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How Small Businesses Can Find Safety Before the Next Bank Crisis

April 1, 2023 by www.nytimes.com Leave a Comment

The collapse of two regional lenders, Silicon Valley Bank and Signature Bank , last month caused a ripple of panic among small businesses across the country as owners watched the news unfold and wondered whether their assets were safe — even if their deposits were not in one of the failed institutions.

Now that the panic has begun to subside, advisers are recommending that small businesses examine their accounts to determine their level of risk and protect their deposits from a future bank failure.

When Melissa Wirt started Latched Mama , an e-commerce company that sells apparel for nursing mothers, she did it with a loan from her personal savings — as most small-business owners do . She chose to set up a business account at Atlantic Union Bank because her personal accounts were there, which made it easy to transfer funds if her business needed a cash infusion.

Plus, she liked her personal relationship with Atlantic Union Bank. “They watched my business grow and my family grow,” Ms. Wirt said. “We went through the collective trauma of Covid together, and I learned that banks can care about their customers.”

She rarely carries more than $250,000 in the bank, but during the recent banking turmoil, she worried that if Atlantic Union also failed, she might not be able to make her $60,000 biweekly payroll for her nearly 40 employees. So she opened a second business account at a larger bank.

How many small businesses are at risk?

Experts say most small businesses face little risk in a bank failure. The Federal Deposit Insurance Corporation insures deposits of up to $250,000, and most small businesses probably keep far less money than that in the bank. The JPMorgan Chase Institute surveyed 600,000 of its small-business account holders and found that they held a median cash balance of just $12,100 .

Two things can change that risk assessment: having employees or being funded by venture capital.

Payroll costs are one of the biggest expenses for most companies. Gusto, a payroll and benefits provider for more than 300,000 small businesses, said nearly half its clients with 50 to 99 employees had monthly payrolls above $250,000. That figure jumps to 95 percent for firms with more than 250 employees.

But only 20 percent of the country’s roughly 33 million small businesses have employees, according to the Small Business Administration, which means few have significant payroll costs that can push their deposits above $250,000.

And just 5 percent of companies are sitting on war chests from investors. “Silicon Valley Bank wasn’t banking small businesses on Main Street, U.S.A.,” said Aaron Klein, senior fellow in economic studies at the Brookings Institution. “They were banking tech start-ups primarily with venture capital backing.”

As a small-business owner, should I worry about my bank failing?

Bank failures have been rare since the last financial crisis, when nearly 500 banks collapsed from 2008 to 2013. But they can happen at any time. A recent research paper suggests that nearly 200 banks are at risk based on the same conditions that brought down Silicon Valley Bank: exposure from rising interest rates, plus high levels of uninsured deposits.

“I think this is a really interesting time for folks to ask: ‘What type of bank am I banking with?’” said Rebecca Romero Rainey, president and chief executive of Independent Community Bankers of America, a trade group. “The risk profile is going to be very different for a bank that is specialized in a unique or higher-risk industry.”

I have less than $250,000 in my account. What should I do?

As long as your deposits are insured by the F.D.I.C., your risk is limited to inconvenience and delays. Regulators usually take over failing banks on Friday afternoons so the Treasury Department can spend the weekend sorting everything out. By Monday, depositors usually have access to their funds.

Small-business owners should instead focus on their day-to-day operations. “Go back to worrying about your business,” Mr. Klein said. “When a bank fails, the government is there lickety-split.”

I have more than $250,000. Should I open multiple accounts?

You can have as many accounts at one bank as you want, but any balance in excess of $250,000 across all of your deposits will not be insured. The F.D.I.C. limits are per depositor, per institution — not per account .

However, there is some nuance.

Business accounts are insured separately from personal accounts. That means one depositor can be insured both as an individual and as a business. In Ms. Wirt’s case, for example, she would be covered for up to $250,000 for her Latched Mama accounts and up to $250,000 for her personal accounts.

Additionally, if you have a joint checking account with a spouse, each person is insured, for a total of $500,000. For example, if you keep $300,000 in the joint account plus $100,000 each in a savings account, your entire $500,000 will be insured.

However, having multiple signers on a business account does not increase the insurance coverage. The best thing to do is talk to your banker, Ms. Rainey said.

Should I open accounts at other banks?

Diversifying your holdings is always a good idea. The F.D.I.C. insures each depositor at each institution, so spreading your wealth offers more coverage. Having a second banking relationship also makes it easier to quickly wire funds to safety if you worry that your bank may be unstable.

