The Deal Really Could Be A Steal
Written by:
Steve Chittenden
Article Overview: The Internet has perhaps helped business like no other tool ever conceived. It helps level the playing field, especially for small business. As you might expect, it also has a lot more on its dark side than Spammers and hackers. There are other dangers you need to know about to protect your business.
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The Deal Really Could Be A Steal
There are many ways to get a deal these days, but before you give in to the temptation to jump on board thinking you are saving a lot of money, consider things in perspective. If someone walked up to you wearing a trench coat offering a deal on an expensive watch, your instincts would tell you it is most likely stolen. If you bought it anyway, you would be just as guilty as the thief.
When you are dealing with the Internet, the guys in trench coats can put up a respectable looking site and make themselves look just like a fine jeweler. If their prices are about the same as everyone else, then it may be harder to spot the frauds. When they are offering an incredible deal, consider it not worth the risk.
To make matters worse, endorsements from respectable sources might not even be enough. As I wrote this article, the graphic design industry had just made a discovery, and they were rightfully outraged. The law is on their side too, so in the near future, many unsuspecting businesses are likely to find themselves faced with expensive lawsuits.
A major online logo provider seemed at first to be just an annoyance to respectable graphic designers who create logos for businesses. The company offers logos for rates that should make anyone suspicious, but they managed to get some endorsements from sources such as The Wall Street Journal. As it turns out, many of the logos they sold were stolen. There is mounting evidence against them for trademark infringement and the buyers can be held just as liable as the thieves.
This is not an isolated case. The growth of the Internet makes this form of theft more common, but also easier to catch. I am finding the content I create being stolen more frequently. If I can help spread the word, maybe we can help reduce the problem.
There is a growing trend toward outsourcing offshore for just about everything. Manufacturers have struggled with idea theft from offshore companies for decades, but copyrights and trademarks are more easily enforced in the US. Before you jump into a great deal by turning to offshore outsourcing, intellectual property rights should be one of your main concerns.
Suppose you had a web site developed in India (either directly or through a company that uses offshore outsourcing), and instead of creating original content, they steal it from various sources and pass it off to you as their own work. It is an unfortunate reality that offshore sources outside of U.S. jurisdiction are also a breeding ground for all forms of pirating.
When a copyright owner discovers your site with stolen content, they, or their legal firm Dewey, Stickem, & Howe, will contact you about it. Since prosecuting the offshore company is more difficult, and the copyright owner may even be more irate that you used an offshore outsource to steal their work, you could legally receive the full brunt of their wrath.
Copyright and trademark infringement is not flattery to the owners. Original work takes creativity, thought, effort, research, money, time, and other resources. Stealing it is easier, and buying from a thief is often cheap, but also risky. These thieves are smooth con artists. They may appear very professional, but it's because they steal from people who are professional.
The Internet is a great place for the free sharing of information. It is completely understandable that no business owner wants to be charged too much for professional services. Just be aware that sometimes the bargain doesn't just bite, it can tear you to pieces if the one providing it is using unethical standards.
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Who inspired you to start?
- When I was a teenager I read "The Art of the Deal" by Donald Trump while on a road trip to New York City. It helped inspire me to want to start my own business and is also one of the reasons why I have created so many famous entrepreneur profiles. I believe that by modeling the success of other entrepreneurs you too can become successful.
Who was it that inspired you to start your business?
Trump and Stewart
- I really enjoyed Trump: The Art of the Deal and The Martha Rules. I think the best advice you can get is from people who have made it and not just consultants who haven't been there. Evan's site is great because of all the famous entrepreneurs and their advice directly from them.
Donald Trump and Martha Stewart are 2 great examples of successful entrepreneurs and the books are written in their own words which I find extremely valuable and motivational.
Re: Obama Wants Social Security for Illegals
- [quote="Alan Mater":2puakyzo][quote="Lucy Wu":2puakyzo]I think America's biggest problem right now is clearly the recession, and that should be the main focus as of now.[/quote:2puakyzo]
I agree. Do you think President Elect Obama is doing or will do what is best in terms of beating this recession?[/quote:2puakyzo]
Unfortunately, I think Obama is going to pull another "Roosevelt." According to economists, Roosevelt's plans for the New Deal extended the Depression by 7 yeasrs...
We can already see today that nothing has "changed." Incompetent bankers, lenders, and businessmen get into trouble, the politicains vote to give them billions of dollars of *our* money to bail them out...and yet there is no oversight of how the politicians are going to spend that money! They can do anything they want with it including bailing out the auto companies.
Frankly, I sure do wish I worked for Chrysler right now. They've shut down all their plants... and yet every worker will continue to be paid their full salary...for sitting around the house doing absolutely nothing. (I wonder if they'll get Christmas Eve and Christmas Day triple time pay, too.)
Re: Obama Wants Social Security for Illegals
- [quote:21pbp7ux]Unfortunately, I think Obama is going to pull another "Roosevelt." According to economists, Roosevelt's plans for the New Deal extended the Depression by 7 yeasrs...
We can already see today that nothing has "changed." Incompetent bankers, lenders, and businessmen get into trouble, the politicains vote to give them billions of dollars of *our* money to bail them out...and yet there is no oversight of how the politicians are going to spend that money! They can do anything they want with it including bailing out the auto companies.
