Crowdfunding: The Answer to Funding a Small Business?

Money is always a concern when building your business or when you’re looking to keep it in the black. Crowdfunding is defined as the “practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” But is it the answer to helping your small business?

For a select few, it could be.  Rather than having to look to banks or private investors to get the capital needed to support your company, crowdfunding opens up your capital-seeking channels to include everyone and anyone. With President Obama’s Jumpstart Our Business Startup Act, (JOBS), it will be easier for startup businesses to go this route to raise funds than to attempt to jump through many hoops to get that funding. The bill basically states that business startups looking to grow can turn to online investors to gain the needed money to succeed.

Websites like Kickstarter, RocketHub, and Indiegogo let companies showcase their businesses to a wide audience and provide a crowdfunding platform where anyone can safely invite others to donate to their business or donate money. Each site gives businesses or project designers a place to create a profile consisting of relevant information about the project or business venture as well as establish a fixed financial goal of what they are hoping to raise within a set number of days. Rather than the customary investors most businesses seek out to obtain funds, crowdfunding is exactly what it sounds like – funding by the crowd, or general public. Backers who donate money can pledge a minimum sum to the fund and may receive a reward for their involvement.

However, not all companies who seek out money via crowdfunding actually receive the capital they’re hoping for, and in fact, the majority don’t. “The assumption is that everyone gets funded, but nothing can be further from the truth,” says Chance Barnett, CEO of Crowdfunder, a social networking site for investors and companies trying to raise money. “A majority (of companies seeking funding) aren’t companies that are deserving of capital today.”

The JOBS Act says that non-accredited investors can invest in a business and that same business can then raise up to $1 million a year without being obligated to register with the Securities and Exchange Commission (SEC). Since the JOBS Act has passed, websites devoted to helping companies connect with individuals looking to donate money to their crowdfunding efforts have seen their numbers rise to an all-time high.

Health Care Reform Will Lead to Stricter Workplace Wellness Programs and Harsher Penalties

The Obama administration recently announced the final rules on employee wellness programs under the Affordable Care Act (ACA). The U.S. Department of Health and Human Services issued the regulations, which were enacted under the ACA on May 29. The program allows employers to increase the incentives they give workers to get them into a wellness program or other means of promoting healthier choices and behavior. It supports workplace health encouragement and deterrence as a way to decrease chronic sickness, better health, and regulate growth of health care costs while making sure workers are safe from unfair underwriting methods that could lessen benefits based on health status.

Employers also get clarity on applying penalties for unhealthy employees. Under the new regulations, employers have greater flexibility to charge higher premiums to workers who do not meet certain health goals.

According to a recent survey by the Midwest Business Group on Health, more than 80% of the country’s biggest employers are looking to implement a penalty and reward system to encourage their workers to get healthy.

The rules support “participatory wellness programs,” which are typically accessible no matter the individual’s health status. Included are programs that compensate employees for the cost of membership to a gym or fitness center, rewards for those who attend a free monthly health education meeting or who undergo a health risk assessment.

The final rules protect users by demanding that health-contingent wellness programs be logically planned, equally available to all similarly situated people, and that they accommodate suggestions made at any time by an individual’s doctor founded on medical appropriateness.

Due partially to the ACA, 82% of almost 100 global and national businesses are lowering premiums and offering gift cards for healthy living or charging higher co-payments and fees for poor health choices like smoking. The final rules will go into effect starting on or after Jan. 1, 2014

Read the official news release from the U.S. Department of Health & Human Services here: http://www.hhs.gov/news/press/2013pres/05/20130529a.html

How to Manage Medical Transcription Overflow

Sometimes when the work starts to pile up, it makes sense to hand it off to someone else. Overflow is common in the medical transcription industry and outsourcing transcription work can play a big part in reducing turnaround times, eliminating errors and helping to minimize stress on medical transcriptionists.

A recent article from For The Record magazine seems to believe otherwise. It discusses a variety of ways that medical transcription companies can manage the extra work in-house instead of using outsourcing. What does this outlook mean for the medical transcription industry?

Read it for yourself and see what you think.