“Always have a backup strategy; hope is not a strategy,” said Jeni Mayorskaya, founder of Stork Club, which creates reproductive-health benefits packages that companies can offer their employees.

She has raised more than $30 million from investors and was encouraged to keep her funds at Silicon Valley Bank. But when she started hearing whispers that the bank might fail, she opened accounts elsewhere.

“I grew up in Russia in the 1990s, and what we observed was a financial collapse every five years,” she said. “We learned you always have a diversification strategy.”

What other options are available?

Banks can mitigate risk through the IntraFi Network, a system that can split a customer’s large deposit into chunks that are less than the $250,000 cap. It then sends those chunks to other banks in the system, essentially giving customers multiple F.D.I.C.-insured accounts without having to open — and track — each account.

Customers have two options for how it happens.

In the first situation, banks chop a customer’s money up into certificates of deposit of less than $250,000 and place those accounts in other institutions. The C.D.s earn interest, but the downside is that the money cannot be withdrawn without a penalty before the C.D.s mature.

The second option is a sweep account, in which a customer’s balance in excess of $250,000 is “swept out” every night to other IntraFi Network banks in smaller blocks.

With either choice, these deposits are protected by the F.D.I.C. because they are technically sitting elsewhere.

“This has been more relevant these past few weeks,” said Matthew Burke, chief executive of Cape Cod 5, a 168-year-old community bank in Massachusetts. “Customers can still log in and see their accounts, but we essentially achieve 100 percent F.D.I.C. insurance.”

The service is free but relevant only to businesses with uninsured deposits. For Cape Cod 5, that means fewer than 1,000 of its more than 100,000 customers. Mr. Burke has been reaching out to those customers to set up sweep accounts. Some have declined, saying they are comfortable with the bank’s track record.

But others, like the accounting firm Glivinski & Associates, are using the service. Because Glivinski handles financial matters for its clients, it needs to have access to cash, and the sweep accounts allow it to have operating capital and keep it insured.

Glivinski has also been sending its clients to Mr. Burke to set up sweep accounts. “Almost 80 percent of our clients are nonprofits,” said Valerie Silva, Glivinski’s chief operating officer. “Even they have more than the F.D.I.C. limits in the bank because their budgets are in the millions.”

Should I worry about my service providers?

The collapse of Silicon Valley Bank caused unexpected fallout for small businesses because several payroll processing firms banked there and their funds were temporarily held while federal regulators sorted through the mess. In the meantime, those firms could not cut paychecks for their clients’ employees.

One of the lessons Ms. Wirt, the owner of Latched Mama, learned was: Ask where your service providers bank. She was pleased to learn that Gusto, her payroll firm, had backups in place. If it got caught in a bank collapse, Gusto said, it could easily handle Ms. Wirt’s payroll from another account.

“We say it’s good to have a redundant payroll process system,” said Mike Taylor, Gusto’s chief financial officer.

Filed Under: Business Banking and Finance, Small Business, Silicon Valley Bank, FDIC, Business, Banking and Financial Institutions, Federal Deposit..., why banks don't lend to small businesses, banks best for small business, bank best for small business, small business bank of america, small business management 6th canadian edition test bank, small business best bank account, bank of america small business, #1 small business bank, top small business bank accounts, top 10 small business bank accounts

32nd Vietnam Expo promises to boost business linkages

March 31, 2023 by en.vietnamplus.vn Leave a Comment

32nd Vietnam Expo promises to boost business linkages hinh anh 1 The 32nd Vietnam International Exhibition (Vietnam Expo) will take place in Hanoi from April 5-8 (Photo: VNA)

Hanoi (VNA) – The 32nd Vietnam International Exhibition ( Vietnam Expo ) will take place in Hanoi from April 5-8 with the participation of more than 500 domestic and foreign enterprieses, the event’s organisers have announced.

Exhibitors from Vietnam, the Republic of Korea, Japan, Indonesia, Poland, and mainland China will showcase advanced equipment and technologies in electronics – machinery and supporting industries and digital technology – e-commerce; food industry, handicraft and beauty sectors at more than 600 booths.

The expo is expected to offer organisations and businesses opportunities to enhance the exchange of experiences, promote their products, seize investment opportunities, and transfer technologies to improve efficiency in production and business.

Other seminars to boost efficiency in investment and trade promotion in both domestic and foreign markets will also be held.