Frankly, I sure do wish I worked for Chrysler right now. They've shut down all their plants... and yet every worker will continue to be paid their full salary...for sitting around the house doing absolutely nothing. (I wonder if they'll get Christmas Eve and Christmas Day triple time pay, too.)[/quote:21pbp7ux]
This is what happens when the Government gets involved and puts its nose where it shouldn't. Let the market correct itself. There is no reason for the Government to bail everyone out. If the businesses, mainly banks, weren't corrupted with greed, this wouldn't have happened. They are and it did, so let them dwindle away and pay for their mistakes. That's what any small business has to do. Why should they be any different. They have gotten away with it for over 10 years! Surely they should have seen this coming.
[quote:21pbp7ux]Sad but this is exactly how I feel about it. Change is coming - but unless I'm really wrong, it is not a change this country needs. Amazing how much a good speaker with a good speech writer can do. If you paid attention to the things he said "off script" - much of it is frightening.
Chris[/quote:21pbp7ux]
It IS sad. What's more sad is the fact that Obama had the media wrapped around his finger, and still does. The media is just as corrupt as the banks.
Different Types of Funding
- Finance for business can be obtained through a number of different sources.
Let's review some of those channels to help you decide what's right for your business needs:
Grants
There are over 930 different EU and UK grants and loans available from over 100 issuing bodies. This is the cheapest form of finance and an important part of the funding package that companies and individuals need. We can help you find your way through this maze.
Technology
Micro Projects: 50% of eligible costs up to £20,000
Research project: For a technical and feasibility study of an innovative idea for new technology 60% of costs up to a grant of £75,000.
Development project: For development up to pre production 35% of costs up to a grant of £200,000
Developing an innovative idea: valuable for small companies and individuals at the start of a technical project: 75% of costs of hiring a mentor and consultants.
Export
To start exporting or moving into new markets grants of 50% of costs up to £20,000 each.
Training and Education
Knowledge Transfer Partnerships, Achieving Best Practice in Your Business, Investors in People
Modern Apprenticeships
New Deal for various grants.
Environment
BOC Foundation for the Environment: 25% to 50% of Project cost, typically £20,000 to £100,000
Clean up Fund: Emission reducing equipment up to 75% of cost
Community Chest Fund: Up to £25,000 for projects near active SITA sites
High Impact Fund: £150,000+ for larger projects near SITA sites
Assisted Areas
Regional assistance grants of between 10 and 35% for capital expenditure in less favoured areas of the UK.
Loans
Loans are an excellent source of finance if you have suitable security to borrow against or a reliable earnings stream. This needs to be planned and presented well to obtain funds.
Credit cards
Provides up to 56 days free credit if you play the game!
Overdraft
Banks are surprisingly supportive when presented with a well thought through plan and competent management.
Bank Loans
Lenders tend to look for a good business plan and security. Typically the loan is approved by a centralised back office function rather than the person you meet. Terms and rates depend upon the risk. Repayments can be very flexible to meet your specific needs.
Mortgages
These can include flexible repayment terms to meet your business needs. This can even be incorporated into your overdraft finance so that you have one flexible account for both personal/ business mortgages and overdraft
Small Firms Loan Guarantee Scheme
Up to two years trading: Up to £100,000
Over two years trading: Up to £250,000
However these are difficult to obtain and are a loan of last resort.
Export Guarantee Scheme
This is government backed insurance against appropriate export documentation.
Mezzanine
This is a halfway house between loan and equity. It can be an innovative way of raising funds for the more established business. Mostly for expansion capital.
Equity
This is not as easy as the papers would have you know. Only 1% of business plans received by Venture Capital Funds are successful. However, a good business proposition consisting of a strong demand for the product or service, management track record and a sound financial plan will enhance the chance of success.
Business Angels
These are high net worth individuals who are successful businessmen looking for investment opportunities. They can provide both time expertise and money. Typical investment size is £25,000 to £250,000 but can go as high as £2m for the right opportunity. Exit within 3-5 years.
Venture Capital
These are investment funds seeking high rates of return. However typically investments are over a million pounds. Some funds are targeted at lower amounts depending upon the sector and region. These funds are looking for exponential capital growth over 3-5 years.
Asset backed finance
This can cover machinery, sales invoices even sales orders. It can be a very flexible source of finance to the growing business
Leasing
This will cover your capital expenditure and spread the cost over a three to five year period. It is particularly useful if you do not have taxable profits to maximise your capital allowances.
Sale and leaseback of a property you own is another good source of funds.
Factoring
Factoring offers a sales ledger administration and debt collection service. Up to 95% of an approved sales invoice is paid within 48 hours, quicker if required. Credit protection is also available to protect against a bad debt. The Factor will own and place a first charge over the book debts and they might also take other charges, depending upon the strength of the financial information.
Invoice discounting
Invoice Discounting can be Confidential or Disclosed; it depends upon the strength of the financial information. The service is the same as Factoring, except that the sales ledger administration and the debt collection is the responsibility of the client and not the Factor. Pre payment of the approved sales invoice is still up to 95% and the factor will still have a first charge on the book debt and therefore own the debt. This service can also have credit protection cover. All sales invoices need to be for a business to business debt, and some proof of delivery is generally required.
Trade Finance
This is funding provided against stock purchases, signed contracts and orders whereby the funder will prepay a certain percentage of the value
Pension fund
It may be possible to use your pension funds for a loan back to the business
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