Why Small Businesses Struggle to Obtain Credit

If you are a small business owner and having trouble getting credit from a bank for your business, you’re not alone. A new study by the National Federation of Independent Business (NFIB) shows that only 1/3 of small business owners are actually able to receive the credit their companies need.
One reason your corporation may not have been able to get a loan or line of credit is the size. The smaller your business, the less likely it is to be able to receive the financial support it needs from the bank. The NFIB survey revealed that of businesses with 50 to 250 workers, over 50% have a business loan while roughly 65% have a line of credit, compared to the almost 16% of businesses with one or fewer employees that have a loan or the roughly 34% that have a line of credit.
Lending to small businesses is riskier and more expensive for banks than letting bigger companies borrow money because the default risk is higher for small businesses as their failure rates are greater than big corporations’ rates. This is because changes in the business world and market have a bigger impact on the smaller companies than the larger corporations. Banks also assess loans to smaller businesses as unworthy endeavors because they are more expensive. Big companies looking for a business loan are usually looking to borrow a large sum of money and profit margins on larger loans are higher than they are on smaller loans, which is typically what a small business is looking to obtain. This leads to banks focusing more on bigger customers and corporations and being more willing to lend to them.
However, there are some steps you can take to make your small business more appealable to banks and increase your chance to receive a loan or line of credit.
1. Research Banks: Knowing which banks specialize in business loans and in what industry lets you target banks more likely to give your small business a loan.

2. Network: Building good relationships with your accountant and other advisors establishes a group of people you can look to for advice and introductions. Using a local bank in the community will also let you connect with the important decision makers at that bank and develop a relationship with them.

3. Get Your Finances in Order: Organizing your financial documentation will make your loan application process much easier and smoother. Understanding your credit report and being mindful of your credit score will also ensure there are no surprises when the bank considers your application.

4. Have a Plan: Knowing what you will do with the money if you receive the loan, having cash flow projections based on the impact of this money, showing how the loan will increase your company’s growth, and providing a contingency plan in case the loan doesn’t do what you initially planned it to in your company all will show the bank responsibility and can only help your chances of obtaining a loan or line of credit.
Are you struggling to obtain a bank loan for your small business? Don’t worry – there are options!  Invoice factoring is a smart funding solution for small businesses. Whether you are a small business that works in the medical industry, or virtually any industry, as long as you have unpaid invoices – you can improve your cash flow today by factoring receivables. Rates are low and there is no debt added to your balance sheet. Not to mention, bad credit or past financial problems are okay. Approval is based on the credit of your customers – not your company. We have connections with a nationwide network of business factors who can get your small business the cash you need. Contact us to learn more.

Business Cash Flow Crunch? 5 Small Business Cost-Cutting Solutions

Cash flow can be a big problem for a small business. Here are some tips on how to minimize costs for your small business while maximizing efficiency and making the most of your money.

1. Utilize Combined Purchasing Power
By reaching out to other small businesses and joining together to buy supplies, your collective purchasing power is more desirable to suppliers. Going to the suppliers as a cohesive unit and stating the businesses’ intentions of buying from the vendor who offers their goods at the best price, will make the group more likely to get a more competitive rate for the supplies, especially if the consortium signs an exclusive agreement with the vendor for a longer length of time. Getting supplies this way may also make it easier to ask for a discount and save your business even more cash.

2. Embrace the Idea of Interns
When a business looks to temp agencies for a person to complete more mundane tasks or help out at a company, they miss out on the beauty of offering an internship. There are numerous college students looking for opportunities and experience, many of whom will work for low wages or use an internship to earn college credit. Interns can be trained to contribute more to the business or be delegated undertakings such as filing, stuffing envelopes, or doing supply inventory. Many in this college-age workforce are also adept with technology and could help with your company’s website or social media reach, as well.

3. Go Green
Nearly half of office paper is thrown out within 24 hours of being printed. The amount of money spent on ink, paper, and professional printing could be better used within your company if you adopt a paperless workplace. Using electronic file storage and free online spaces like Google Docs or DropBox eliminates the need for hard copies of documents floating around the office and will save your company hundreds of dollars as your small business cuts back on printing and ink costs. Using laptops instead of desktop computers can also save you money as laptops use significantly less energy than a typical desktop PC. Additionally, buying appliances that are energy-efficient is also a great way to go green. While you may shell out more for the merchandise up front, in the long run, a more energy efficient product will save you money.

4. Reconsider Your Office Space
While paying rent is inevitable, subletting office space or moving your office to an industrial area rather than maintaining an office in commercial space can cut down your company’s costs. Considering establishing your business as a virtual presence is a viable option too; your employees can then work from home and you eliminate the need for office space entirely. If this isn’t a possibility for your business, try renegotiating with your landlord – with a low demand for office space, your landlord may be more accommodating with the rent to keep you as a tenant.

