Compound Profit Blog

If you own a small business, you should consider using purchase orders to help finance the purchase of your goods and services. Not only will your business save money, you may be able to extend your payment terms and keep your money in the bank a little longer when you use purchase orders.

A purchase order system is actually a credit system for purchasing goods and services. Most companies accept purchase orders as a form of payment. You simply give them your purchase order number and they will bill your account. At the end of their billing cycle, they will send you an invoice for the payment due in full. If you set up an electronic purchase order system, everything can be done automatically online.

You will save many valuable working hours by setting up a purchase order system. The system will handle all of your bills electronically, as your bills can be paid automatically by wire or ACH. You will not have to deal with writing checks or balancing your books, as a purchase order system will do these things for you. You can completely eliminate your paper system, which in turn will eliminate the common mathematical mistakes of a paper check writing system.

Purchase order systems match the invoices with the purchase orders and then automatically issue the checks for each vendor when the terms are due. If your accountant is just opening invoices and paying them, you are missing out on about 30 days of payment terms. If you have a purchase order system, the system will not pay the bills until they are actually due. This leaves your money in the bank a little longer to draw interest. It can also improve your cash flow and credit rating, since the money that you owe stays in your bank account longer.

 

The best way to maximize your purchase order financing is to pay for your purchase orders with a credit card when the purchase order is due. For example, if you bought something on a purchase order with Net 45 day terms, the bill would be due 45 days from the invoice date. If your credit card is due in 30 days and you paid for the purchase order merchandise on the 45th day with your credit card, you would actually not have to pay the bill for the merchandise for 75 days. Find a credit card that offers a rebate or incentive program and you will save even more on your financing.

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It is clear that the economy is recovering, and yet many business owners continue to struggle. The good news is that the increased pressure has forced at least some of these business owners to think outside the box, trying to discover new ways to increase their revenue.

What are some of these ways? Here are just a few ideas:

- Reach new clients by developing a strong online presence through social media, search engine marketing, and so on;

- Create new products and services;

- Actively look for new orders – sign up with LinkedIn, and then join the proper groups of specialists in your industry, ask questions, offer answers, etc.

Do this on a regular basis and you’ll eventually get a load of new orders from brand new clients. Sometimes you might even get an order that puts a huge smile on your face... until you realize that the purchase order is so large, that you don’t have enough money to fulfill it. Going to the bank isn’t a solution, because these financial institutions aren’t business friendly anymore, and the suppliers wouldn’t even trust their mothers when it comes to fulfilling huge orders without being paid in advance.

The alternative financing companies have seen this coming a long time ago and have created the perfect solution: purchase order financing. Almost any business can qualify for purchase order financing, because your company’s financials don’t matter that much – the factor will only check your client’s financials. Through purchase order financing, even a small business (be it totally new or fully established) can fulfill a huge order, thus being able to deliver the goods to the customer because the financing company has paid the order, keeping a small percentage (1% or so) for its services.

Purchase order financing will allow your company to grow without giving away equity and without wasting your precious time by going to a bank who will refuse you anyway. On top of that, the approvals are fast and easy – contact us and you will see for yourself.

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Does Your Bank Hate You?

It has all started in 2007, but three years later we are still dreaming at a better economy. In fact, many business owners aren’t dreaming at all, according to a study from Pepperdine University.

The numbers can’t be clearer than this: more than 75% of the business owners declare that they’ve got solid business growth strategies. Then why are we still struggling? The answer is given by the same study: only half of these business owners have the financing that’s required for growth, be it money to hire additional personnel, funds to lease or buy new equipment, bigger offices, and so on. That’s sad news, because it means that we’ve got millions and millions of businesses that would have the opportunity to grow, but are unable to do that because they lack the needed capital.

The crisis has begun with the liquidity shortage in the U.S. banking system, and through a snowball effect it has literally destroyed huge financial institutions, affecting the entire world’s population. The governments have tried to calm down the situation, creating sets of rules that were supposed to minimize the risks for the banks; on top of that, the banks themselves have made the things even more complicated because they feared they’d lose their precious money by handing them out to any business owner that was opening their doors.

Meanwhile, the things have calmed down and the banks have funds now... lots of funds! And since they are in the business of lending money, you’d expect them to hand out the cash to any business owner that has a solid growth plan, right? Well, that isn’t quite right, according to the study I’ve mentioned at the beginning of the article; I ran a quick check and it looks like over 7 million business owners are unable to grow their companies properly (or at all!) because their banks don’t like them anymore. So we’ve got 7 million companies that have solid growth plans and would help the economy recover much faster, but they can’t get money from the banks because their plans might fail and the banks aren’t willing to take any risks these days.

