If your small business were a grocery store or automotive mechanic shop, most every lender in the U.S. would immediately understand your business model. If you were to approach them looking for a line of credit, they would be able to rather quickly determine if your business is able to receive some small business financing from them or not. However, as the owner of a telecommunications company you know that this is not always the case for your industry. Traditional lenders just simply do not understand how telecom companies do business and the intracacies of telecommunications funding. If you are a large multi-national telecom company, funding abounds for you just simply because of the huge amount of revenue your business generates month after month. However, if you are a small telecom business, obtaining that line of credit can be much more difficult. When you approach a traditional lender for funding, you will likely find that they do not understand your business model and telecommunications financing in general. It is not in the traditional banker’s interest to work with telecommunications businesses with receivables that are all small amounts with many customers. Generally, your receivables take 45 or more days to receive after delivery of services. Because these billing issues are unique to the telecom industry, traditional lenders do not fully comprehend the fine details and tend to choose to deal with businesses in more traditional roles. Once your small telecommunications business is on solid ground, and you are looking to expand your market base, there are three options readily availablec to you for obtaining small business financing. These three options are: factoring, asset based solutions, and investment capital. Let’s take a quick look at each of these options: Factoring: Factoring is a financing process which allows your company to borrow money against its receivables; your receivables are used as the collateral for the loan. The down side to traditional factoring is that this type of funding generally comes with high interest rates. By finding a lender with telecommunications financing experience, you can sometimes find a lower rate. This makes factoring a strong consideration only if you are able to locate a specialized lender with telecommunications financing experience. Asset Based Solutions: Asset based funding solutions involve using your existing contracts, equipment, and other assets, as the collateral for your funding. This can be a good option to consider if you have a lot of assets or large contracts to leverage. However, if you own a very small local telecom company, your company may not have the assets or contracts to make this form of funding work. In that case, investment capital may be a good option to consider. Investment Capital: If your business is open to the idea of investment capital, versus a traditional line of credit, investment capital can be a win-win situation for everyone. While finding small business financing can be challenging in the telecommunications industry, it is not impossible. When it is time for your small telecom company to expand you should consider factoring, asset based solutions, and investment capital as possible options. Whatever your decision may be, as long as it fits within your long-term business plans, then you are sure to succeed. Thermo Credit, LLC is a financial services company focused exclusively on telecommunications financing. Our objective is to serve established companies that need capital to expand their operations. Learn more about Thermo Credit at http://www.thermocredit.com.
Senators Rockefeller and Snowe have formulated a new Cybersecurity bill that they describe in today’s Wall Street Journal. (Use Google news to get to the full article.) The Bill as proposed will be very disruptive to the operations of every business and will do essentially nothing to prepare the US for cyberwar. Regulations have been tried before. One of the main drivers for investments in IT security have been regulations. California 1386 required the disclosure of data losses that has had a remarkable impact on banks, insurance companies, and schools. HIPPA created an industry of consultants to address potential health records losses. GLBA created a mountain of privacy letters sent to every account holder in the country. And Sarbanes-Oxley, thanks to an off-hand reference to requiring companies to deploy a security framework, has caused mountains of paper work and investment for publicly traded companies. But regulation is not the primary driver for new technology, new investment, or new training; the threats are. The Payment Card Industry (PCI) standard, was created by the credit card industry to protect the viability of their brand. Too much credit card theft was finally hurting them and they now require anyone who handles credit card information to encrypt that data. Aside from progress being made on that front , the threat against networks and data continues unabated. Rockefeller and Snowe’s Bill will add nothing to the US’s cyber preparedness. It’s main points are: • Create the position of national cybersecurity adviser to coordinate government efforts and collaborate with private businesses. The person who fills this position would be confirmed by the Senate and answer directly to the president. This position already exists. It was created in response to Melissa Hathaway’s Cybersecurity Policy Review (CPR). Howard Schmidt was appointed by President Obama to be the Cybersecurity Coordinator. If cyber security can truly be coordinated by someone with no budget, no authority, and dozens of competing factions to coral, Howard is the man for the job. What possible benefit could be derived from having a Senate confirmation of the person selected for this role other than to policiticize the process? • Launch a new public awareness campaign to make basic cybersecurity principles and civil liberty protections as familiar as Smokey the Bear’s advice for preventing forest fires. The CPR also called for a Smokey the Bear campaign. Just as devastating forest fires still occur despite Mr. Bear’s exhortations, debilitating cyber attacks will occur even if a well intentioned mascot stands up for cyber security. A new public awareness campaign would be worthless. • Support significant new cybersecurity research and development and triple the federal Scholarship-For-Service program to 1,000 students. This program recruits individuals to study cybersecurity at American universities and then enter public service. Cyber security is probably the most heavily researched endeavor in all of computer science. Tens of thousands of extremely bright people are crouched over their computers