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April 26, 2009
What Is a Credit Score That It Discriminates Based on Your Nationality?
If you're an ex-pat American running a profitable business in the UK don't be surprised that your nationality will affect your business’s credit score. To find out why continue reading this article.
First, let's answer the question what is a credit score and the credit ratings process.
A credit rating or credit score is a measure of the financial risk of a business to providers of finance and credit and the probability of the business defaulting on loan finance. Credit rating agencies take the following main factors into accounts to arrive at the credit rating or credit score for a business:
. The transactional history of the business
. The promptness of the business in meeting payments to suppliers, repaying loans and other financial obligations
. The structure of the company's debt: whether loans are secured (on business assets or assets of the owners of the business) or unsecured, the amount of debt the business is carrying and the repayment profile or history;
. Cash flow, working capital and the net worth of the business;
. The size of the business (number of employees, profit and loss plus balance sheet values including the background of the directors or owners of the business.
To calculate credit score ratings, a UK credit rating agency will enter the data, based on the above factors, into a credit scoring model to produce a credit score or rating.
Former Wall Street banker Alexander Kelly who heads Powerchex, a profitable employment screening start-up business in the UK, has accused Creditsafe UK, a credit rating agency, of unfairly penalising her young business by using her nationality in giving her business a lower than expected credit rating. Kelly claims that Creditsafe UK was unjustified as her business has being doing well in the downturn and it is rated highly by other business information suppliers.
Creditsafe UK told Alexander Kelly that neither she nor her fellow director was of UK origin and this was among the factors affecting her company's rating. Other factors mentioned were the small number of directors (Powerchex has two), that the company is not part of a group and that it is trading in an area with higher than average number of insolvencies among companies of similar size.
Kelly said: "I think this is discriminatory and disadvantages companies by using criteria that have nothing to do with financial performance or, viability of the company". Kelly also notes that the business is ranked in the top 20 per cent of companies by Dun & Bradstreet, the US based rating agency, and Creditsafe UK did not cut the ratings of her competitors that have worse balance sheets.
So, the crux of the matter is that credit rating agencies use different models in calculating credit scores and whether in recession or good times, it's important for a small business to protect its credit rating irrespective of the different models being used to calculate credit ratings. It's a good idea to get testimonials from providers of finance and suppliers to reinforce the credit worthiness and good management of your business.
David
Small Business Resource
Posted by David at 5:02 PM | Comments (0)
April 24, 2009
How to Dramatically Increase Your Ability To Sell More In The Deepest Recession And Boost Sales Even If You Are A Born Skeptic
Are you exploiting the principles of influence and the 30 Psychological Triggers to leverage more leads, supercharge sales and to catapult you cash flow?
It's a fact, the Internet and the world at large has become saturated with information. As a result, people don't have the time or willingness to stop and filter information to make decisions. All of the various decisions are made in an overloaded day.
People need shortcuts and this presents opportunities for clued up marketers and entrepreneurs. As a small business owner, this is where you can adopt the principles of influence to gain assent by prospects. That's not all...
By combining the five principles of influence (by Dr. Robert Cialdini in his book “Influence - The Psychology of Persuasion”) with thirty psychological triggers (per Joseph Sugarman in his book "Triggers") small businesses can generate more leads and convert more prospects into customers. This will in turn, generate more sales, profits and cash flow.
Naturally naysayers among the crowd of small business owners will doubt the power to control the mind of prospects to motivate and persuade. However, before rejecting the science it would be wise to study the principles because there's plenty of scientific evidence that supports the power of using psychology to influence behavior. Review the results of empirically conducted and rigorously controlled research into the science of compliance.
Tell those companies that have seen dramatic a increase in sales conversion using psychological triggers and the five principles of influence that they don't work.
The truth is when you integrate psychological triggers and influence principles in your advertising and marketing messages you too will see an increase in leads generation and sales conversion. This may come as a surprise to many...
Watch this short video of Dr. Robert Cialdini:
The principles of influence and psychological triggers are being used by governments and non political organisations to influence people’s behavior and decisions in environmental, social and political and similar causes. That's right!
So what are the five principles of influence?
Dr. Robert Cialdini describes them as:
Reciprocity
Scarcity
Authority
Commitment & Consistency
Consensus & Liking
Without going into to much detail I'll just comment of the first two principles:
Reciprocity is described as: prospects are more likely to take action if it is in return for a previous gift, favor, service or concession that they have received. Put another way, people say yes to those they owe.
Scarcity: people are more likely to seize an opportunity to the extent that it is scarce, rare or dwindling in availability.
You can learn about the five powers of influence in Dr. Robert Cialdini's book. You can get the 30 psychological Triggers or sales tools described in Joseph Sugarman's book "Triggers" and how to integrate them into your marketing and sales messages by clicking here and saving the PDF file to your computer.
Finally, as many small businesses cut back on overheads, bear in mind that this recession will come to and end. History shows that companies that did not cut back on marketing and advertising were better positioned to benefit during recovery compared to their competitors.
If you are not integrating the principles of influence and ethically using psychological triggers in your sales letters, classified ads, pay per click ads, press releases, articles and other sales messages then sadly, you are leaving plenty of cash on the table. That's not all...
These advertising techniques when incorporated into your small business advertising messages can boost profit made from lower cost per customer acquisition from internet marketing campaigns.
David Davis
CEO Small Business Resource
Posted by David at 12:36 PM | Comments (0)
