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December 30, 2009

Bait & Switch

Filed under: Leasing tips — Tags: , — afp @ 10:49 am

ice houseHow many of you thought I was going to write about ice fishing today?  Well, being from Minnesota I really should get bundled up for a day of fishing on an icy lake, but I would rather be in a salon getting a pedicure!  My blog today is on neither however. 

Bait & Switch is one of the oldest tricks in the book, not just in leasing but in any business in any industry.  The purpose of the bait and switch tactic is to get customers to visit a store or business by advertising very low prices and then once the customer visits the prices are actually much higher than advertised.  In the leasing industry, the leasing company will get the customer to send in advance rental payments and documentation fees with a lease proposal showing lower payments than can be offered.  Then once the leasing company has the customer’s money, they make up a reason why the customer can’t get the payments and terms they were quoted and sends them lease documents with the “real” payments which are higher than agreed upon.  The leasing company refuses to return the customer’s money trying to bully the customer into signing a lease they never agreed to.  Some companies think by simply faxing a check they are safe, but this option doesn’t secure the customer either.   Leasing companies (and other businesses) can ACH the funds from a customer’s account using a faxed copy of a check; a physical check is no longer needed.

Companies as large as Dell have been accused of bait & switch techniques in the past.  Several large leasing companies have been guilty of stealing money from customers using these bait & switch techniques. With the economic downturn in 2009, we saw an alarming increase in these techniques in the finance industry.  Many of these leasing companies are desperate to increase slumping sales, and others are just in it for a quick buck. They are not merely telling “little white lies” to the Applicants, they are just plain lying, deceiving and in a lot of cases defrauding the Applicant.

With that being said, here are some tips on how to make sure this doesn’t happen to you:

1)       When working with a leasing company you haven’t done business with in the past, check out their Better Business Report at http://www.bbb.org/us/Business-Search/ and search for their name on a popular leasing news website called www.leasingnews.org.  Some of the companies who have used bait and switch in the past are signaled out in this news website.  Some past upset customers have created websites detailing how specific companies defrauded them using bait and switch.  Search for the company on the Internet through Google or another search engine and see what you can find on them.  Ask for customer references and call them. 

2)       If the leasing company sends you a proposal, make sure you have it in writing that they will return your money if they do not provide you the terms on the proposal you are signing.

3)       If you do send money, the approval doesn’t come through and the leasing company refuse to return your money, tell them you will report them to the Better Business Bureau and the Leasing News website.  No one wants bad press and if what they did was truly bait and switch they will probably just return your money versus having negative information reported about their company.

There are a lot of very good leasing companies that can help you with the financing you need to grow your business.  Just make sure you do your homework and know the company you are working with is a good one.

December 28, 2009

Give Your Customers a Year-End Review

Filed under: Sales Tips — Tags: , , — afp @ 12:45 pm

As you sit back and reflect on 2009 I’m sure all of us can think of some great things we did for our customers.  We have all bent over backwards before to earn a customer’s business or to keep a current customer happy.  You remember these occurrences, but does your customer? 

A year-end review to your top customers can be a tool to not only remind them of all of the great ways you helped them personally or professionally throughout the year, but it can also start conversations about how you can continue to help them in 2010.  You want them to share their business goals for 2010 with you and involve you in the conversations of how they can get there.  You can provide insight as to how your business can help them achieve those goals.  Be their partner and make sure they know you want to continue to have a presence in their business in 2010.  Here are some ideas to cover in your year-end review with your customer:

1)       Detail every project or program you completed for them along with the financial benefits they recognized from it

2)       If you can, note how the above project/program helped them grow their business.  For example, if you manufactured a machine for your customer and it helped them to gain a $2 million account, make sure you point out that it was your machine that got them that account

3)       Remind them of any other tools or services you provide that help them in their business or help make their lives easier.  Maybe you helped train an employee or referred them a customer. 

4)       Year-over-year comparison

5)       Future partnership plan:

  1. Walk through the customer’s future business objectives and find out how you can help
  2. Ask your customer what their expectations are for your future partnership

As you are walking through the ways you have helped their business, now is the perfect time to ask them for a testimonial.  Have them write-up a testimonial on how you helped their business and post that on your website or in your marketing material.  Since you are looking to create a true partnership with your customer, tell them about your company goals in 2010 and where you see them fitting into your goals.  See if they have any ideas to help your business.  Sometimes your customers can provide the best insight on things they see you could improve on in the future.

December 23, 2009

The Great Midwest Blizzard!