around the world every hour of every day tracking the latest cyber threats and countering them in near real-time. If some university applied for a grant to study a particular defense or technology the threat would have moved on before they were awarded the money they asked for. This is one arena the government is not needed and public research cannot contribute to. • Create a market-driven process that encourages businesses to adopt good cybersecurity practices and innovate other ways to protect our security. Companies that excel at this will be publicly recognized by the government, and companies that fall short in two consecutive independent audits will be required to implement a remediation plan. There already is a market driven process to encourage good cyber security. The repercussions of being attacked successfully far outweigh the expense of defense. Companies are spending billions of dollars on cyber security today and growing that investment at a rate of over 20% annually. Public ridicule and recognition from the annual GAO audits of government agencies’ cyber security has not been very effective in getting them to change their ways. Why should the private sector be subjected to what could only be a massive incursion into the way they do business? •Encourage government agencies and private businesses to work together to protect our civil liberties, intellectual property rights, and classified information. Our bill provides for unprecedented information sharing, including giving cleared private sector executives access to classified threat information. Any executive that wants access to threat information is welcome to join the FBI’s Infragard where this is already done. The rest of the oft-repeated refrain for more public-private partnership is wasted. The private sector is well prepared for cyber threats and will reacte quickly to any changes. It is the government that needs to change its ways. • Require the president and private companies to develop and rehearse detailed cyber-emergency response plans in order to clarify roles, responsibilities and authorities in a time of crisis. In a cybersecurity emergency, such as a terrorist attack or a major natural disaster, our country must be prepared to respond without delay. There have been major earthquakes, floods, power-grid failures, and Internet outages for decades. We are still here and the Internet is alive and well. I can see that government officials want to have proposed legislation on the books so that they can say “I told you so” after the next cyber incident. But preventing the next incident is not only possible, but is easier to accomplish than creating a massive response capability that will be caught off guard anyway. In my open letter to President Obama published the day before he was elected I proposed the measures that have to be taken to protect government networks and assets from cyber attack. Cyber preparedness is something the US military and agencies have to take on. They already own and control their networks. They do not need legislation to do their jobs. Here is an abbreviated list of the steps that could be taken today by the US government. 1. Immediately issue a Presidential order that establishes responsibility for cyber security with real negative repercussions for those who fail to prevent breaches. For civilians this means being fired; for the military this means court marshal, demotion, and expulsion for serious security breaches. Do not allow the blame to be foisted off on contractors. The only way that security gets implemented is if someone’s job is on the line. 2. While the National Institute of Standards and Technology (NIST) has been responsible for security standards and has created some great documents it is a stretch to try to make the entire government comply with them during your term as President. Those responsible for locking down government networks and defending data will need to be empowered with a set of strict rules. These rules should include: I. All access must be explicitly authorized. II. All users must be identified and strongly authenticated. III. All applications must be reviewed for security vulnerabilities. IV. All network attached systems must be scanned for vulnerabilities on a schedule. V. All network connections must be firewalled. VI. All firewalls must be configured to “deny all except that which is explicitly allowed”. VII. All government networks must be mapped and understood. VIII. All data needs to be encrypted at rest IX. All communication links need to be encrypted X. All intrusions need to be aggressively analyzed and appropriate responses executed. 3. Empower OMB to withhold funding to any agency that does not comply in a timely (less than 6 months) manner with 1. and 2. 4. Decentralize security management. One person cannot be effective in overseeing a cyber security policy. Security is everyone’s responsibility and the system should motivate responsible individuals to take action. 5. Fix the DHS information sharing capability by learning from the recent advance of social networking. Getting members of law enforcement to collaborate effectively is not a task that can be accomplished by rolling out a quick fix technology. In a secure environment individuals could find the most effective way s to communicate and share critical information. 6. Do not confuse security awareness campaigns with actual security improvements. The time, effort, and money that is spent on publicity campaigns could be better allocated to securing government networks. 7. Do not propose a new massive spending effort or any new departments to oversee cyber security. Security should be part of every computing infrastructure purchase and everyone’s job. 8. Enhance transparency. Publish the methods of attacks used successfully against the Pentagon and NIPRNet. That is security awareness at its best. If the community knew the types of attacks and the sources it could better prepare for them. 9. Stop spying on citizens of the United States. While discovering terrorist plots is a legitimate function of the FBI, the violation of the privacy and individual rights of the people is too high a price to pay for the dubious information gleaned by snooping on email. 10. While offense cyber techniques will be developed, keep in mind that in cyberspace the best offense is a perfect defense. Congressional oversight of these ten points may well be effective. But new legislation is not needed. The executive branch can and should take the lead. The country is getting tired of legislation. Passing a cybersecurity bill would not do anything to better prepare us for cyber attack. Beefing up our defenses with accepted security practices would.