Besides, under the Improving Private Sector Competitiveness (IPSC) project, the US Agency for International Development (USAID) will provide assistance for 20 Vietnam ese small and growing businses (SGBs) which have received technical support from the project to show their products and services at the expo.

Through innovative skills training, tailored technical assistance, and expanded coaching and mentorship networks, the project will improve SGB efficiency, increase revenue, and help SGBs act as sustainable sources of inclusive economic growth and job creation as well as introducing their brandnames to international market.

According to the organisers, each year’s event will feature the market’s tendency in general and growth pace, adaptation of businesses in particilar.

Vietnam Expo is held annual in Hanoi in April and Ho Chi Minh City in December./.

VNA

Filed Under: Uncategorized Vietnam Expo, business linkages, trade, Vietnam, Vietnamplus, Vietnam News Agency, Business, ..., how cultivating existing client relationships can boost business development, japan and vietnam agree to accelerate business reopenings, vietnam international trade fair - vietnam expo, packaging print & label vietnam expo, packaging print & label vietnam expo 2021, boost business relations, boost business revenue, most promising online business, boost business outcomes, boost business partnerships

This is how a Singaporean mum built a 6-figure business with just $2,000

April 1, 2023 by www.asiaone.com Leave a Comment

Having kids doesn’t come cheap.

According to NUS economists in 2018, the cost to raise a child in Singapore is estimated to be between $280,000 and $560,000, depending on household income.

From the get-go, you have to make decisions about the right formula, diaper brand etc. And for working mums who are breastfeeding – the right type of pump.

One local mum turned her experience and challenge finding an affordable breast pump into a business opportunity.

With $2,000, straight out of her kids’ savings, she started a breast pump brand that now rakes in a six-figure annual revenue.

To find out more, Rachel Kelly spoke to Stacy Chow, Founder, Baby Express on The Afternoon Update.

Rachel Kelly: Let’s talk about the business. What was the catalyst that made you take that leap of faith and decide that you were going to launch Baby Express?

Stacy Chow: I did plan to head back to the workforce once I had recovered from giving birth, but I was always wondering how I was supposed to be able to breastfeed and work at the same time.

Back in 2018, I found myself looking around for a portable breast pump in Singapore but to no avail – which I believed was something that a working mother would need.

I happened to meet up with a few suppliers and manufacturers, where we got on and that was how things really started – my own business of making breast pumps.

We were fortunate as the local market was lacking them then, creating this fantastic opportunity for us to grow rapidly.

We worked with a factory to conceptualise some designs for us and we fine-tuned from there, making it as practical as possible for working mothers.

https://www.instagram.com/p/CqcwngxS3ON/?hl=en

Rachel: So what’re you offering currently? Are you expanding your product portfolio as well?

Stacy: We launched Baby Express – a portable and wireless breast pump with no obstructive wires – in August 2019.

It is hands-free and very quiet. As many offices do not have a lactation room, working mothers can then pump from their desks, during meetings and just about anywhere.

In terms of portfolio, we have extended slightly this year because we realised that the market not just wants a product, where you can get it from anywhere, but an experience and a guide.

That’s also partly why I took up marketing courses to understand how the market works, a lactation consultant course and a postpartum doula course – even though I wasn’t from an entrepreneurial background.

We’ll be able to assist our users and guide them on the right breastfeeding journey. We also have the essentials that a breastfeeding mum would need.

Rachel: I think it is important to enjoy the convenience of having a comfortable pump even when you’re sitting at your desk, and not carrying around something big and chunky – especially when you’re balancing a baby, a laptop and a pump at the same time. What were some of the key challenges that you faced? What was sales like in the beginning compared to now?

Stacy: The biggest challenge was not really understanding how to run a business properly.

It was really something that I chanced upon with lots of opportunities and help from many great people to get started on the journey.

In the beginning, it wasn’t that great because we were not a pioneer in the market as there were others available overseas, but our primary goal was to create something affordable yet reliable.

We started off selling about less than 50 pumps a week to about 500 currently.

Rachel: What are some of the key lessons you’ve learnt that you’re able to share with the mothers out there who may be thinking of a career shift or want to start a business of their own – without neglecting their kids too?

Stacy: It’s not the easiest with 4 kids and an active business.

The good thing is that the business runs on a flexible schedule so that’s one way to manage my priorities.

Another lesson that I’ve learnt is to really stand in the shoes of a consumer to see if the product really helps. I think it’s very easy to own a product nowadays but the main problem is left to wonder how this product is going to integrate into people’s lives.

