Small-business briefs

The latest news and advice for small-business owners, at a glance.

Small-business owners confused about financing sources

Nearly half think consumer loans can fund a business

Although growing their enterprises is the top priority for small-business owners, their understanding of the financial tools available to help drive business growth is mixed at best, according to survey results by the OPEN from American Express 2006 Semi-Annual Monitor.

Nearly 4 in 10 small-business owners (38 percent) rank growing their enterprises as the single most important priority over the next six months. Yet when it comes to business loans, lines of credit and other sources of financing, small-business owners have a lot to learn, the study found. Nearly half (49 percent) incorrectly believe a consumer loan can generally be used to help fund a business. This misunderstanding is actually higher among those planning to use a bank loan or line of credit to finance growth over the next six months (61 percent). Similarly, many small-business owners (46 percent) believe incorrectly that banks commonly make loans to loyal customers who are in the midst of a cash-flow crunch. Just over a third (34 percent) believe, again incorrectly, that a term loan and a line of credit are pretty much the same, and nearly 4 in 10 (38 percent) believe it’s a good idea to apply to as many lenders as possible when seeking a loan. In fact, the opposite is true, says Susan Sobbott, president of OPEN from American Express.

There is also confusion among small-business owners about the availability of venture capital—only 43 percent correctly believe that venture capital is available to them as a source of funding.

“In speaking with small-business owners, I have learned a company’s first thought when it has cash-flow issues may be to look for financing, but this may be the worst time to seek funds,” Sobbott says. “Instead, business owners should consider applying for a line of credit when cash flow is strong, in order to have peace of mind and comfort, knowing that they have funds they can tap into when cash-flow issues arise.”

Business owners scored well, however, in understanding the importance of credit history in securing financing. More than three-quarters (80 percent) answered correctly that personal credit history impacts their ability to find funding for their business. Seventy-two percent knew it is true that business credit history is usually the most important factor when it comes to getting a loan for their business.

Small-business owners plan to finance growth by:

• Reinvesting profits (46 percent)

• Taking out either a bank loan or a line of credit (20 percent)

• Seeking private investors (4 percent)

• Borrowing money from friends or family (3 percent)

• Using venture capital sources to fund growth (2 percent)

Among business owners planning to take out a bank loan or line of credit to manage their business:

• 83 percent plan to place more focus on serving customers

• 70 percent plan to make investments in the business

• 69 percent plan to cut expenses

• 60 percent plan to cut back on personal spending

• 43 percent plan to raise process

• 40 percent plan to add staff

going postal

The USPS can serve many of your shipping needs—for free

As a small-business owner, you may not want to spend a lot of money on shipping and packaging supplies. Well, Uncle Sam is coming to the rescue. You can order the same supplies that the U.S. Postal Service (USPS) uses for no cost—and have them delivered to your door. The USPS can supply you with Priority Mail packaging for books, videos, CDs, cassettes, dual videos and bonders, as well as tubes for shipping posters; and it can even print labels for you with your business name. Call the USPS at 800-222-1811 and ask them to send you a supply order form, or order online at supplies.usps.gov. If you want a face-to-face meeting to discuss your individual needs, call your local office and meet with the person in charge of mail order. Of course, you’ll still have to pay for the postage. But wait, there’s more: The USPS has an area on its Web site for National and Premier Accounts, aimed at sophisticated mailers who use multiple, complex-mailing products at various locations. The site has information on planning and designing a cost-efficient mailing plan, in addition to verifying and transporting your mail and tracking it.

my name is…

Where to get bilingual business cards

If you’re doing business overseas, it may pay to have double-sided business cards printed up, with a foreign-language translation on the flip side. Here are some online printing companies where you can have them made: vistaprint.com, overnightprints.com and colorprintingwholesale.com.

fancy wheels

Skip the standard sedan—rent a Ferrari

If you’re really trying to impress a client, consider renting a Ferrari, a Bentley or even a Hummer. Where can you find such rental vehicles? The Rent Exotic Cars Network (rentexoticcars.net) says it has the most comprehensive listings of U.S. exotic car rental agencies on the Internet. “Rental agencies listed go through a process to ensure that they have an actual physical presence in the city they are listed for, and a review of their inventory to assure they meet the test for the index,” a Rent Exotic Cars Network spokesperson says. But luxury doesn’t come cheap. Rates for a Porsche 911 Turbo Cabriolet run $999 a day or $5,999 a week (but with 50 free miles a day). A Mercedes SLK 350 is $225 a day or $1,350 a week. And that Ferrari 360 Modena? It’ll set you back $1,800 a day or $10,800 a week (not including speeding tickets). But, of course, you still get those 50 free miles a day. What a deal.

bargain bedrooms

New extended-stay chain offers economy lodging

Say you splurge on the aforementioned luxury rental car, and as a result, you need to stay in modest accommodations. Value Place (myvalueplace.com) is an extended-stay economy hotel chain offering weekly rates as low as $159. So far, the company has signed up about 500 franchise properties in less than two years. Founder Jack DeBoer, whose past experience includes operating Residence Inn, Summerfield Suites and Candlewood Suites, plans to spend $2 billion developing the Value Place brand. Currently, there are 23 Value Place hotels in 11 states, with plans to open in 17 additional states.

from here to china

UPS opens locations in Shanghai

United Parcel Service reports it has opened two UPS Express retail centers in Shanghai, its first retail endeavor in China. The stores are located in Shanghai’s central business districts: one in the Shanghai Stock Exchange building and the other in the Shanghai Mart Convention Center. FedEx Kinko’s and DHL Worldwide Express also specialize in shipping to China and have retail centers there.

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karen goodwin is a freelance writer based in Colorado. Email Karen at editor@executivetravelmag.com.