Fortunately, there is hope; the alternative financing companies have flourished just because the banks aren’t willing to take any significant risks nowadays. In fact, the alternative financing companies are now offering financial services that are light years ahead of the ones offered by the banks. Take purchase order financing for example; you can have a company with a single employee (yourself) and yet win important contracts with major companies and even the government, regardless of your business credit score. All you need is a purchase order from a solid company or the government and the financing company will provide the needed funds immediately, allowing you to win the match with any of your competitors, no matter how big they are.

Does your bank hate you? I surely hope it doesn’t. But I can tell you for sure that some of the alternative financing companies would be more than happy to help you discover the optimal financing solution that will make your business grow as it deserves. Contact us today for a totally free consultation and you’ll see the difference.

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It’s not a secret for anyone that we are going through an economically challenging period of time. Most small business owners barely manage to survive, and yet some of them continue to thrive, even in these troubled times.

I can totally relate to the majority of the small business owners; they started a company using personal funds or money borrowed from friends, relatives or banks, and then they have patiently waited their ticket for the bus that leads to financial freedom. And the future looked quite good at the very beginning; their company might have brought in a decent profit for a few years, but then the small business owner had to deal with something he / she didn’t prepare for: the global financial crisis.

Think at the exact meaning of these words for a minute:”global financial crisis”. Powerful stock markets have fallen around the entire world; huge financial institutions have either collapsed or have been bought out by larger companies that were interested in making some profit and also trying to bring back some stability into the financial system. It’s very clear that the global financial crisis has affected the lives of billions and billions of people around the planet, right?

Now that’s what I call an ideal mind setting if you are planning for disaster. If you run a small business, what better motives could you find for explaining your company’s malfunction? “Hey, man... I tried to do everything I could but I simply couldn’t save my business! With the global financial crisis, millions and millions of businesses are closing their doors, so what can I do?”

I won’t say that with hard work, any business will definitely become a huge success, but if you’ve got good, commercially-viable products and services you shouldn’t allow the lack of funds to stand in your way. In other words, if you sell great  products or services (not necessarily your products or services) AND many people are interested in what you have to offer, your company has a great potential to thrive even during these tough economical times.

Let’s take Google’s profit report as an example; Google’s profit has increased by 37% in the first 3 months of 2010 when compared with what Google made a year ago. And I can tell you for sure that with Google Instant, their profits will grow even more in the near future. On top of that, Google has hired about 800 people at the beginning of 2010; they don’t appear to be affected by the global financial crisis at all, right?

I can hear you saying that we can’t compare a small business with Google... or can we? Think about this: Google makes the bulk of its money through paid search engine advertising. If Google’s profits have grown, this means that more and more people are using its search engine to look for things that they want to BUY; otherwise, their advertising model wouldn’t work at all. So what you need to do is to try and connect with all these people and companies that are interested in your products or services without taking the lack of funds into account.

Now why do I keep repeating the “without taking the lack of funds into account” phrase? It’s a well know fact that many company owners have shut down their businesses for good because the banks stopped giving them the money they needed to run their businesses. And how can you chase those big contracts when you lack the needed funds because your bank, in order to protect itself, has invented such twisted financial products, trying to keep its risks at zero?

Purchase Order Factoring is the answer to all these questions; it offers fast, flexible funding that allows your company to grow without increasing debt. It simply doesn’t matter if you need $50,000 or $50,000,000 for the purchase order, so now you can go after that big government contract even if you are just a small business owner who has barely managed to survive from one month to the other. With purchase order factoring, the financing you’re getting only depends on your customers’ business credit, so it’s not important at all if you’ve only been in business for a few months, and so on.

Compound Profit is more than willing to help any small business owner with his / her purchase order financing needs, so Contact Us today for your free consultation.

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You know the story: you run a small business and you are doing OK, maybe even growing a little bit each year, but the lack of capital prevents you from fulfilling those big orders that would catapult you on the highway that leads to real profitability.

Unfortunately, the odds are against you: who would want to give you big contracts, when you clearly lack the needed capital in order to fulfill those huge purchase orders? If this sounds like your story, you’ll be happy to hear that the alternative financing companies have developed a solution that is specifically tailored for these situations: purchase order factoring.

Purchase order factoring (also known as purchase order financing) empowers your business, allowing you to fulfill all your sales orders, even when the needed funds are way beyond your financial capabilities.  The financing company will pay the entire amount of money to your suppliers, giving you access to contracts that are normally out of your reach and / or allowing you to keep your company’s precious cash reserve for new equipment acquisitions, rent, salaries and whatever other things you consider to be important. And all of this is made possible easily; the process is initiated by simply presenting a purchase order that comes from a trustworthy business or government institution.

