Posts Tagged ‘Business’

Is YOUR Business selling to RETAIL?

April 24, 2017

It wasn’t that many years ago when a manufacturer didn’t really worry about Accounts Receivable (A/R’s) if one sold or supplied to a BIG NAME firm, e.g. General Motors (GM), Chrysler, Delphi, Kodak, Blockbuster, Schwinn Bicycle, Marvel Entertainment, Hugo Boss, Reader’s Digest, Trump Hotels, Sears, Radio Shack, etc., because they always paid you and you really didn’t worry the same as the neighborhood “Mom & Pop” operation, right? Even if you gave 30 or 60 day terms and didn’t get paid for 90 days, it just meant you waited but why would you really need worry.

Unfortunately, today’s world has changed substantially and auto makers like GM had to restructure with governments bailing them out, Radio Shack went under and Sears recently said there was “substantial doubt” as to their long-term operating ability. WOW! Many of the names listed above have all had to restructure and that meant unsecured vendors were not very happy.

So how do YOU manage your business to ensure that you will be paid and remain afloat? I have met so many companies, through the years, that would often have 80% of their sales from a small number of customers and I would always recommend prudent Risk Management – “don’t put all your eggs in 1 basket” – and suggest they consider diversifying their markets and considering options for transfer of their risk, e.g. trade credit insurance. Some clients neglected to follow any or much of my advice and I do know of several who are no longer in business.

Trade credit insurance is often used by firms in Europe but not so often in North America. Why? Europeans may have been less reliant on one’s reputation, perhaps, but my own banking background tells me that North American banks don’t suggest the option, don’t know enough about it and don’t vary credit terms adequately to encourage YOU obtain this. I also hear that terms are much more favorable in European banks for those companies who do purchase the option so many of you don’t feel the savings warrant the added expense.

Where I do find many Canadian (can’t say the same is more or less frequent in the US) companies using Trade Credit Insurance is in their Export Financing but why only for those types of deals? Perhaps you Factor your A/R’s but I just read “Wells Fargo & Co. is among the firms no longer providing Sears vendors with factoring — short-term financing that helps gives them a cushion.” Imagine then what I seem to hear more often than not – insurance works when you really don’t need it but often doesn’t respond when you truly have the need. Do you feel that way or have you heard this said?

This is why I continue to preach Risk Management and supplementing with a suitable Risk Transfer mechanism (insurance should not be solely price-driven when purchasing but knowing what is and is NOT covered and buying the policy from a reputable agency/brokerage with adequate Errors & Omissions insurance of their own and a suitably rated (I tend to like AM Best A-ratings or better) underwriter for your General Liability, Trade Credit, Cyber, Crime, Specialty and Directors’ & Officers’ Liability policies.

I do hope you realize that insurance buying may be 1 of the most important business decisions you make each year but I do know that you overlook this importance because of the trust you place in your providers and the lack of understanding of what is really behind an insurance contract.


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Info derived from and other online material.


November 11, 2013

Sometimes, I find that taking a little time away from being online – no, I don’t forget to take a laptop with me but just ensure that I’m offline – offers me a great deal of opportunity to reflect.

This past weekend, for example, allowed time to travel by car, visit some friends and family and enjoy more than a glass of wine with a wonderful Portuguese dinner of codfish (no, it was not all that I ate but I don’t wish to be the cause for your extensive salivating while reading this).  I had a coffee at Starbucks where I met with one of my many online friends who offered a very intriguing business opportunity which I feel can be of mutual benefit to both our businesses, and, last but not least, time to write a few blogs for posting in the coming week.  It was a mixture of both business and pleasure but time to re-create for the next work week, perhaps longer.  Yes, a productive weekend in many ways, don’t you think?

Is not the word “recreation” supposed to mean that – re-create – anyway?  Well, I always take lots of reading material with me – some of it is material that may not be “current” news but is kept for just this purpose, to reflect on life and what is taking place around us.  Often, I find something that jogs my memory and helps me to prepare another blog or idea for the simple reason that I never tire of writing, speaking, sharing thoughts with others.  And, sometimes, it is just because I may be early for a meeting or appointment and prefer to occupy my time productively while waiting.

This blog is not to be about business in a direct manner today but more about how we all need time to reflect on life – as someone mentioned to me many years ago, “stop and smell the roses”.  Life and business can be quite depressing – the super typhoon to hit the Philippines is just an example of that – and yet, we all see so much beauty around us, if we only look for it.  My friend from the Starbucks meeting was just showing me some of that beauty – he is a terrific amateur photographer, by the way – where we discussed sports, geography, politics (and we do have some opposite views here), culture and business.  Life is not just about happiness and peacefulness and surely should not be the opposite or we will never appreciate what we have in it.  We do see both good and bad and need to value what we have and appreciate it.  That is the entire purpose, in my mind, of recreation and reflection.

Have a great week, everyone!