Debt Factoring

Fear Factor

What’s the biggest threat to your company? Competition? Regulation? Changing technology? Maybe you should put fear on your list. Fear is a small word that somehow touches our lives in a big way. Fear of danger is a survival mechanism. Fear of the change and the unknown is a destructive force that can consume workplaces and degrade the performance of our companies. As leaders, one of our most important jobs is to ensure that fear does not take root.


The way to diminish fear in the workplace is direct and clear communication. This is often more easily said than done however. Even leaders with the best intentions wind up sending mixed messages, what experts in organizational behavior call meta messages. How so? The way in which you couch the message itself—the words you use, your manner of speaking—communicates additional, sometimes conflicting information. Whom you communicate with sends another message—and whom you exclude sends still another.


For example, Jane became VP of a small consulting team after a merger. She was well respected for her leadership and determined to make the integration as smooth as possible. She assured team members that she would meet with them and keep everyone in the loop. Soon, however, Jane was being pulled into meetings with her new boss, leaving her direct reports without a leader. She was also traveling more. She sent emails, assuring everyone that all was well and promising to get back to them later.


Jane thought she was being a good leader. She was absorbed by what she felt was the most important priority – getting the story of the new merger clear with her boss. But the mixed message of assurances to her direct reports and her unavailability proved destructive.


Within a short time, her team was disconnected from the acquisition activities. They started to talk to people throughout the company, and got more mixed messages about what was going on. Within a few months, rumors of worst-case scenarios (bad acquisition; culture conflicts) began to circulate.


As fear took hold, employees:


– Began to distrust Jane’s leadership capability

– Turned to other leaders outside her team for advice and information

– Created concentric circles of communication (gossiped), building mountains out of molehills


As a further consequence:


– Performance in the team went down

– Jane felt disappointed

– Jane grew angry with team members whom she perceived as no longer committed to their jobs

– What Jane overlooked is that our sense of security and well-being is profoundly affected by how much we are kept in the loop; in the absence of clear, consistent and regular communication from the leader, fear takes over.


Employee fear takes hold when people in positions of authority are suddenly behind closed doors, speaking in hushed tones, refusing to address rumors directly and so on.


Ironically, this attempt to avoid communication conveys a very clear message: Something is brewing that is so bad that the boss is afraid to talk about it.


That, surely, is not what the boss intended. Indeed, Jane was doing everything she could to make sure her team, her direct reports, would continue to have a key role and that the lives of her employees would not be disrupted.


The lesson: A great leader is able to put herself in someone else’s shoes—to see how certain actions (or a lack of actions) look from the employee’s point of view. We call this empathy. In being empathic, the leader creates a sense of calmness and control that sustains a sense of forward movement, security and direction. Unless the leader sets a clear and explicit context for this type of communication and communicates often, employees are left with little choice but to create their own “worst case scenarios.”


What elevates Fear?


– Lack of shared focus, purpose and vision. This creates confusion

– Lack of company-wide communication, which opens the door to paranoia (the ultimate fear response).

– Lack of interpersonal communication causes a negative emotional response on the part of the individual. If you can’t speak directly to every worker, make sure a supervisor does. Business leaders make a mistake when they don’t take into account the emotions of their staffs. Positive emotional connection isn’t just something that feels good, it is good for business. Negative emotional response is destructive.

– Lack of respect for others within the organization. That undermines security, causing resentment–another form of fear.

– Failure to develop team agreements, strategies and decision-making policies. This increases isolation and leads to fear.

– Negativity and complaining, which become both the cause and effect of fear


TIPS FOR LEADERS:


When having vital conversations about the future and the organization’s direction, make sure you are listening. Repeat what employees say and ask questions. Listen to the logic and the emotion (pay attention to their mixed messages!).


Pay attention to the subtext—what is implied by the questions.


Become an expert at clarifying what employees are saying before drawing conclusions and making assumptions that may be erroneous. Keep asking questions until you get to the real message that the employee is trying to convey.


Keep an open mind. Even if you disagree with what is being said, your listening shows the employee respect and helps you understand employee concerns. Remember emotions don’t always reside in logic. Fear is an emotional response that you can avoid.


Evaluate information without bias


Respond rather than react. Show the employee that his or her concerns are valid.


Accept responsibility for the impact of the way you are communicating with others


WALK the TALK. Say what you mean and MEAN what you say. That will build trust and eliminate fear.


Understand how unspoken fear can affect your business and deal with it by unraveling meta messages. It will have an immediate bottom line payoff.


Employees who know where they stand can accept whatever reality the ups and downs of business bring to your company—and they can be OK with that.


Judith E. Glaser, CEO of Benchmark Communications, Inc. and author of Creating WE: Change I-Thinking to We-Thinking & Build a Healthy Thriving Organization; Platinum Press, 2005. Selected as one of the best business books of 2005. www.creatingwe.com; and The DNA of Leadership, February 2006; 212-307-4386.


Nancy Snell, CEC, is a certified professional business coach with a broadcasting career that spanned 25+ years. She specializes in workplace issues and coaches professionals who are ready to get unblocked, unfrustrated and on track. Nancy served as a Director on the Board of the NYC – ICF in 2005. www.nancysnell.com 212-517-6488

How To Obtain The Best Receivable Financing In Canada And Why Factoring Receivables Works Best When

Your mission, should you choose to accept it? It’s finding a financing receivable strategy that works, is cost efficient, and allows you to mind your own business when it comes to this popular method of Canadian business financing!