Filed under: General — Tags: , — afp @ 3:41 pm

blizzardAs we approach the holidays, I always get excited about spending time with my family, enjoying a glass of wine with my sister-in-laws, watching the kids get so excited when opening their gifts and of course, sampling all of the great food.  This year is going to be a little different as our region is experiencing the Great Midwest Blizzard.   Knowing that my family will probably be stranded at home this year for Christmas and not able to share this special time with our extended families, much like most others in our region, I have put together a top 10 list of things to do during the blizzard. 

10.  Listen to the local radio stations list every single school/business/church closing (I will never understand why they don’t just list who is crazy enough to be open?)

9.  Shovel, shovel, shovel

8.  Convert the number of inches of snow to the metric system

7.  Make the biggest snowman in the entire free world

6.  Figure out where you parked your white Mitsubishi on the street

5.  Turn the fire place up, get the toy out of the baby’s crib that sounds like the ocean tide rolling in, throw some sand on the floor, get out the lawn chairs, crack open a Corona and pretend you are in Mexico

4.  Think about all the things you don’t have to do now. You don’t have to mow the lawn, pick up dog poop, wash the car, water the flowers, sweep the driveway or take out the trash. All you can do is relax and ride out the storm. It’s the perfect excuse to be lazy.

3.  Drool over the current temperatures in Alaska

2.  Shop online for a condo in Florida

1.  Drink hot chocolate with mini marshmallows while watching the 24 hour marathon of “The Christmas Story” on TBS!

I hope everyone has a great Holiday season!!

December 21, 2009

Signs of Economic Recovery

Filed under: General — Tags: , , — afp @ 3:02 pm

dollarThe economy is primed for a stronger finish to 2009 than most forecasters and business executives expected just a few months ago, prompting tempered optimism that employers may resume hiring early in the next year.

While the economy’s strength in 2010 is still a matter of debate, the pace of the recovery seems to be picking up stream.  A broad spectrum of companies from shippers to makers of mining equipment have reported signs of improvement recently.   Software company Oracle Corp. reported sales and profit gains as projections show large increases in technology spending for 2010, while the chief executive of FedEx Corp., declared the U.S. economy has reached a “turning point.”  The government reported on December 11 that retail sales rose a seasonally adjusted 1.3% in November from the previous month.  Even the labor market is looking better as November had the fewest job cuts since the recession began in December 2007.  The temporary-help sector, an early indicator of employer trends, expanded for the fourth month also. 

One of the biggest wild cards facing U.S. equity performance in 2010 is the fate of the dollar.  The US Dollar has traded near a three-month high against the euro showing signs that the global economic recovery is gaining ground.  American consumers earned and spent more in November giving retailers and real-estate agents reason to anticipate business will improve in 2010.  U.S. household purchases rose 0.7% for a second month and incomes climbed 0.5%, the most since May.  Combined sales of new and existing homes last month may have reached the highest level since May 2007.  Lingering credit concerns in Europe helped boost demand for the dollar.  Demand for the euro was limited as the European Central Bank said lenders may have to write down an additional 187 billion euros ($268 billion) as loans to property companies and eastern European nations threatened the financial recovery. 

The series of better-than-expected data could set the Federal Reserve up for some challenging debates about interest rates in early 2010.  Prices remain under control and most Fed officials believe that high unemployment and other forms of economic slack will keep inflation down for a long time. That has given them comfort to say they’ll keep short-term interest rates near zero for an “extended period.”

Read more at http://www.bloomberg.com/apps/news?pid=20601087&sid=aXo7fC7feius&pos=1

December 16, 2009

Monitizing: Wrap equipment and services into one contract

Filed under: Leasing tips — Tags: , , — afp @ 1:04 pm

Banks and leasing companies have cringed in the past at the thought of wrapping maintenance and service into a lease or finance contract.  There is a program available called Monitizing that allows the vendor to wrap all of these items into an agreement for the customer so it becomes one comprehensive contract.  Each transaction is a custom product designed to meet the needs of the vendor/service provider and their end user. The contract is a comprehensive, proprietary usage/management agreement encompassing both the service and equipment portions of the contract.  The bank bills the customer for the total contract payment, directing payment to a lockbox where it is then split and the non-tangible, service portion of the contract forwarded back to the vendor on a monthly basis.  The underwriting focuses on the credit worthiness of the end user for whom the services are being provided.  End users should be near investment grade or investment grade and exhibit a S&P bond rating of BB or better.  Any manufacturer, vendor or service provider who provides a service under contract and utilizes some equipment to provide the service would qualify for this program.

