Interview by Ralf Beiler
1. Tell me a bit about what you did before you started in the cash flow industry? What’s your background? How long had you been doing this? Why did you quit what you were doing?
My background has primarily been in sales. My career started at Coca-Cola Inc. I spent 5 years at Coke with an impressive record of growing my territory. I spent the next 20 years with PepsiCo Inc. with the Frito Lay division. I spent many years growing my territory there with an outstanding performance record. I also spent a 4 years in middle management with Frito Lay managing a sales force, also working on marketing and product placement.
2. And how did you get into the cash flow business?
My reason for leaving corporate was two fold, income was slowing and I wanted more control over my income and time. I had always had the entrepreneurial spirit and felt it was time to move on. After much research I came across the cash flow industry. Initially my interest was real estate investments, then the dot com bust and real estate went through the roof (which made property cost too expensive) and this led to my decision to venture in to the factoring industry.
3. What attracted you to this industry and type of work?
Probably the residual income and the fact that this is an ever growing industry attracted me to it.. Once I was involved I found this industry rewarding and very exciting. Once you get past the learning curve and have a few deals under your belt it just gets easier.
4. Describe to me how you started out. Walk me through the steps in detail. What went through your mind, and what did you do on day one, two, three etc. right when you started?
I started out by attending a seminar on the cash flow industry, which included, real estate, buying and flipping properties, buying and selling notes, and the factoring industry. It was a bit confusing in the beginning not being sure which direction to go. The more I learned about factoring the more enticing it became. After attending my second seminar I came home, it was December and I sat down and starting building my web site, it was very rough in the beginning just learning web sites, internet advertising etc. . My biggest problem starting out was marketing. The one thing they do not teach you in these seminars is the most efficient way to market your business. So, at this point without a true mentor and proper guidance I spent way too much money on advertising and other programs. When I started out I happened to have a good friend who was venturing out on his own also. He was a business coach and mentor, speaker and had a small software company. At this time we partnered up and went to every local networking event there was, handing out cards, talking to everyone we could. I never did get a deal from anyone in those networking groups through a 2 year period. This was disconcerting, of course I was still learning much, how to sell my services properly and just what my niche was and that was the problem, I was doing too much, I still had real estate notes, equip. Leasing, real estate, factoring all on my web site. Until I learned at a business networking group I belonged to that you need to narrow your niche, identify it and become the best you can at that, you can add more later, but you have to become the go to guy in whatever your industry is. So, I did just that, I focused on factoring only and as a result my focus started to turn in to dollars.
5. How long have you been working your cash flow business now?
I have now been in the industry for six years and only in the past few have I started to reach my goals. Like any business your building from the ground up, it does not happen overnight.
6. Are you doing this full-time or part-time now? And is this your only source of income?
I am now in the industry full time and this is my only source of income along with other services we offer. For my first 3 years I was doing this part time. To accomplish this I took a job with less pay but the hours I needed to start my business.
7. Without getting too personal here, how “happy” are you with the level of income you realize from this business? Is it below, at, or above your expectations? [Comment: Howard, feel free to share as many or as few details here as you want. Of course, new consultants always like to be reassured that it’s a great business where they can make a lot of money….but you may also want to put this into the “right” perspective]
Now I can say I’m truly happy with this business. I find it very rewarding financially and truly love the business. Of course in the beginning I was wondering if I would go broke before I had enough income to pay my bill’s and keep the business running. Finally I’m there and I am now helping new brokers not to make the mistakes I made. In order to be a continued success you must keep the pipeline full and know the business well. I would suggest to anyone getting in to this business to have a good mentor, its invaluable!
8. Some people tell me that it takes a lot of guts and that it’s a big step to go from a regular job with a regular paycheck to becoming an entrepreneur and being solely responsible for your own business and future. What is your view on this? How did you feel? How did you overcome the initial anxiety?
Oh yes, plenty of anxiety and stress in the first few months of going on my own and leaving the for sure weekly check. But the one thing I always had was the confidence that I would make it. I had friends and family asks me how are you hanging in there so long, go get a job. NOTE: The one thing every entrepreneur must do is stay away from negative people whether it be family or friends they will bring you down. What I did was not talk about my business when around family and friends that did not understand what and why I was doing what I was. I had a few months off and on when I wondered how I was going to get through it and many months my bills where behind. But that never deterred me, I loved what I was doing and the only reason I’m here now is from determination & perseverance & keeping a positive attitude.
Remember that a deal is not a deal until the money is in your hand. There will always be the ones that go sour at the 11th hour. At this point all of my business was through PPC advertising. I was doing good, getting deals in, closing about 70%, not too bad, but when you way it against the money you can put out on PPC ads I was breaking just above even. (You must understand PPC advertising is addictive) and I soon had all of my credit cards maxed out, not a fun situation. So of course we had to reign in the spending and find more productive ways of advertising.
9. Tell me a little bit about your business. How is your business organized and structured? What cash flow and client niche or niches do you focus on and why?
