Just Bidding Around Online marketplace BizBuyer.com

If time is money--or even if it's not--there's a newonline site that can save you both time and money. Designed forsmall and midsized businesses, BizBuyer.com particularly benefitsstart-ups. It reduces time spent sourcing business products andservices, enables you to become operational sooner, and helpsjump-start your business by providing an instant national marketfor your products or services.

In essence, BizBuyer.com is an online marketplace. Entrepreneursdescribe services or products they want to buy, and qualifiedvendors bid to fill those specific needs. In a matter of hours, youcan obtain competitive quotes from pre-screened sellers coast tocoast. In most cases, responses are limited to the first fivevendors who submit bids; however, you can resubmit your request toreceive additional bids. You can review all bids--both individuallyand in a side-by-side comparison table--and contact a vendor toclose or refine the deal. Until then, you remain totallyanonymous.

"Our ability to source multiple vendors at once--andfurnish the buyer with the most competitive bid within a fewhours--dramatically simplifies the way small businesses purchasegoods and services," says Bernard Louvat, 35-year-oldpresident, founder and CEO of the Santa Monica, California,company, which launched in June 1999.

Starting out, most entrepreneurs are "all charged up toexecute their concept, but they get bogged down for weeks or monthsfinding the best phone system; getting the right computer andInternet connection; and searching for a copier, an attorney and alogo," adds Paolo Consiglio, general manager and senior vicepresident of BizBuyer.com. "With BizBuyer.com, you can submit20 different requests for quotes in one hour and receive multiplebids on each request within the next 24 hours. You quickly--and atno cost--get the detailed information you need to make an informeddecision." The service is free to buyers; vendors pay anominal fee.

"Many of us here have been through the start-upexperience," says Consiglio. "We know the pressure ofentering an empty office and saying `What do I do first? Where do Ibegin?' We help ease such pressures, and help business ownerssave money in more than 50 different categories of products andservices." These range from computers and financial servicesto cars and office space. For example, long-distance servicerepresents about 20 percent of BizBuyer.com's business, saysConsiglio. "An entrepreneur asking for quotes on long-distanceservice hears directly from Sprint, Qwest Communications Inc. andthree other suppliers that offer savings averaging 40percent," he notes. Once your business is up and running, youmight want to consider becoming a BizBuyer.com vendor, too. As ofJanuary, the company had an estimated 20,000 registered vendors, 30percent of whom have submitted requests for bids. "It's anexcellent vehicle to kick-start a new business," saysConsiglio. "Entrepreneurs who register as vendors haveimmediate access to a market consisting of thousands ofbusinesses."

Words To The Wise

How do you raise funds to launch or expand a business?Addressing that question from distinct perspectives are two newbooks from insiders: 2000 Financing Start-Ups (HarcourtBrace Professional Publishing, $139, 800-831-7799) and The SBALoan Book (Adams Media Corp., $12.95, 800-872-5627).

2000 Financing Start-Ups may be the most comprehensiveand informative book ever written on the subject. Authors RobertBrown and Alan S. Gutterman, international attorneys who haveworked closely with start-ups for many years, reveal practicalstrategies for finding and securing financing and guideentrepreneurs through the entire funding process. The 600-page tomehelps you zero in on the amount of funding needed, develop aneffective business plan, find alternative financing sources, valuea business, negotiate terms, and ensure compliance with federal andstate regulations.

Brown and Gutterman explain in their book that it was designedto help readers "understand what it takes to raise money. Itsfocus is small businesses operating in the corporate form, sincemost lenders and investors will insist on a corporatestructure." They go on to describe financing instruments andprovide an overview of related regulations and laws. Then theydiscuss the specifics of all types of financing, including internalfunds, vendor financing, strategic partners, private loans,commercial loans and leases, government funding programs, privateprimary transactions (such as sales to a small group of private orinstitutional investors and venture capital financing), and publicofferings.

The financing guide comes with a CD-ROM that, like the book,includes a sample business plan and other documents, as well aslistings of and useful details on thousands of venture capitalfirms, banks and SBA offices nationwide.

If you're put off by the magnitude or price of 2000Financing Start-Ups, or if your sights are set on an SBA-backedloan, consider Charles H. Green'sThe SBA Loan Book.Green enlightens readers by painting a clear picture of thegovernment agency and its financing options. And, as a veteranbanker, he provides unique insight on dealing with lenders. Nowvice president of the Bank of Commerce in San Diego, the author hasheld executive positions with three other banks and a venturecapital firm over the past 20 years.

