where clients will be in the future.

Give away products and services can attract interest and be very profitable. An example is Red Hat software; they give away their product but sell billions in service offerings.


Offer various ways to connect by offering videos and other content. The primary goal is to make sure that you are listening to “me’ the customer when offering content in any form.

You do not own your reputation; it is the customers, current and former employees and interested others that own it; however, companies may be able to manage their reputations. Who will the company employ to help manage its online reputation?

Social media will influence the candidates that apply to your company; know what others are saying about the work environment in the company. Its culture; what is spontaneous is also of interest to web influencers. Influencers will determine a businesses potential employee candidate pool to draw from.

Traditional online media can compliment each other driving traffic on line building reputation, trust and website visits. The key is finding the right balance of resource commitments using both forms of media.

In closing social media requires a thick skin; however, it is an opportunity to fix problems and address issues publicly. Many companies fail in the eyes of reputation builders (customers or interested others) because they take too long to correct problems; simply just too slow and reactionary. Companies must have plans in place for good and bad online publicity and events and quickly act on them. Correcting and fixing problems publicly online shows the web community that a company is engaged and cares.

Social Meda - Reputations (Part two of three)

The following is a continuation of a recent seminar called Reputations put on by Chris Brogan and member panelists. The key points of the seminar discussed how to tap into the power of social networks to build your brand's influence, reputation, and of course profits.

Chris and the panel covered online social tools to build “networks of influence” which can help build reputation slowly and conversely damage it quickly. There is no quick method for building an online reputation as stated earlier it can be quickly lost.

Some thoughts when using social media from Chris and the panel:
  • Humanize and create your own media which social media allows you to do; individual’s opinions now really do matter.
  • The web and social media do make better, informed customers.
  • Future - Customers in the near future will expect real time tweets of their concerns about a business. Quality of communication will improve, consolidation of platforms is coming.
  • Do not be an ‘apps’ chaser – focus on the customer and follow their lead.
  • Planting good articles and stories on the online, with some thought, will have both spread around the web quickly.
  • You can use social media to build up networks to positively impact your business.
  • Use social media to build trust; because trust is the key to building online reputations, those who traffic in it are the important people your business needs on its side.
  • Social media’s tools allow businesses to Stop, Collaborate and Listen if they are engaged.
  • ROI metrics can be created, tracked and measured from social media – prospects, leads, and phone call volume changes. Prospect conversions into bookings; combined with typical measures sales, profits.
  • Define strategy and the business results and impact expected.
  • Ask customers how they would us social media to connect to them and the type of relationship they want.
  • Some companies use the term “digital influence” meaning all parts of the web and its impact on the business.
  • Social media needs a purpose, a definition and action.
  • Customers will expect for some businesses to operate a 24 x 7 x 365 twitter service to meet their needs.
  • Are communications real and live or just automated, untimely and even unhelpful?
Chris’s starting point is to be helpful which his overriding and number one objective. Try to be helpful to the online community; equip them to do better things. Study communities and offer to sponsor them. Be open and flexible in selecting communities to sponsor – a community does not have to be directly related to one’s business when building a relationship.

More will be covered of the seminar “Reputations” in our next issue as part three.

Social Media - Reputations (Part one of three)

The concepts of social media and its growing impact on businesses are reflected in the bottom line today. Regardless of a businesses desire or lack of desire to commit resources into social media the impact is already being felt by all companies for better or worse.

The following is a summary of a recent seminar called Reputations put on by Chris Brogan and member panelists. The key points of the seminar discussed how to tap into the power of social networks to build your brand's influence, reputation, and of course profits.

Businesses must choose now to commit significant resources into social media; now means before it too late to manage a businesses online reputation or even to profit from it. Businesses must develop a plan to understand social media and create action steps which are implemented timely. Waiting to commit resources now has the potential to create the conditions in which a business will have to respond to a crisis situation.

As Warren Buffet famously stated “It takes a lifetime to build a reputation and only 15 minutes to destroy it”. Social media will help build or enhance a businesses reputation but can damage or perhaps even destroy a business in a matter of seconds online.

Chris Brogan’s message in a recent seminar covers several key concepts as he does in his book Trust Agents. Chris does understand the need to profit from social media; although profiting from social media does not often have direct correlation.
The key points of the seminar discussed how to tap into the power of social networks to build your brand's influence, reputation, and of course profits.

The Greeting:
Chris points out in his presentation in social situations we greet each other in a non-threatening manner when meeting in person; thus, we intend no harm. Social media opens an informational door that also can provide interested individuals a friendly greeting; a non threatening and even helpful greeting. The “greeting” is delivered from online influencers, third parties, also known as "trust agents” whom are actively engaged “web natives” who trade in trust, reputation, and relationships. Trust Agents use social media to accrue the influence that builds up or brings down businesses online.

Chris uses an example of a hotel that was quick in a response to him via twitter. He wanted to find a hotel in a major city and twittered his network. Shortly after he submitted his inquiry twitters recommended a hotel and even the same hotel twittered him and offered a deal for “bloggers’; they offer all kinds of deals and promotions. He not only stayed there but invited bloggers and others via twitter where he was staying; they said they buy him a drink in the very quiet bar. He stated that soon after his tweet both the bar and the hotel were filled up with paying guests; very profitable for the hotel.

Chris also points out specific pitfalls which can serious damage a business reputation when using social media. A case in point involved an airline that lost his luggage for a period of time; someone or an automated process sent a very unhelpful tweet to him. Needless to say he did not feel “good” about their attempt at one on one communication which was compounded by an equally unhelpful automated phone call to him later about the status of his luggage.

When businesses try to use old concepts of mass communication to reach customers they risk angering the very people they are trying to reach. Social media is about real one on one communication, not emulated.

More will be covered of the seminar “Reputations” in our next issue as part two.