How is my business structured? Good one. In the beginning not much structure, I was still finding my way. Now I have a good idea of what and where I want to focus my efforts. I take all factoring deals, I’m not targeting just one industry because basically factoring is factoring. So we take on all factoring situations, manufacturing, staffing, trucking, wholesale, construction, import, export and purchase order funding. Medical is the one market that I find a bit tough and do not usually chase this business, I am now gradually working the medical in.
10. What do you enjoy most in this business? And why?
I most enjoy is talking the business to prospective clients, taking the time to help them feel secure in my ability and teaching clients how factoring works and the benefits. I always give my clients more than they ask for, no matter what you are selling the trick is to over deliver, if you can accomplish this you have them in your pocket. I also enjoy mentoring new people coming in to the industry. Its great when you are at the point where talking about factoring just rolls off the tongue and you can answer most if not all of your clients questions without calling a factor.
11. What do you like least? And why?
There is little if anything I do not like about the business. I do not like factor’s that do not work with brokers well. Probably the most annoying thing is PPC advertising cost.
12. Describe to me, if you would, what a typical working day in your life looks like right now from the time you get up in the morning until you call it a day. How many hours a day do you work your business?
My day starts out the night before. That is when I sit down and make notes for the coming day. My day starts by roughly 9 am . I go over my notes, make some phone calls, usually to clients and factors working to get a deal to completion. Sending e mails, receiving applications & documents to put a deal together. You might be working a deal and be back and forth with a client and factor many times a day, especially when a deal is just getting started. Hopefully during this time I’m getting calls and starting new deals., I love talking to new clients about the industry and seeing their growth with our help. One thing most people need to understand is for a broker the workload is light if your organized. The paperwork and time involved in one deal is not that time consuming for the brokers, it’s the factor doing the bulk, and we can only do our best to help with the info. Gathering. . With the spare time if I have any, and you will. I use that time to network and promote my business on the Internet. You must continuously market your business. Through the many Internet networking groups I’ve made many connections. If the phone is not ringing then you should be taking action and that’s what I do. Honestly the hours vary, but on avg. I work 6-7 hours a day. If I’m working longer hours then I’m happy, that means I’m busy.
13. How do you define success in this business and what do you attribute your personal success to? I mean what did or didn’t you do to become successful, and how long did it take you to see success since you first started?
Very simply for me its having the opportunity to do something I love and make money at it. I do love working this business, talking this business to anyone that will listen. Of course getting to the point where the bills are paid and you have extra money to play with. It feels good to be the go to guy even if the arena is small.
14. From your perspective, what would you say it takes in this business to be a successful cash flow consultant? What do you need to have / learn or do in order to “make it”?
First you need a dream and a positive attitude from there it is knowledge, you need to know the business and being able to convey that to prospective clients. This you do not learn from a book or training, you get it from doing deals. The more you do the more you learn the better you become. Most of your learning in this business is hands on. Take a look at people that are a success in the business and ask them how they did it, you can never have too many people to learn from. Take criticism constructively. Find a good factor that you can connect with, they can be a great mentor.
15. What do you personally see as the biggest challenges for a consultant?
The biggest challenge starting out is finding prospective clients. Advertising and marketing your business. If you have a small budget then you need to learn alternative methods like cold calling (something we all hate) , of course networking, locally and on the net. Ideally starting out with an advertising budget of 1k a month is great but seldom justified in the beginning, this is a tough number when your income is zero. It takes time to get your site indexed. But you must find a way to get on major search engines.
16. What does it take to overcome those challenges?
Perseverance! Be smart with your budget, most of all be realistic. This is the period when people will get filtered out. The persistent ones will get through this period but many will not. Many people expect instant results, this does not happen. You are building a business. The key word here is building. It takes one brick at a time, nothing happens overnight.
17. How does the current economy affect the factoring business? What sort of effects do you see in your business? Do you view the current economical situation rather as an opportunity or as an issue, and why? And what do you expect in the near and far future?
The current market conditions seem to point towards good times for the factoring industry. The downside is less retail spending which could result in less dollars factored per month and a lighter commission check. On the flip side the banks are pushing out commercial clients and are not risking new lines of credit. Where else is a business to go? Receivable financing is the only choice left. I see now and expect to see more applications coming in, so there should be a definite uptick for our industry.
18. Let’s talk a bit about something that many people – me included – consider being at the heart & soul of the cash flow consultant business: Marketing. What is your view on marketing in this line of business? How important is it? Why?
Marketing is everything. It should be your number one priority and focus. I think I’ve touched on it many times in this interview already that’s because I feel so strongly about it. What good is it to know everything about your industry if your phone does not ring. The person that does not use all of the tools that the Internet offers is not serious about truly building a business. The great part is most of these tools are free. If your in business and do not belong to Linkedin then you have a lot to learn about marketing. Marketing is the one thing I push more than anything in my mentoring.
This also includes local networking, writing articles, joining groups in your industry.
