Lending Club

Limiting Affiliate Marketing Offers

Mike Smith — Wed, 27 Aug 2008 15:52:32 +0000

You can opt out of receiving most unsolicited credit card applications, insurance offers, and similar junk mailings by using the opt-out procedure I’ve previously covered. One limitation of that program is that you may still receive offers from companies that you do business with and their affiliates.

Help in that realm has been in the works for nearly a year now. Effective January 1st of this year, a rule imposed by the federal financial regulatory agencies changes how companies can use information received from their affiliates. You may start to hear more about this rule in the coming weeks because although the rule has been in effect since the beginning of the year, mandatory compliance with the rule isn’t required until October 1st.

Affiliate companies are those owned by the same parent company. So if your bank is owned by a company that also offers credit cards, brokerage services, insurance, or other services through other companies it owns, those other companies could send you unsolicited mail. Under the new rule, companies would have to notify you before they could use your personal information that they received from one of their affiliated companies.

The company that you have a relationship with will also have to provide you with the opportunity to opt-out of having your information shared with affiliated companies. Monitor your mail closely and be on the lookout for this disclosure, which is typically titled “Federally Required Affiliate Marketing Notice.” Within that notice should be instructions for how to opt-out. The letter from my bank had a phone number to call. The procedure was very quick and will be in effect for five years. Before the limitation expires, companies will be required to send out renewal notices. Don’t miss this opportunity to further reduce the junk mail you receive.

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7 Teeth-Gnashing Mistakes I Made as an Entrepreneur

DebtKid — Tue, 26 Aug 2008 19:13:03 +0000

Like many new young entrepreneurs, three years ago I thought I was pretty hot stuff. I had a few employees, raised some angel money... and then proceeded to make huge mistake after huge mistake.

Of all my business blunders, these 7 are the ones that still make me gnash my teeth.

1) I Managed People like Michael Scott from “The Office”.

Many entrepreneurs are terrible bosses. Some of us simply cannot manage people well. We get stuck thinking that our “one great idea” will carry our business into "multi-millionairedom". While that may be the case on rare occasions, the majority of successful businesses are built by a smart, efficient and motivated group of employees, not just one person.

Growing a business beyond your own skills is vital if you ever wish to sell your company. You can only make so many sales calls in a day! If you want your business to hit the next level, you need other workers and you need to know how to lead and inspire them.

The good news is that this skill can be developed. If you've never had an employee before, try hiring a local college student on a part-time basis to get your feet wet.

Oh, and don't hide out in your office all day. It doesn't work.

2) I Hired My Friends.

Do not hire your friends. Especially in a start-up situation, you do not want to be your friend's employer. Having to lay off a friend of mine was one of the worst experiences I've had as an entrepreneur.

Also, you should almost never be the “boss” from 9-5 and “friend” again outside of work. It's too hard and really an inappropriate burden to put on yourself and your friend (no matter how many times they beg you to hire them!) I wouldn't even recommend going into business with a friend.

3) I Budgeted Like Britney Spears: Terribly.

You don't even have $100,000 in sales yet, so why did you just hire that fancy-pants PR firm? One critical mistake many new entrepreneurs make is thinking that just owning a business makes them a success. Wrong! Fail! Try Again!

An ergonomic chair that costs a thousand dollars does not make your business successful. That big office with a plasma TV and PS3 for your one employee does not make you a success.

Profits and positive cash flow are the marks of a truly successful business. Spending just to look successful or “big time” is what wanna-be entrepreneurs think is success.

4) I Leased A Fancy Office While My Large Basement Went Unused.

I thought I had to have a nice office for my business, even though we never had clients visit. It was a complete waste of cash, my most precious resource.

When you are first starting out, there is no better office than your basement or living room. Your parent's basement is even better: cheap rent, good food, and if you're lucky your Mom might still do your laundry.

Honestly though, for most software or web start-ups there is no need for an office in the early stages. The longer you can go without an office, the better. Investors love frugal founders, so if you plan on raising money for your business, stick to the home office as long as possible.

5) I Raised Money Before I Had Customers.

Raising money with just a “business plan” is not the best idea.

Do whatever you can to launch your business without raising money from outside investors. I don't care if you have to live on rice and beans for a year. Do it. A year down the line when you have a sick cash flow positive business that you own 100% of, you'll thank me.

If you do need to raise money, do so after you've already proven your business even if only on a very small scale. You'll get a much better valuation for your business as well as give investors more confidence in your business acumen.

6) I Mixed Business with Pleasure.

Have a separate checking account for your business. Never, ever, mix your business expenses with your personal life. It's a recipe for disaster.

7) I Assumed Everything Would Go According to Plan.

For the entrepreneur, realistic optimism can be good, but having optimism just to make things feel better can be deadly. If you are unable to see potential flaws or downfalls in your business, you must recognize and plan for them.

Bring in a partner or trusted mentor who can keep your optimism in check. I've seen too many entrepreneurs (myself included) get absolutely crushed when their business doesn't pan out the way they had hoped.

A few other mistakes I made:
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Not utilizing open source software. Don't pay a web designer to build your site from scratch. Have them install a content management system like WordPress and then have them design a custom theme. You'll save thousands.

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I “over-planned” my business. It's good to have a business plan, but it’s better to have a plan that you actually take action on and can then translate into actual results and sales.

Next week I'll share the top 7 things I did right as an entrepreneur. Make sure to subscribe so you don't miss it!

What mistakes have you made make you gnash your teeth?

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Have the Government Help You With Saving

André Nosalsky — Tue, 26 Aug 2008 14:05:24 +0000

There are many ways for you to start saving your money; some work, most don’t. Especially if you come from a family and background where nobody saved and that was not an integral part of dealing with money. One way to force yourself into saving is by having the government help you with it. This tip might not be for everybody, but if you are having a hard time saving money, it might do the trick.

When signing up for a new job, you always fill out a bunch of papers and sign many dotted lines. One of the forms you fill out is a tax withholding form. This is where you enter your number of exceptions and indicate if you want extra money taken out of your paycheck, so that at the end of the year you will not have to owe money to the government.

By entering a bigger amount into this “extra withholding” section, your employer will take out that amount from your paycheck and send it to the IRS. Then next year, after submitting your taxes, you will receive a bigger refund. The extra amount that you chose to be withheld from your paycheck should be there from the entire year.

Take the refund check and forward it to whoever handles your savings or investments, such as companies like Schwab and ING Direct. You can also fund an account with a social lending site and lend it out to other people while you earn interest.

The downside of this savings method is that you will miss out on the interest that you might have earned during the year by saving or investing this money yourself. This is a decision that you will have to make: is it worth it for you to lose interest dollars to be able to have the money saved in one lump sum at the end of the year, or are you diligent enough to save it yourself on a regular basis? Look at your history and past actions and let them guide you, not what you think you will do.
Caution: Please review your previous tax returns and talk to your accountant to make sure that this method doesn’t have any negative consequences for your particular situation. (It shouldn’t, but having that OK is always good.)

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