Factoring receivables gains daily momentum in Canada – If you feel either confused, mis informed, or just generally out of sync with how this type of financing works and what it costs lets get you up to speed.

It’s actually not as complicated as you thing – on a daily, week, or monthly basis, (it’s your call) you provide your invoices and proof of delivery and shipment . And then here’s the good news, you receive cash, the same day, for those funds. Actually, to clarify, the amount of the advance on your invoices is actually 90% – you receive the rest of the funds, i.e. the ten per cent, when your customer pays – less the financing charge.

And we know from experience that clients want to always know and talk about that financing charge, so let’s clarify that point right away. First of all did you know that some of the largest corporations in Canada utilize this method of financing receivable portfolios? Their cost is often either the same as traditional bank financing, and in some cases less.

However the majority of business in Canada that seek out factoring receivables actually pay anywhere from 1 – 2.5% per month for the cost of factoring. But let’s be clear here, receiving those funds when you invoice allows you to maintain a totally positive cash flow, and at the same time continue to grow sales and profits. We also point out to clients that they are now in the enviable position of taking 2% discounts on all their qualified purchases with their suppliers, and, if they are really smart, can negotiate better terms and pricing from their suppliers on product.

We referenced the term C I D when it came to our favorite, and recommended financing receivable solution. So what exactly is C I D? It’s a unique form of factoring, that by the way, costs the same as other types of factoring receivables financing. However, unlike traditional A/R financing it allows you to bill and collect your own receivables on a confidential basis. Your suppliers, clients, etc are simply not aware of how you are financing your company, and we think that’s important. C I D is the acronym we provide for Confidential Invoice Discounting. So again, to clarify, you are financing your business on a confidential basis – your competitors who use this type of financing are not. That’s your key advantage, and we think it’s significant.

Selecting a receivables financing partner can be a challenge – simply because there’s hundreds of small and larger firms out there with difference criteria. You have to be able to distinguish between recourse and non recourse factoring, and if the firm even offers (or has heard about!) C I D financing. Other factors (pardon the pun) to consider are the size of your portfolio, misc fees that add up quite frankly, and must be understood or negotiated. And pricing is reflected to a certain degree by the size of your monthly receivable financing. A/R portfolios of 250k per month generally receive better pricing and structures.

Interested? Confused? Hopefully not the latter, but if you are seek out a trusted, credible and experienced Canadian business financing advisor who will steer you through the financing receivable maze – we’re sure you’ll come out the other side well informed and with a factor facility that works best.

Stan Prokop is founder 7 Park Avenue Financial ; Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:
http://www.7parkavenuefinancial.com/factoring_receivables_financing_receivable.html

The Only Disadvantage Of Factoring Receivables And Why Confidential Accounts Receivable Finance Work

Looking for a creative, ‘outside the box’ Canadian business financing solution? You may have investigated factoring receivables already but either didn’t understand how accounts receivable financing works, or, probably more to the point weren’t comfortable with how it works for your firm on a daily basis.

We’ve got the perfect solution for those worries, and its called confidential receivable financing, in Europe its more commonly known as C I D, confidential invoice discounting .

Let’s examine why this type of business financing works in general, and then let’s focus in on why our solution makes a solid solution even better.

In general terms when you ‘factor ‘ your receivables you essentially sell them to the factoring firm. That can be done on a one of basis, on a periodic basis, or all the time. That’s one of the key advantages of this type of financing, you only use what you need, and… More importantly, you only pay for what you use!

Paying for what you use in accounts receivable financing is key because factoring, in general terms can be a more expensive type of financing. We say ‘ can be ‘ because quite frankly if you use it properly it actually could be a cheaper method of financing than your bank. That’s a point our clients are always amazed at when we discuss this type of Canadian business financing.

The cost of factoring receivables can be significantly offset, or in some cases removed completely by your firm using these funds to take supplier discounts and purchase more efficiently and at better prices .

And… Think about this carefully, if you can finance your receivable the days you issue the invoice (that’s what factoring does) then you are in a position to generate funds to sell more products and services to your customers, generating additional margins and profits. Or, of course, you could take the non factoring approach and wait for your customers to pay you in 30, 60, or… dare we say it, 90 days. And that hasn’t worked for you in the past, which is why you are looking for a better solution.

So lets examine how factoring works, and lets get you over the hump, so to speak, on why our preferred type of accounts receivable financing is confidential invoice discounting .

When you generate an invoice under a factoring receivables agreement you receive 90% of the invoice in the form of immediate funds the same day. The other 10% is a holdback, and is remitted back to you promptly when you customer pays, less the financing charges, which are typically 1.5 – 2% for a 30 day period.

In 99% of traditional factoring arrangements the factor company verifies your invoice with your customer and actually collects it. Under confidential invoice discounting you bill and collect your own receivables, and are in a position to finance your firm without your customers and suppliers having anything to do with how you finance your business.

Speak to a trusted, credible and experienced Canadian business financing advisor on why confidential accounts receivable financing will work for your firm, allowing you to supercharge that cash flow and those profits!

Stan Prokop is founder 7 Park Avenue Financial ; Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:
http://www.parkavenuefinancial.com/factoring_receivables_accounts_receivable_finance.html

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