19. How have you marketed yourself, your services, and your company in the past (e.g. when starting out), and what do you do nowadays? Has anything changed? If so, what and why?
When I first entered the business besides local networking all of business came from PPC advertising and did quite well. I was only on Yahoo and Business.com, Google was too expensive. I do get a lot of free exposure on google from article writing and group discussions. But I’ve noticed changes in PPC advertising over the past few years and like always a mystery, ahh the internet. I now , because of the high cost of ppc am now doing more networking than ever and it can bring results. The other problem being that our industry is very competitive which makes the cost of keywords some of the highest out there.
20. Do you have a set marketing budget for each month or year? If so, why, and if not, how do you decide when and how much to spend on marketing?
You have to have a budget especially in this industry or can go broke advertising as I mentioned in the previous question. I believe 20% of your income should be advertising, of course much more starting out.
21. How much do you spend on marketing per month or per year, and what do you spend it on?
I now spend $1200 monthly and occasionally more when testing new advertising methods. Most of this is PPC advertising.
22. Which marketing methods do and don’t work for you, and why?
What works the best sorry to say is the most expensive, PPC. In our industry the internet is just about the only place to find us, you must be there.
23. One of my own principles in the marketing concept and classes I teach stipulates that it doesn’t matter so much WHAT you do, but rather HOW you do it. In other words, success is not so much based on deciding whether to use a direct mail or telephone or personal contact approach, or whatever, but rather on the “copy quality” within each, i.e., what you say or write or how you present it. What is your view on this?
Absolutely, You need a good approach and your verbiage in your presentation should be appealing, honest and ethical approach. Personal integrity is everything in this business.
24. Another question I get a lot from many consultants is: “What should I do, how and where do I find good prospects?” What would you say to them?
That’s going to depend on your budget. You can buy leads and list’s or in the beginning since you have more time you go to your free databases and there are many. Some of you forget your setting in front of your most precious asset, the Internet. If you want list’s then go to google and punch it in, if you want a lead company its there. You must explore. Again, I think we can all say that a very large portion of our business comes from search engines, you must be there.
25. Another thing that people hear me talking about a lot is my pledge for them to become as W.E.I.R.D. as possible when it comes to marketing. (WEIRD = well targeted, engaging, interesting, relevant, and differentiated). As we all know, one key element of any successful business and marketing is differentiation. Now, how have you managed to differentiate yourself, your services, and your company from the rest of the market? What is your USP (unique selling proposition) or UVP (unique value proposition) that has helped or enabled you to become so successful?
That’s fairly easy for me. The answer comes from my customers, I here more times then not that they called me back or chose to go with me because I gave them all the time they needed and answered their questions honestly and with patience. It’s hard in this industry to differentiate yourself but is something you should work on and as you grow you can improve upon. I do not have a fancy web site but it’s very informative, I think that helps also. I’m always trying to educate.
OK, let’s now also talk a little about the other side of the coin, i.e., when it comes to closing the loop for a successful deal: The selection of the right funding source. Generally speaking, what are your selection criteria when placing a prospect with a funding source? How do you decide which funding source to use for which (type of) prospect?
My choice for a funder starts in my initial meeting or call. While interviewing my client on first contact my mind is thinking where to send this deal, which factor will be the best fit for this particular situation. While this first discussion is going on I’m asking the questions I need to know, volume, type of business, how they get paid, what is their profit margin, any particulars about the way they get paid, terms with their customers etc. whether they are a start up or ongoing business.
26. What is important for you when it comes to deciding what funding sources you want to work with? What are you looking for in such a relation?
When I look for a funder they must know how to work with brokers as far as keeping us in the loop on any deal we are working, doing follow up with the client and most of all speed of moving the transaction along. I have taken deals away from factor’s that are not responsive to my request or move too slowly. They must be responsive when you’re in need of a conf. call or info. & due diligence. I worked with a factor for 2 years that was a great experience. We where like a tag team, I new how they worked and in turn they new how I worked. They where very responsive and quick to get to the conf. call and within a few hours we had a proposal out. If you have a signed proposal by day 3 with your client then we are going to close this deal. The Broker Factor relationship is of most importance.
27. One final question: What would be the one, two, or three most important pieces of advice that you can give new or less experienced consultants in order for them to succeed in this business?
Probably the first thing I would recommend is to have a good mentor, someone who can guide you through and past the mistakes that new brokers coming in will face.
The next is to market, market, and market. You can never do too much marketing. Its free.
Always give your clients more than they ask for, another words over deliver.
Have a dream, what great entrepreneur is not a dreamer.
Well, Howard, I think this pretty much wraps it up for now. Thank you so much for your time and for sharing these great insights with our readers. I’m sure that many of our readers will find themselves in similar situations and be confronted with very similar questions on their own path to a successful career. I would hope that learning from your views and experiences will be very useful and beneficial to them. It has been a great pleasure talking with you, Howard, and don’t be too surprised if you get many more questions from our readers by email or over the phone. And – of course – we’ll stay in touch as well.
