Online Guide to Payday Loans

Harnessing the true power behind a loan

Across organizations, even in today’s flatter organizational structures, “silos” rule. Breaking down barriers and getting departments and functions to align and work well together are the biggest challenges I see in business today. The lack of trust and the misaligned goals, objectives, reward structures, and priorities create conflict and turmoil that undermine business strategies and leave customers and suppliers wondering what’s happening. Based on the requests we get from clients, this important internal partnership is one of the most neglected in many organizations.

Employees are the unsung heroes in the front lines of business. They are your business personified. Without the faces, voices, and brains of these people, your customers’ needs would go unmet, your strategies would go unfulfilled, and your profits would be nonexistent.

Yet in many cases we treat employees as though they were commodities to be used and discarded.We manage them like we manage a process and fail to treat them as partners in the enterprise. Harnessing human energy, focusing it, and directing it is the most important task of leadership and the most effective technique to capture their brains and spirit through a sense of partnership.Make them partners in your success and you will be successful.

An effective partnership is the core of good credit

The ability to form and sustain both internal and external partnerships is the hallmark of a partnering culture. Each type, of course, involves different players, though they may interact with each other. External partners include people outside the organization such as suppliers, vendors, distributors, and outsourcers. Internal partners reside within the organization, such as those in engineering, design, marketing, IT, or human resources.

Internal Partnerships

Organizations that cannot partner internally will have difficulty partnering externally. Creating excellent working relationships within your organization is a hallmark of a smart partner. Internal partnerships—that is, partnering relationships within a company—can exist between: Executive leadership team peers. Executives and managers between organizational functions or departments.  Leadership and employees.

An effective executive team is the core of internal partnerships. Unless executives operate with the Six Partnering Attributes of smart partners, they risk communicating and behaving in ways that undermine their ability to create a partnering culture. Employees watch what leaders do, not say, and then follow their example. Actions trump words every time.

Loans aren’t just nuisance, they can be beneficial

No matter how beneficial a partnership may be from a financial or transactional perspective, if the relationship isn’t satisfying for the partners, the partnership will ultimately fail. Consider the analogy to personal relationships. Think of the number of people who have lowered their economic standard of living to get out of a bad marriage. People will leave behind the house, the money, the dog, and sometimes even the kids to escape the pain of a dysfunctional relationship. Sometimes even the threat of losing everything is not strong enough to convince partners to endure a marriage on the rocks. Divorce is the less painful alternative.

Fortunately, another choice is available.We can choose to change ourselves.We can commit to changing our attitudes and behavior. We can examine ourselves and work to revitalize the partnership. Easing the pain is one motivation for changing ourselves. Preserving what we’ve built together is an incentive for working hard on relationship issues. Just as a good counselor can help a dysfunctional marriage get back on track, a good business consultant can help fix a business partnership. But first the partners have to acknowledge the importance of the relationship. Then they can discover how to improve it.

Handling a credit requires some skills

The partnering skills that engender customer loyalty are the same skills that employees practice with each other. Ritz-Carlton Hotels trains its employees to behave as “ladies and gentlemen serving ladies and gentlemen.” As we treat the people we work with, so we treat our customers. The same communication dynamics—including clear, respectful messages between managers and employees—will enhance customer satisfaction. The absence of good relationship skills in a company precludes the possibility of building good customer relations.

Organizations, businesses, nonprofits, communities, and even governments are coming to understand that in today’s global world, “going it alone” is tough. Going it alone means an organization needs to provide everything for itself—which is impossible. Even the loner, the solo flier, and the maverick have at least superficial relationships. Businesses just can’t exist without some kind of relationship with others. Like the stereotypical one-night-stand character, some businesses accumulate relationships that are just as shallow, temporary, and meaningless.

Important changes to credit law

These impediments do not directly affect the trading or profitability of your business, but they do influence either your ability to exit successfully, or the freedom to plan as you would like, or (in the case of lack of taxation planning) the net amount of money you are likely to be able to keep after sale.

OWNERSHIP ARRANGEMENTS: SHAREHOLDERS’ AGREEMENTS

Where you have co-owners in a business, the lack of a properly drawn up shareholders’ agreement reduces your ability to exit at the time of your choice, because you might need the cooperation of your co-owners to do so. This is a problem that can be prevented by entering into an agreement early in the life or your business, preferably at the time of the share issue.

CHANGES TO THE LAW

Businesses may be based on a demand that springs from legislation, or lack of it. ‘Speakeasies’ in the United States arose because of prohibition; the home brewing business in Scandinavia is successful because it is legal to brew beer and spirits in Scandinavian homes. Changes in legislation had, and could have, a dramatic effect on both business niches. They could also have a dramatic impact on your business. Where you are aware that your business will be adversely  affected by changes in legislation, you have some stark choices. Either you reinvent your business through developing new products and markets, or you try for a quick sale (which will probably be at a depressed price because your buyer will be aware that he has to fix the problem), or you endure alingering business death and eventual close down.

