Saturday, December 18, 2010

Five Small Business Banking Mistakes

The Bank of England in Threadneedle Street, Lo...Image via Wikipedia
As a virtual CFO, I have worked with a lot of small  businesses to improve their financial processes.  A lot of Entrepreneurs are so busy working in their business versus on their business, they make some common banking mistakes that can hurt their business.  The following are five common banking mistakes that I have observed and are easily fixable.

1.  Banking Only at One Bank: It is easy for a small business owner to utilize one bank and perform your banking activity through that one institution. However, this can have ill side effects. When it comes time for a loan and your bank denies you, if you don't have a relationship with another bank, you could be out of luck. Secondly, you should make banks compete for your business and shop around for the best deals.  You need to have a good handle on what your money management needs are to get the best deal for you.  Thirdly, if your business is with a small bank and you are fast growing and needing financing, you could outgrow the one banks ability to finance you by hitting their exposure ceiling.

Friday, December 17, 2010

Financial Traffic Accident Waiting to Happen

I am designing a Customer Lifetime Value Financial model for client.  We were digging into his website traffic data and found a disparity in some of the traffic data provided through various sources which would drive one to quite different conclusions.  This was frustrating!

I did a little research and found the following data in the November 29, 2010 issue of Brandweek.  The article listed Nielsen, comScore, Compete, and Quantcast numbers with the firms' internal data. With different filters and methodologies being used to determine what is a unique visit, I wasn't surprised about some variance.  However, there are big differences.  Even Nielsen has reported that there data has under counted visits.  Here is some data for some popular sites which highlights some of the challenges.  There are many stories about websites contesting their

                                            Unique Audience Numbers in Millions*

Site                  Hulu     Daily Beast    Huffington Post     Twitter   BreakMedia   ESPN
Internal Data     30.0          4.8                    44.2                190.0        34.2          NA
Quantcast         25.0          3.9                    24.7                  59.1        22.7         20.6
comScore        21.7           2.9                   23.1                  25.1         34.3         42.7
Compete          13.6           1.9                   12.3                  25.8          NA           0.136
Nielsen             12.3           NA                   13.0                  20.1          NA         21.1

* Other than Nielsen, data is for October 2010.  ESPN does not disclose traffic.

For the purchasers of this data, there is a lot of confusion as to who to believe and how do you deal with the data disparity.  Unique visits is one of the measures used to monitor the effectiveness of your social media strategy.  Have you seen this disparity with your sites?  I have with my alumni association web site.

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