Examples of potential monetized situations could include:

  • Vegetable bin vendor providing service and equipment to very large food processor. 
  • Security and Surveillance vendor providing service and equipment to large retailer. 
  • Satellite Data Communication vendor providing services and equipment to very large national bank.
  • Fertilizer manufacturer providing organic waste to large livestock vendor.
  • Water Treatment Plant manufacturer providing service and equipment to very large international candy maker.
  • Ice Machine manufacturer providing service and equipment to national grocery store chain.

If this program could benefit you or if you have further questions, please contact AFP.

December 14, 2009

Do you have a Social Media Strategy?

Filed under: General — Tags: , , , — afp @ 6:13 pm

If you think Social Media is something your business doesn’t need, read some of these stats:

  • It would take 412.3 years to view every YouTube video
  • The monthly growth rate of Twitter users from January to February 2009 was 1382%
  • There is an average of 3,000,000 Tweets per day on Twitter.com
  • There are 5,000,000,000 minutes spent on Facebook each day
  • If Facebook were a country, it would be the 8th most populated in the world, just ahead of Japan
  • 93% of Social Media users believe a company should have a presence in Social Media
  • 85% of Social Media users believe that a company should go further than just having a presence on social sites and should also interact with its customers

“For companies, resistance to social media is futile.  Millions of people are creating content for social Web.  Your competitors are already there.  Your customers have been there for a long time.  If your business isn’t putting itself out there, it ought to be.”  Business Week, February 19, 2009

Officially, social media is defined in Wikipedia.org as “an umbrella term that defines the various activities that integrate technology, social interaction, and the construction of words, pictures, videos and audio.”  Even if you haven’t invested the time to understand and market yourself on Social Media, your customers have.  Take a look at these stats:

  • 3 out of 4 Americans use Social Technology
  • 2/3 of the global Internet population visits social networks
  • Visiting social sites is now the 4th most popular online activity- ahead of personal email
  • Time spent on social networks is growing at 3x the overall Internet rate, accounting for 10% of all Internet time

Social Media is much more than a marketing channel, it can help you with:

  • Public relations
  • Customer Service
  • Loyalty-Building
  • Collaboration
  • Networking
  • Thought-Leadership
  • Customer Acquisition

If you haven’t defined your company’s Social Media Strategy, now is the time to do that.  There is a lot of help out there if needed.  For starters, go to http://www.youtube.com/watch?v=gza8dvN8Hkc to watch a short 3 minute video targeted to help businesses implement a successful social media marketing strategy.  Best of luck!

December 10, 2009

How to stay focused during the holiday season

Filed under: General — Tags: , — afp @ 1:02 pm

It’s that time of year again.  The holiday season is in full force around us.  One quick trip to the local mall or Wal-Mart validates it.  While holidays are a wonderful time of year that many of us enjoy as it means more time with our families and friends, it can also be the most stressful time of the year.  We are all very busy; we have jobs, kids, pets, friends, meetings, volunteer commitments and we try to hit the gym on a regular basis.  The holidays mean we also have to find time for shopping, parties, decorating and baking.  Not to mention the huge financial burden this can put on many families trying to buy gifts for all of their loved ones.  There are ways to help your organization enjoy the holiday season, while also making sure your business continue to meet the goals and results you have set.  Rather than avoiding the challenges or denying the distractions the season offers, embrace the season and apply some of the suggestions below.

Expect good results.
As a leader for your organization, one of your responsibilities is to set clear expectations and goals for others.  The goals for your business should be shared on a regular basis.  During the holidays, you may need additional reminders of what the goals are and what everyone’s duties are to hit those goals.  Keep people on track.  It is important to give people a sense of where they are on their annual goals and encourage them to finish the year strong.  Maybe you could even incorporate the holidays into a fun contest for the employees if they hit their goals or go above their goals, what I like to call a “stretch goal.”  Remember to give people the support and resources they need to succeed.

Share the holiday spirit.
While some people show their stress from the holidays and don’t have the best attitude, most people find their spirits lifted and feel generally happy during the holiday season.  Share that with your customers and with each other!  Encourage people to show their spirit, especially for those who are communicating directly with your customers.  Use that holiday good cheer and your customers will notice!

Celebrate!
You probably have a holiday party at a restaurant or hotel, which is great. But consider doing an on-site workday event too. There are many options -”Secret Santa”, a white elephant gift exchange, or an employee snack day are just three suggestions. A little time spent here can help bond teams and focus them on their work for the rest of the day. (Hint – let people who are interested in these kinds of events plan them – don’t delegate it to the unwilling or overworked because it won’t have the same results.)

