Nothing is more upsetting than receiving a statement showing hidden excess billing charges or being cheated by an unscrupulous dealer. No one likes to be taken advantage of.They may be justified or unjustified surprises, some tantamount to being classified as unethical “rip-offs”. Unfortunately, some may be accidental accounting duplications; others may be embedded surcharges that you were not aware that you would be charged for like hotel usage. Others may be fraudulent or deceptive professional services.The worst types are “scams” where unscrupulous charges are created intentionally, or planted. Some of the most notorious industries that can create excess charges are: hotels, hospitals, auto repair, veterinarians, dentists, plumbers, website designers, and computer repair technicians.Initially, be aware how you present yourself, inadvertently announcing your income status. Walking in with a Gucci bag, driving a BMW, prices can escalate.Coming from a frugal, small Dutch Iowa town, we were taught monetary principles ingrained generations back. Immigrating to the United States in the 1800s, the Hollanders wore velvet breeches and conducted business with gold coins. They soon found they were cheated wherever they went, and finally, resorted to an “unassuming-frugal-chameleon survival code”.In other words, they learned not do display their affluence, or they would be charged more in business transactions. Currently, remaining unpretentious, few drive new high end cars and do not flaunt wearing expensive apparel with flashy accessories.There is something to be said for this dictum, because if you look foolhardy, or appear pretentious with careless spending habits, you become subject to excess service rates. There is bias with older people, teens, and women, who become targets.Or, if the proprietor finds that you are in an “emergency situation”, you can be targeted, and unethical business practices may come into play.Auto repair establishments, whether in a city or out “in the middle of no-where” like rural Utah, Kansas, or Montana, will double charge if they think they can “get away with it,” when you lack alternative options and need your vehicle.We recently had our automobile towed from a near city’s hospital to a local repair garage. Then, the same week, our second car had severe mechanical problems, but luckily, happening near the garage we routinely use, so we drove the car in, limping all the way. The proprietor, knowing we were in a health-state emergency situation, gave us excessive double-cost estimates to repair the two autos.Refusing to be victimized, the next day I called several other places to compare repair rates, and had both cars towed, a second time, from one garage to the next. I saved nearly one thousand dollars by being alert and on the offense.One of the most surreptitious situations is when you unwittingly trust an unethical dentist. With many small and midsize towns becoming filled with dental competition, some find unscrupulous ways to create cash flow. They know they can get away with fraudulent work, because their colleagues will not acknowledge investigative inquiries regarding their missteps to the State Dental Board.For some time, I was fortunate to have a reputable dentist, who did fine, professional work. When he retired, I went to an acquaintance who I thought was highly regarded. Then, a minor traffic accident unfortunately loosened four front teeth. Subsequently, to stabilize the fragile teeth, my new dentist inserted four posts without root-canals, which would create abscesses. Much successive dental work would be then required, perfect cash flow. Conversely, the expected consequential plan would back-fire. The damaged teeth all abscessed simultaneously, rather than piece-meal.Was this dentist merely a bad dentist performing shoddy work? At first, it was hard to determine.Local consulted specialists were obviously appalled, but had little to say. They advised that they had never seen anything like that before, as root canals for posts were basic Dental 101. I would have to go to another state to get a true evaluation for corrective surgery.I was further dismayed when I consulted a Dental School regarding the issue, and overheard students joking about how easy it was to practice unethical dentistry without fear of repercussions. And, make good money doing it.To avoid your own dental horror story, if you question any work at any point of a procedure, find a reputable dentist, or dental school, in another state for a complete evaluation. A local second-opinion dentist will not want to reveal or try to correct any faulty work. Remaining professionally bonded with their local colleagues, they will refer you back to the dentist who created the mess.The best way to avoid hidden fees and unethical business services is to:Research the person’s or the business’ background and reputation. Go online. Talk to people (not their references who may be shams) who have used their services. Inquire within other businesses, like real estate firms, if they have conducted work with them.
Be certain you are working with the authorized decision maker or owner when making a purchase or arranging for services.
Up front, obtain second, even third opinions regarding the work to be done.
Ask questions. Obtain firm, descriptive cost estimates in writing, and establish specific guidelines up front.
Be aware of your surroundings; read body language.
Do not sign any document without carefully reading the fine print.
Carefully review all billing statements and inquire if you note discrepancies
Avoid Excessive Over-Charges or Unethical Business Practices
Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?
There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.
In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.
But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.
Different Types of Financing
One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.
Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.
But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.
Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.
Alternative Financing Solutions
But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:
1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.
2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.
3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.
In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:
It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.
A Precious Commodity
Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).
Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.
Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?
What We Have Here Is A Failure To Communicate
The results of this past election proved once again that the Democrats had a golden opportunity to capitalize on the failings of the Trump Presidency but, fell short of a nation wide mandate. A mandate to seize the gauntlet of the progressive movement that Senator Sanders through down a little over four years ago. The opportunities were there from the very beginning even before this pandemic struck. In their failing to educate the public of the consequences of continued Congressional gridlock, conservatism, and what National Economic Reform’s Ten Articles of Confederation would do led to the results that are playing out today.. More Congressional gridlock, more conservatism and more suffering of millions of Americans are the direct consequences of the Democrats failure to communicate and educate the public. Educate the public that a progressive agenda is necessary to pull the United States out of this Pandemic, and restore this nations health and vitality.
It was the DNC’s intent in this election to only focus on the Trump Administration. They failed to grasp the urgency of the times. They also failed to communicate with the public about the dire conditions millions have been and still are facing even before the Pandemic. The billions of dollars funneled into campaign coffers should have been used to educate the voting public that creating a unified coalition would bring sweeping reforms that are so desperately needed. The reality of what transpired in a year and a half of political campaigning those billions of dollars only created more animosity and division polarizing one extreme over another.
One can remember back in 1992 Ross Perot used his own funds to go on national TV to educate the public on the dire ramifications of not addressing our national debt. That same approach should have been used during this election cycle. By using the medium of television to communicate and educate the public is the most effective way in communicating and educating the public. Had the Biden campaign and the DNC used their resources in this way the results we ae seeing today would have not created the potential for more gridlock in our government. The opportunity was there to educate the public of safety protocols during the siege of this pandemic and how National Economic Reform’s Ten Articles of Confederation provides the necessary progressive reforms that will propel the United States out of the abyss of debt and restore our economy. Restoring our economy so that every American will have the means and the availability of financial and economic security.
The failure of the Democratic party since 2016 has been recruiting a Presidential Candidate who many felt was questionable and more conservative signals that the results of today has not met with the desired results the Democratic party wanted. Then again? By not fully communicating and not educating the public on the merits of a unified progressive platform has left the United States transfixed in our greatest divides since the Civil War. This writers support of Senator Bernie Sanders is well documented. Since 2015 he has laid the groundwork for progressive reforms. He also has the foundations on which these reforms can deliver the goods as they say. But, what did the DNC do, they purposely went out of their way to engineer a candidate who was more in tune with the status-quo of the DNC. They failed to communicate to the public in educating all of us on the ways our lives would be better served with a progressive agenda that was the benchmark of Senators Sanders Presidential campaign and his Our Revolution movement. And this is way there is still really no progress in creating a less toxic environment in Washington and around the country.