Listen to the full podcast on Awedio: SPH’s free digital audio streaming service , as Stacy shared more on how she turned $2,000 in savings into a breast pump brand that now brings in six-figures in annual revenue.

Download the podcast.

ALSO READ: How this single mum of 4 became a super successful businesswoman in Singapore

This article was first published in MONEY FM 89.3 .

Filed Under: Uncategorized Lifestyle, Entrepreneur, Mothers, Business, 6 figures business, business just eat, business just eat login, business just like crime has become a unified global field, business just in time, business just dial, business just picked up gif, business just in case, business just giving, business just park

The Apprentice star Megan Hornby’s ‘business was “on verge of going under” after missing out on Lord Sugar’s £250,000 investment’

April 1, 2023 by www.dailymail.co.uk Leave a Comment

The Apprentice star Megan Hornby’s business was ‘on the verge of going under’ after her time filming the BBC show it’s been reported.

The entrepreneur, 26, narrowly missed out at a spot in the final when she became the third of the final five to be fired, ahead of Marnie Swindells landing Lord Sugar’s £250,000 investment.

And according to The Sun after filming wrapped Megan’s sweet shop in Hull faced closing its doors due to t he cost of living crisis .

The publication reported that Megan approached her local council for help saying she needed to revamp the business in order to stay afloat.

Speaking in a council meeting she said: ‘After initially flourishing, my business has struggled for the last six to nine months to the point that we are on the verge of going under’.

Change of fate: The Apprentice, 26, star Megan Hornby’s business was ‘on the verge of going under’ after her time filming the BBC show it’s been reported

Shock: It’s been reported after filming wrapped Megan’s sweet shop in Hull faced closing it’s doors due to t he cost of living crisis

She opened the business during lockdown selling sweets and cakes, before deciding to ask for an alcohol licence.

The Sun also revealed she told councillors: ‘People just can’t afford as much as they did before because of the cost of living crisis so I had to do something to keep the doors open’.

‘That’s why I want to start selling hot food like burgers and chips and alcohol as a venue for eating and drinking’.

Luckily her request was granted and the businesswoman revamped the sweet shop into a trendy cocktail bar.

She often takes to social media to showcase the quirky interior as well as a whole host of impressive drinks.

MailOnline have contacted Megan’s reps for comment.

It comes after MailOnline reported Apprentice winner Marnie Swindells watched her dad die in the caravan they shared when she was just eight years old — but believes her childhood trauma drove her to success.

Lord Sugar ‘s new business partner was wearing her school uniform when her beloved father lost his life in front of her eyes after she directed an ambulance through the caravan park to where he urgently needed medical care.

The place to be: Luckily she requested an alcohol licence and the businesswoman revamped the sweet shop into a trendy cocktail bar

Party time: She often takes to social media to showcase the quirky interior as well as a whole host of impressive drinks

Just days after witnessing the heartbreaking event, boxing gym owner Marnie, 28, performed the lead role in her school’s rendition of Grease, dancing and singing on stage in a bid to prove to the world her determination to succeed, even as a grieving child.

In an exclusive interview, Marnie explained to MailOnline how she kept her late dad by her side during the Apprentice process by wearing a gold bracelet he had planned to gift her when she turned nine, but he sadly died weeks before her birthday.

She said: ‘My dad died very suddenly while we were in the caravan when he was 47. I saw the whole thing happen and I was actually the person that got the ambulance.

‘I ran to direct them because they couldn’t get in the site where we lived, I was running in my school uniform in front of the ambulance and there was this immense pressure to get them to the caravan quickly to try and help.’

An emotional Marnie didn’t want to divulge exactly how her father died but explained it was an accident, which on a different day could have been avoided.

Marnie, who grew up in Oldham, Manchester, said the same week her dad passed she acted in a school musical after her mum advised that staying strong was the only way to move forward.

Honest: Apprentice winner Marnie Swindells watched her dad die in the caravan they shared when she was just eight years old — but believes her childhood trauma drove her to success

Battle: Days after witnessing the heartbreaking event, boxing gym owner Marnie performed the lead role in her school’s rendition of Grease (Marnie pictured in her caravan as a child)

It was the anger and confusion that Marnie felt following the sad loss of her dad that inspired her to take up boxing, where her negative energy was channelled in a positive way

She explained: ‘I was the lead part in a school play around the time he died and within two days I was back in school and performing.