Any small business owner has dealt with capital constraints; purchase order factoring is clearly a way to get out of that, allowing your business to grow more and more without depending on its internal funding resources. Getting access to the needed money right away, without having to go through the complicated steps that are required by the banks these days (and risking to be refused most times) is just one of the bonuses when it comes to purchase order factoring; many other benefits arise from having access to all the needed funds immediately, and therefore being able to overpower your competitors and get bigger discounts from your suppliers, thus increasing your profits even more.

Who can apply for purchase order financing? Virtually any company, regardless of its business credit score, the number of years in business, and so on. How is this possible? Well, the purchase order financing / factoring company only looks at your customers’ strength, so even if your company is in a less than perfect shape, there’s nothing to hold you back. Contact us to discover why thousands of customers have chosen our purchase order factoring services.

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Compound Profit designed to help small businesses get working capital

The Compound Profit Business Model requires a customer oriented Profit Advisor who is passionate about helping businesses get financing even in this tough economic climate.  The philosophy of founder James Penny is that small businesses must help themselves. 

Getting a small business loan has become harder and harder; the government is not going to help, and in many cases continues to pass laws that make it tougher to run a company and keep it in the black.   Here in Florida and around the country, we are seeing the decline of many businesses who are laying off employees just to stay alive with the hope that they can outlast the economic downturn and ongoing government interference.  Banks are finding it increasingly difficult to provide capital as regulatory guidelines tighten.

At Compound Profit, Franchise Owners such as myself want to provide assistance to businesses.  I have had the pleasure of meeting many hard working business owners who put in many long hours to provide services and products for their customers.  Some have already experienced success; others are just starting out, but have a dream and a passion.  Some were successful, but are now experiencing the impact of the economy.  Every one of those companies wants a way to increase their bottom line and / or have access to working capital.  At Compound Profit, we have services that can help increase revenue and decrease expenses as well as provide working capital. 

Here are some of our services that can provide or save working capital:

• Equipment Leasing
• Accounts Receivable Financing
• Purchase Order Financing
• Merchant Card
• Cash Equivalent Dollars (CEDA Program)
• Commercial Real Estate Mortgages

Here are services we provide that can increase revenue and / or decrease expenses:

• Accounts Receivable Financing
• Cash Equivalent Dollars (CEDA Program)
• Merchant Services
• Employee Leasing
• Collections Services
• Medical Billing

Each Profit Advisor / Franchise Owner has been trained in these services and can help the local business owners get small business loans and thus take their company to new levels.  Why not contact us today let us learn about your company, and let us offer creative, alternative methods to get the capital you need and grow your business?

Doug Linder, Compound Profit Tampa Bay, dlinder@cprofit.com

Phone: 877-386-3716 Ext 218, http://www.cprofit-tampabay.com

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Ready, Set, Go for those Government Contracts!

In the past year, construction companies across the country have seen many of their options dry up and are seeking new opportunities outside of their normal scope. There is a huge area of opportunity for small businesses in the government arena.  Many of these contracts give preference to the small local business owner / vendor.  Yes, there is a great deal of paperwork required, but the potential rewards can be very substantial.  As an alternative financing provider, Compound Profit may able to provide you with the backing you need to confidently go after these contracts.

First, we can help businesses seeking to provide finished products / equipment to the government (basically buy and resell items).   Our system of purchase order financing and factoring can support you in acquiring / delivering the products and then advancing you cash when you invoice the government.  We are also able to help with some of your government construction projects as well.

Additionally, we may be able to help you acquire the additional equipment you will need to fulfill your government contracts financing needs through our equipment lease financing – a service we may be able to provide through your regular vendors.  Rather than having a huge capital outlay for equipment, we provide funding that allows you to do monthly lease payments.  Your equipment vendor receives their payment quickly, many times half on ordering, with the remainder of cash on delivery of your equipment.  It’s a win-win situation for everyone involved.

Finally, sometimes the government wants assurance that you will have the funding available to fulfill the contract.  We can work with you on pre-approval for your contracts and provide you with documentation to indicate that you have adequate financing in place. 

Even better news – this process works with non-government contract bidding as well.  Christy Giroux, new Compound Profit of Arizona franchise owner and Regional Director, states, “As a small business owner and veteran, I’m reaching out to other small businesses to see how we can help them sustain and grow their businesses.  We want to increase their opportunities and profits.”

Christy A. Giroux - cgiroux@cprofit.com

AZ Principal / Regional Director

Compound Profit of Arizona

Cell:  520-909-7146

Office:  877-386-3716 ext. 249

Fax:  888-200-3379

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