Having an unsolvable credit problem

An important fact that might come as a surprise to those unfamiliar with business disposals is that, unlike real property, which will eventually sell, if you reduce the price sufficiently, some businesses will never be sold regardless of their sale price. This is, usually, because the business is a liability. For example, it could be losing money, or be in too much debt; or it could be that potential purchasers think its operations or assets will never earn a profit.

The structural aspects of a business that make it unsaleable could be considered as ‘barriers to exit’ whilst the operational issues that reduce its attractiveness to buyers I call ‘impediments to sale’. Through the exit planning process barriers and impediments to sale should be identified at an early stage and removed (or corrected) over a period of time, hopefully well before the need to sell arises.

As an owner, your objective should be to sell a profitable and vibrant business at the optimum market price. The worst outcome for you will be to try to sell a tired, disorganised business that is shrinking instead of growing steadily, and end up having to close it down. Allowing yourself enough time to remove your business’s impediments could be vital if you are to achieve all your exit goals.

Choosing the optimum credit option

We have now got to the stage of choosing the optimum exit option, which is a convenient place to consider where we have got to with our exit planning so far.

Initially we asked you to establish your business ambitions, or what you wanted from your business. This led you to thinking about your exit. From here we considered some basic issues such as ownership structure, why and when you might exit and the pros and cons of having co-owners. Next we considered Business Continuity Planning and the very important issue of shareholders’ agreements. Then we looked at the various exit options available to SMEs, which has brought us to where we are now: how to choose the optimum exit that is best suited to your business.

This brings us to the start of the process of looking at your business’s operations, making operational plans and putting the business into shape for exit. This will lead us to identifying and removing impediments to sale and the task of tailoring your business to suit the exit option you have chosen. From here it is a short step to producing a Master Exit Plan, implementing this plan and arranging the disposal itself.

The final choice of credit option

You should now have a good idea of the exit options that are realistically available to you and the one that is, probably, your optimum one. The final choice is down to you because, as the business owner, you should be the best person to know the potential of your business and how it can be best presented to advisors and, ultimately, to potential purchasers. Where your own personality is a factor in the success or otherwise of the exit option (such as in a flotation or franchising), you should also be in a good position to know whether you are likely to be up to the task. This knowledge, coupled with a thorough understanding of each option will enable you to reach a measured decision, either on your own, or in collaboration with professional advisors on which option is the one that will maximise your exit outcomes.

Timing your payday loan appropriately

The timing of any business sale is always a difficult issue. It is impossible to be sure of economic cycles and the changes in the financial desirability of industry sectors. Our approach in this book is to advise you to groom your business for disposal through a managed exit strategy with a target date in mind, but also to be prepared to postpone the sale in the case of an economic downturn at the time you plan to sell. Your exit planning should have made big improvements in your company’s operations and turnover (and, hence, its profitability), so that you will be reaping current rewards anyway and, hence, be in a good position to wait a while until the market improves, if this is necessary.

The final question is whether you can put your business into the state it needs to be to take advantage of the option you have chosen. For example, will you be able to grow the business (both organically and, if necessary, by acquisition) to reach the minimum size requirement to attract institutional support for a flotation? Or, if you have identified an MBO as your optimum exit route, will you be able to put together a management team that is likely to get the support from VCs that is necessary? In a trade sale, will your business be attractive to the pool of potential buyers you have identified? Positive answers to these questions could rely on whether you have given yourself enough time to plan, or whether you are able to remove the business’s impediments to sale, or perhaps it depends on the projected and actual state of the economy with regard to business values in your sector.

Other important loan considerations

Returning now to choosing a final exit option. The worksheet is a useful way to begin to understand the exit options that could be open to you. We do not pretend that it is the only way, or that it is a substitute for expert advice and an understanding of what works best in your industry. When you have worked through the elimination worksheet and read the following chapters in this book, you will, at least, have a framework to identify the best disposal option for your business with some certainty.

The other considerations that will be important to all owners will be the costs of planning and implementing their chosen exit, the impact of taxation on the particular exit method chosen and whether you have the time and are able to put your business in shape to meet the requirements of the exit option you have chosen.

The costs of exiting your business will vary greatly depending on the route you choose and how much professional assistance you require. For example, should you decide to go down the trade sale route and handle the sale yourself this will be far, far cheaper than floating your company on the Main Board of the London Stock Exchange. But, in reaching this decision the real issue is what are the total net sale proceeds from either route: that is, the net benefit rather than the gross cost. Again, you will have a better idea of this once you have read this book and taken the appropriate advice.