‘He died on a Tuesday and on the Friday night I played Sandy in Grease and was up on stage singing and dancing. My mum is very tough, and she said it’s happened now, and we have to carry on.

‘It was a strange time because I felt I had to step up and become the man of the house because my mum was never very good with forms or letters, all the admin that comes when someone dies even at eight years old, I felt very responsible. I became my dad, I had to step into those shoes.’

She fought off competition from 17 candidates to win Lord Sugar’s £250,000 investment during the 17th series of The Apprentice and Marnie says her late father was with her every step of the way.

In particular, she felt his presence riding in the back of Lord Sugar’s Rolls Royce after being crowned champion, wearing the gold bracelet he never had the chance to gift her.

She said: ‘My dad left me a bracelet that my mum had no idea about and he must have been saving up for. It was a small, gold bracelet.

‘He died a few weeks before my birthday and my mum found it in his coat pocket when she was clearing out his stuff.

‘I wore it throughout the final few moments of the Apprentice. In the Rolls Royce, I wore it because I wanted him to be in a Rolls Royce with me. I wore it during the You’re Hired show, which was a way he could physically be there.’

Filed Under: Uncategorized dailymail, TV&Showbiz, Hull, The Apprentice, The Apprentices Megan Hornbys business verge going missing final, foreign exchange $250 000 balance election, 250 000 views on youtube, when sugar is 250, 250 000 yearly income, 250 000 homeowner exclusion, rockstar 250.000 gta v, arabian desert 250 000 km 2, why isn't verge going up, why is verge going down today, when will verge go up

I was homeless & bouncing from job-to-job after tragedy hit… now I earn £800k a YEAR with my VERY rude business

April 1, 2023 by www.thesun.co.uk Leave a Comment

AFTER being homeless and overwhelmed with tragedy, a business savvy woman has turned an adult store into a booming trade.

Tami Rose from Mississippi , US, opened Romantic Adventures in 2009 and has since gone on to make £800,000 a year.

Despite lots of small shopfronts closing due to the retail apocalypse that was heightened during covid – Tami’s business has tripled.

While her close friends casted judgement, the Navy veteran took a chance on the sex toy business, which has now flourished.

Tami told the Daily Star: “I am old enough to know better but young enough to still do it anyway.”

She soon had a knack for the industry and after her first year of trading she turned over £408,000.

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She followed that up with more than £61,000 profit the year after.

However, the woman has not always enjoyed success and admitted she struggled in her formative years.

She joined the Navy at 17 because she couldn’t afford further education and it was the best way for her to secure a college degree.

She said: “My family was blue collar and they did their best for me but I wanted to handle my own college bills.

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“I actually got a college education and a year of law school, which was long enough to find out it wasn’t for me.

“While I value my time at Baylor I think corporate life would equal death.

“That is probably how I wound up in the sex toy business and loving it so much.”

Tragically, Tami lost “the love of her life” after only two-and-a-half months of marriage during her service.

It inspired her to become a religious petty officer in the Navy, which involved informing widows their spouses had died in combat.

After her time in the forces, she opened a spa business that was later destroyed by Hurricane Katrina .

She said: “I didn’t go straight from the Navy into the adult business.

“I actually bounced around through a few sales jobs then got my certification in massage therapy.

“[This was] another contributing factor in my comfort with the adult business and the ability to teach people about their anatomy in a calm respectful way.

“It was a tough few years but no matter the economy or the bouts of conservatism the South occasionally struggles with, sex always sells.”

Tami dated a man who owned Romantic Adventures where she later decided to work.

While her boyfriend was ashamed of running a sex toy shop, she was determined to make it work.

Eventually, she took it over in 2009 and turned it into a thriving hustle that raked in annual profits of £800,000.

She said: “In Mississippi, the only acceptable things for a good southern woman to earn money at is education or something in the medical field.

“But in both those fields they don’t make as much as their male counterparts.

“I was already used to being outside of the norm as a holistic practitioner so sex toys didn’t seem like that far to jump.”

The businesswoman admitted she lost friends in the process but it all turned out for the best.

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She said: “I have paid a high social cost but the friends I do have are true blue and don’t worry about making me fit into either round or square ped holes.

“They just let me fill the Tami-shaped hole in their heart.”

Filed Under: Uncategorized jobs, Sex, Sex Toys, Side hustle, Small Business, United States, spikes under bridge homeless

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