5. Pump Up Your Advertising
Getting the word out about your business and attracting new clients and customers can be expensive but focusing your marketing and advertising efforts online can save you money and have a far reach. Connecting with potential consumers in online forums and message boards or starting a blog lets your business advertise and publicize itself for free. Another possibility for free advertising is to reach out to clients and ask them to write a testimonial on your business’s website or tell their friends about your company – word of mouth can go a long way and serves as free PR for your corporation.

If slow paying customers or unexpected growth create cash flow challenges for your business despite your best cost cutting efforts, invoice factoring is the solution. PRN Funding partners with a wide network of experienced business factors who work with nearly all industries including staffing, transportation, construction, manufacturing, telecommunications and more. We can help get your company funded today!

Employers Cut Back on Generous Health Plans

According to a recent New York Times article, companies that offer high-end health plans are scaling back benefits to employees. This is because of a so-called Cadillac tax, which penalizes companies that offer these sorts of plans. The purpose of the tax is to discourage employers from plans that shield employees from the high costs of healthcare and can lead to excessive and unnecessary medical procedures. The tax is highly controversial, but intended for employers to consider long-term healthcare cost control.

Companies that are scaling back their health plans are going to be looking to control their business costs in other ways as well. One way to do that is through invoice factoring, which is the sale of unpaid invoices for cash advances. Proper cash flow is a step in the right direction for companies struggling to meet healthcare reform requirements, and could be a blessing amidst the current uncertainty.

The Myths about Obamacare and Small Business

The opposition to the Patient Protection and Affordable Care Act (PPACA) often falls back on the argument that says health care reform will hurt small businesses. However, according to a CNN Money article, new research indicates that this argument is overblown and only a tiny fraction of businesses will be affected by the 2014 provisions.

Out of 5.9 million small businesses, defined as businesses below 500 employees, 97% have below fifty full-time employees; therefore, healthcare reform only affects 3% of small business, or 200,000 companies. Out of those 200,000 companies, 97% already offer insurance. Although detractors claim that their insurance policies could still be penalized, new research from the University of Chicago says that more than 99% of the existing insurance policies will be acceptable under the PPACA.

All told, that leaves a tiny fraction of small businesses that will have to change their policies under health care reform. So while it may be tricky for these few companies, to say that Obamacare will harm small business is a stretch.

New Bill Enables RNs to Determine Hospital Staffing

In a medical setting, those actually caring for patients arguably have the best understanding of how much staff is needed to do it properly. In light of this, a new bill has been introduced to Congress that would allow registered nurses to have a larger role in hospital staffing levels.

Staffing Levels Outcomes

The Registered Nursing Safe Staffing Act of 2013 (H.R. 1821) is a bipartisan bill sponsored by the co-chairs of the House Nursing Caucus. It has the backing of the American Nurses Association (ANA), who claim that higher staffing levels are directly linked to better patient care. Research shows that appropriate staff levels lead to lower rates of patient falls, infections, medical errors, injuries, and death. When negative events occur at a hospital, low staffing rates are usually a contributing factor.

What the Bill Entails

The safe staffing bill would require that hospitals establish committees to create unit-by-unit staffing plans. Their plans would take into account several inputs, including number of patients per unit, experience of the floor nurses, and technological capabilities. It would also require that hospitals that participate in Medicare would have to publically report the nurse staffing plans for each unit, provide whistleblower protection for those who complain about staffing, and place limits on the practice of “floating” nurses.

Implications

If the bill passes and nurses have more say in staffing levels, we might see high demand for more nurses to fill positions. Temporary nurses might become more needed, and therefore staffing companies will also see an uptick in demand for their services. Factors will be busy funding these institutions so that they can grow their operations. Hopefully the ultimate end result of this legislation will be better patient care at hospitals—then everybody wins.

Nursing Aide Staffing Shortages- Are Occupational Injuries to Blame?

As we pointed out in our last post, skilled care facilities are facing a growing shortage of nursing aides. A number of factors contribute to the high turnover rates, but chief among them may be the high rates of injury among the aides.

Nursing aides have a very physical job, and must work long shifts on their feet and lift willing and unwilling patients regularly. Nursing aides say that they are often required to look after more patients than they can safely handle—on average, one aide for every ten patients. A telling statistic is that nursing aides suffer more occupational injuries than construction or factory workers.

The high number of injuries leads to a high turnover rate—between 34-75% of nursing aides turn over every year. This is costing the industry much, about $6.3 billion a year, in terms of hiring and training new workers, and experts say the costs could be reduced if better working conditions were implemented.

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