The 200-page handbook, subtitled How to Get a Small-BusinessLoan, Even With Poor Credit, Weak Collateral and No Experience,uses plain English to uncover the lender's decision-makingprocess, at the same time acknowledging that perseverance is theultimate key to SBA funding. In the short time it takes to readThe SBA Loan Book, you'll learn how to fill out a loanapplication, explain extraneous circumstances, and improve yourodds of getting a loan--or know what to do in the event the lenderstill says no.

No Love

Question: A national casualty insurer wants ourhome-remodeling business to become one of its"affiliated" contractors. Is this a good deal?

Answer: I've seen this before. Be wary! Read on forthe sad tale of my friend Frank.

He lost control of pricing to the insurance company. The sagabegins when Frank was required to use the insurer'sdamage-estimating software. The estimating program was designed tosatisfy the insured--at the lowest cost to the insurance carrier.With this, one can expect revenues to drop 10 percent or more,while costs stay the same.

Frank was flooded with damage insurance claim referrals. Afraidto offend the all-powerful insurance company, he added newemployees, supervisors, office equipment and office space. He builtin lots of new overhead expenses.

Cash flow went up in smoke. Previously, Frank got paid 50percent of a job when the homeowner signed the con-tract and theremainder at completion. However, with insurance claim repairs, hegot no money upfront and was paid 45 days after completion. Tocover cash shortages, his line of credit quadrupled, as didinterest expense.

Frank's banker didn't take the time to understand thebusiness. He lent money based on a credit bureau loan-scoringmodel. When the banker finally received Frank's financialstatement, he was unpleasantly surprised and tried to call theloan--which Frank couldn't repay.

With cash flow and profits crashing down, Frank dropped hismarketing programs and laid off his estimator. He was a captive ofthe insurance company.

Today, the IRS is at the door. Frank does not have enough cashto make his payroll-tax deposits. At best, he will have the IRShammering him for a long time. At worst, he may lose his business.The moral of the story: Don't saw off more than you can chew.Talk to other remodelers working with this insurance company inother parts of the country. Is it working for them? Get youraccountant to run cash-flow projections based on the problems thatplastered Frank. Most importantly, don't be afraid to sayno.

George M. Dawson (gdawson@txdirect.net) is asmall-business consultant and author of Borrowing to Build YourBusiness: Getting Your Banker to Say "Yes" (UpstartPublishing, $16.95, 800-235-8866). Send him your financingquestions at bsumag@entrepreneur.com.

Card Sharks

Has your credit card company hit you with an unwarranted latefee? Have you been charged interest even though you paid your billin full? Has your purported delinquency resulted in a usuriousinterest rate?

Facing increased competition, credit card issuers are becomingmore creative--and not always principled--in generating revenue."It's a problem that directly impacts business owners aswell as consumers," says Linda Sherry of the nonprofitorganization Consumer Action in San Francisco. Some issuers hitcardholders with charges ranging from exorbitant late fees toexcessive interest rates. Hundreds of cardholders have filedlawsuits against credit card companies, accusing them of delayingthe posting of payments (intentionally triggering late penalties),charging for products not ordered, arbitrarily raising interestrates and other outrageous moves, according to the nationwideconsumer rights group.

Starting a business is hard enough without having to worry aboutgetting ripped off. But if you're one of the millions ofentrepreneurs using plastic to help finance your business, it maypay to worry-or at least to be more diligent about credit cardmatters. What you can do:

• Review the accuracy of each statement.

• Check payment due dates, as they can vary each month.

• Remit payments well in advance of the due dates.

• Have payments made automatically each month from your checkingaccount.

• Reschedule payments for your convenience.

• If you are contesting a late fee, keep and use the canceledcheck to prove the payment was made on time.

• Reduce your use of credit cards.

• Make paying off credit card debt a priority.

• Never accept credit insurance.

• Don't accept invitations to skip a payment.

• Resist using unsolicited blank checks.

• Research credit card rates and terms at http://www.bankrate.com

• Visit Consumer Action online athttp://www.consumer-action.org

Paul DeCeglie (MrWritePDC@aol.com) is a formerstaff reporter for Journal of Commerce and AmericanBanker.