Acknowledge the challenges and distractions.
We all need more time during the holidays.  Empathize with your employees on the stress of getting everything done and let them know that you deal with the same time issues that they do.  When people know you are in the same boat as them, you gain credibility when talking about expectations and year end goals.

Present positive anticipation for the New Year.
Give people something to look forward to. Get them excited about a target or project that will make a real difference early in the New Year. Giving people this forward focus will help the focus now, but will really help people once all of the excitement of the holidays are over and 2010 rolls in.

Engage outside your organization.
Take the lead by organizing a group to volunteer at a toy campaign, contribute to a food drive or donate money to an organization in your community.  Working together as a group on something important outside of the office will make your group feel proud of their efforts, proud that their organization supports volunteering in the community and improve the team relationship.  When your group bonds on a project like this, it can help increase the long-term impact on your team when working toward your organizational goals and helps increase productivity while back in the office.

I wish everyone a happy holiday season and here’s to hitting your goals and having a very successful 2009!

December 7, 2009

2010: The Return of the Tax Lease

Filed under: Leasing tips — Tags: , , , , , — afp @ 12:51 pm

Many business owners will find themselves in a strange tax position in 2010.  There was more interest in $1 out leases (non-tax or capital leases) in 2009 as business owners took advantage of the high tax advantages caused by Section 179 and the 50% depreciation provided by the government as part of the stimulus act of 2009. So if businesses make money in 2010 they will have reduced depreciation available to help lower their taxable income.  In 2010 with Section 179 guidelines being lowered and the 50% depreciation phasing out, the leasing industry will turn back to tax leasing to help business owners reduce their taxable income.  A tax lease (also called true lease or operating lease) is where the lessor retains ownership of the equipment for federal income tax purposes.  The lessor receives the rights to the tax benefits of ownership, including depreciation and any tax credits.  The lessee also receives a tax benefit by being allowed to claim the entire lease payment as a business expense, thus lowering the business’ taxable income.  At the end of the payment term, the lessee has three options:  1) purchase the equipment at the fair market value, 2) return the equipment, or 3) extend the lease and continue to rent the equipment.  For businesses whom will not show much taxable income in 2010, non-tax leasing will continue to be a good solution.  Make sure your leasing professional knows the differences and gives you all of your options based on your financial situation as you look to lease new or used equipment for your business in 2010.

For 2010, Section 179 will allow a business to expense up to $134,000 (down from $250,000 in 2009) of qualified property until it purchases over $530,000, above which allowable deduction is reduced dollar for dollar and totally phases out at $664,000.  Right now for 2011, the expensing limit goes back to $25,000 with an investment ceiling of $200,000.  Some experts believe the limitation will be raised to 2010 levels permanently in 2010 legislation, but as it stands now it is $25,000. 

Start doing your research now and talking with your lease professional and CPA about what lease type will be the best option for you in 2010.

December 2, 2009

Take a virtual tour of our new office!

Filed under: General — Tags: — afp @ 10:27 am

American Financial Partners (AFP) moved into its new larger corporate headquarters this summer.  AFP relocated to South Dakota to a beautiful location filled with a lot of historic character.  The offices are located within Buffalo Ridge Resort and Business Center.  The Buffalo Ridge Resort was once home to South Dakota’s first School for the Blind and Visually Impaired.  Today, while fully renovated, the property still retains much of its historical appeal, including a unique system of underground tunnels, originally used to allow the blind students to travel from one building to another in inclement weather.  To take a visual tour go to http://www.buffaloridgeresortsd.com/.  Gary, SD is home to other national corporations such as Viessman Trucking Inc (www.viessmantrucking.com) and Energy Maintenance Service, LLC (www.energyms.com).  AFP is all settled into our new headquarters and ready to help you with your finance and lease needs!

December 1, 2009

Equipment Finance Industry Monthly Confidence Index is on the rise!

Filed under: Uncategorized — Tags: , , , — afp @ 12:10 pm

The November Monthly Confidence Index for the Equipment Finance Industry was released by the Equipment Leasing & Finance Foundation.  The Index reported that confidence levels are on the rise as many companies are rushing to add new equipment to their businesses before year end.  The Section 179 tax deduction ends on December 31, 2009 so time is running out to get your equipment purchased and financed before the tax savings opportunities expire.  Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy or lease a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the US Government to encourage businesses to buy equipment and invest in themselves.  AFP is offering an additional $179 savings from your documentation fee if you lease your new or used equipment purchases with AFP in December.  Get started today!

AFP Talking Finance