The “Dilemma”

The exchange started with a simple post from a factoring broker that had a “dilemma” with a new soon-to-be client.

In going over the client’s information, the consultant discovered that the client really did not need factoring help. He had two other alternatives that were clearly better choices for the client , with no additional risk.

The consultant was concerned how he was going to keep is his client focused on factoring so he could get the deal. “Any feedback would be helpful.”

Enter the “Expert”

The post was almost immediately replied to by a so-called “industry expert” that had been involved with similar negotiations (all going his way of course).

His advice bordered between “bait and switch” and “smoke and mirrors.”

Seriously?

In the ongoing posts back and forth neither of them ever considered actually telling the client that there were better options available.

What? Risk losing the deal in exchange for taking the professional higher ground?

Yes, and here is why…

1. The client is going to find out anyway. When they do, you are going to look like either an idiot or a thief. Ok, maybe those sound a bit harsh, but you will probably be viewed somewhere in the not so favorable middle.

2. They have friends to send you. Your “missed opportunity” with this client could come back ten-fold if you actually help your client. Trust me, he is going to tell every one of his colleagues about you. You saved the day, even if it didn’t involve invoice factoring. Who do you think his friends are going to call?

3. They have friends to steer away from you. Same as the last point, but in a bad turn of reversal. Remember, he will find out what happened, and will be sure to tell his friends if he thinks you purposely didn’t help him in order to make a few bucks.

Look, the rule of thumb is simple…

Always do the right thing.

Help your client in any way, shape, or form that you can. If it involves factoring receivables and you get a commission on the deal – that’s great!

If it doesn’t, but you are still able to help, just consider that you put some future business on lay away – maybe it will show up just in time for the holidays!

Well we found several “must have” factoring broker kits while researching our updates for the 2010 Factoring Directory.

And the best part is I’m going to tell you where to download two of them today for free!

At a minimum a factoring broker kit should:

1. Detail the types of accounts receivables a factor will buy
2. Outline the minimum qualifications for a business seeking invoice factoring
3. Provide the application for registering as a factoring broker

But sometimes a company goes a step further by providing that little something extra to help you succeed as a factoring consultant. They know if you find more deals, then together you can both make more money helping clients find working capital. These additional resources include:

• Where to Find Factoring Prospects and Referral Sources
• How to Answer a Business Owner’s Objections to Factoring
• Sample Marketing Brochures
• Scripts for Contacting Business Owners

So, where do you find two of the factoring broker packages that meet and exceed our expectations? Just follow these links:

http://www.hamiltongroup.net/brokers/index.html

http://www.paragonfinancial.net/toolbox.asp

These broker packages are like mini “how-to” factoring help courses for finding and developing clients.

Looking for more great resources, factoring services, and funders? Be sure to grab your copy of the new 2010 Factoring Directory.

It May Cost More NOT to Use Factoring

Ask someone on the street and they may tell you that factoring will cost you anywhere from 10% to 50% per transaction. Of course these people have never actually used factoring (if they did we sure would like to know who charged them that much).

In reality, an experienced finance professional will tell you that the average opportunity cost to factor is between 2% and 5%. Yes, some factoring companies will do deals at 1% but these are typically reserved for Fortune 500 payers and exceptional circumstances.

The fact is, not factoring may cost you a lot more. Many companies are able to take advantage of volume discounts and COD pay alternatives – thereby not only offsetting the cost of factoring but sometimes even profiting from it!

Be Flexible

Some business owners don’t realize the factoring process comes with many options, all in the hands of the business, not the factor.

For instance, not all invoices need to be factored. The business decides which invoices to factor and which ones to retain. On some months the business may obtain cash advances on several invoices to accommodate bills on other months they may not factor at all.

The company, not the Factor, decides how long the relationship lasts. Most companies will factor two to three years on average and then have enough cash on hand to facilitate any expansion. Other companies never leave the factoring process, as they are able to use the ongoing cash flow to continue increasing the profitability of their company.

Combining with other alternatives such as using the factor’s Credit Risk Analysis, Recourse and Non-Recourse Options, and the “Insta-Pay” Programs all give Factoring an A+ when it comes to financing flexibility.

“IF YOU AIM AT NOTHING YOU WILL HIT IT!”

What an interesting phrase but how does it relate to the Factoring Industry?

Many Factoring Consultants exhaust their marketing efforts with a shotgun approach, never aiming or directing a Target marketed message to a Target marketed audience. Unfortunately, these individuals end up creating a lot of activity but not being very productive.

Consultants working in the Factoring industry on a part-time basis have limited time available to put forth to their consulting business. These consultants have very little time to waste.

Full-time Consultants are the complete opposite; they have a lot of time available to them therefore, a lot of time to waste.

Marketing efforts that are not Targeted are very difficult to manage and in many cases can exhaust your marketing budget. Try picking a Niche in a type of industry with annual sales between 500K and 2.5MM. This should help you narrow your scope.

Next pick an industry that you are familiar with. Why? Because it makes targeting your market easier, you will get the most out of your Marketing budget and you can manage or track your marketing results more efficiently.

You should always try and leverage your efforts which means putting out one unit of effort that produces multiple results. This can be achieved by taking advantage of the Internet and the multiple marketing streams that the internet makes available.

Direct Mail campaigns that create curiosity and the Internet continue to be our companies top marketing mediums in controlling our own deal flow destiny. Set a monetary goal on the realistic income that you desire and then develop a marketing plan. This will help you keep focused and on track in reaching your goal.

So in conclusion, take “Aim at Something” and at the very least you will know where you are going. Define how you are going to get there or how you are going reach that Target market and use the Internet. Need I say more? Yes, I do somore to come later. All the Best!

Michael Ponomarew brings with him more than 24 years of experience in entrepreneurship, marketing, and business management. Mike can be reached at mikep@millenniumfunding.com or by calling 888.652.8298 ext. 45.

You may or may not know that Canada is the second largest land mass country in the world with Russia being the first. However, the population in Canada is just over 30 million about the same as the state of California. Approximately, 90 percent of the Canadian population is concentrated within 100 miles of the US border. This is because the Canadian Shield – 3.2 million square miles of Rock Topography makes it difficult to develop land and transportation routes.

Canada resembles the United States in its market-oriented economic system, pattern of production and affluent living standards. Canada’s economy is ranked #1 amongst G-7 nations experiencing impressive growth in the mining, manufacturing and service sectors.

The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) touched off a dramatic increase in trade and economic integration between Canada and the United States. The end result being 85% of Canada’s exports arrive into this country on a regular basis.

Most Canadian companies aspire to sell their products into the United States because this country creates ten times the exposure and ten times the sales volume compared to Canada. The Canadian business owner will go as far as hiring an American Marketing Agency that is based in the United States to promote their products. Most American companies, customers and consumers buy Canadian due to the currency exchange rate which obviously creates invoices.

Most Canadian factoring companies are not comfortable in buying American receivables (invoices) because they are not well versed in American usury laws and cannot successfully perfect their security. Millennium Funding is located close the Canadian border in Williamsville, NY with Canadian representation and offices in Toronto, Ontario Canada. Concentrate your marketing efforts in three provinces (which we call states) Ontario, British Columbia and Alberta.

You should Target market Exporters, Oil & Gas Companies and Service Providers, Apparel and Manufacturers. For more information on how you can take advantage of this opportunity contact Mike Ponomarew.

Michael Ponomarew brings with him more than 24 years of experience in entrepreneurship, marketing, and business management. Mike can be reached at mikep@millenniumfunding.com or by calling 888.652.8298 ext. 45.