1. Mergers and Acquisitions Sales is already known as a high turnover profession, but the recent rash of mergers and acquisitions in telecom make it highly unlikely the representative who signed you to your term agreement will still be there to assist you within a year. After making it past the phase of bankruptcies following deregulation, the next phase is mergers and acquisitions. In the past couple of years, a few of the major mergers include Level3/Broadwing (Focal), XO/Allegiance, ATT/SBC/Bell South, MCI/Verizon, Paetec/US Lec, and Time Warner/Xspedius among many others. By using an Independent Telecom Agent, you can be sure that regardless of continued merger activity or bankruptcies, your Independent Telecom Agent will continue to have the same contact phone number and email address. He/She will not be laid off or fired, and will continue to supply you all of the options you need. 2. Single Point of Contact Regardless of whether your Independent Telecom Agent recommends a single carrier solution or a multi-carrier solution, you still have a single point of contact to deal with the person who knows your account best. During the pricing and evaluation process for a new carrier, it is typical to get at least 3 bids and have at least two appointments with at least three carriers. The number of appointments you have to schedule could easily reach up to a dozen before an educated decision is made on your company’s communications. If you use a qualified Independent Telecom Agent, you can spend one appointment determining the best course of action, and just one more evaluating the best options available in your market. Having a single point of contact is a huge time saver! 3. Person who understands your company, how you make decisions, and why. Your Independent Telecom Agent acts as an assistant buyer once he/she understands your business needs and preferences. He/she gets to know your organization, your goals and long range needs, and how you make decisions and why. Why would you want to repeat that process every couple of years? 4. You get to hear the truth! Perhaps this should be ranked #1! When you use an experienced Independent Telecom Agent, you tap into a wealth of knowledge and experience of someone who has been in the field for many years-and most likely with multiple carriers. Your agent will typically have experience dealing with multiple carriers in your market, and can tell you how they really perform. Not the rosy picture they all want to paint for you. Who has the most reliable network? Who has billing problems? Who is going bankrupt? Who can make the desired install date? When using an Independent agent, you don’t have to listen to “The Company Story” for each carrier, as they always tend to dress up their deficiencies. You get to hear the truth. 5. Unbiased opinion of multiple carriers and their product lines Based on where your business is heading, whether that be expanding, streamlining, or contracting, your Independent Telecom Agent can put you in the right situation. Just like buying an inexpensive phone system that can’t grow with you, and can create the need for a forklift upgrade sooner than expected, getting stuck with a carrier that can’t meet your future expectations can be crippling to your operation. Since most carriers have gone to term agreements in the T-1 age of communications, it’s key to get set up with a carrier that can move with your needs. Do they have MPLS? Do they do SIP trunking? Can they offer an IP-VPN solution for your remote sites? Your Independent Telecom Agent knows the carriers’ products and limitations, and can put you in the right solution for your company. 6. Agents are invested in your success long term This is an incredibly important concept to understand when choosing to use an Independent Telecom Agent! When you work with a direct sales representative for a telecom company, one that may be here and gone tomorrow (rep or company), they are paid only to bring in the sale. As we all know in the world of corporate sales, comp plans drive behavior, and sales reps are specifically told, “If the customer has a problem, send them to the Help Desk. Do not get involved. You are paid ONLY to bring in new business.” There is absolutely no motivation, despite the direct representative’s best intentions, for them to ever speak to you again after you sign the dotted line. It’s sad but true. On the flip side, because Independent Telecom Agents are commission only and residual based, earning a small percentage of the monthly bill, it takes them, in many cases, up to 24 months to get paid what the direct representative will get paid in month number one after the sale. The entire motivation for someone even becoming an Independent Telecom Agent is to build a book of business of happy customers that don’t have to find someone new every couple of years to deal with. This relationship only makes sense for the agent if you stay with them for over 24 months, so they have EVERY motivation to assist you in solving any service issues that you may ever have. A good Independent Telecom Agent isn’t just another business associate; they become part of your team. 7. They don’t have a quota to make One of the biggest issues I have with local RBOC/ILEC, is that if you call in to the call center to order new service, you will only be told about what THEY want to sell you. NOT what is best for you. Everyone LOVES to sell bundles in telecom, but let me ask you this. Why do you need Centrex calling features or voice mail on your alarm or elevator lines? Do you need call transfer or remote access to call forwarding on every line in your hunt group and on your fax lines? Do you have mysterious items in the back of your bill for web hosting or other items you are afraid to disconnect in case you actually use it? When I call the ILEC/RBOC directly from the agent channel, I get offered different packages, and more attractive packages, than I get over the phone through the call center. It is very common for Independent Telecom Agents to uncover up to 10-20% of pure fluff on your bill during the auditing process. Why does this happen? Simple. The direct representatives you buy from have a quota to make and will often sell you what is good for them, not what is good for you. They are directed to sell what is profitable for the carrier they work for, and are paid accordingly based on their ability to do so. Top Independent Telecom Agents, almost without exception; do not carry quotas with any carriers. Because they do not carry quotas, you will not find them pushing you towards a solution that doesn’t feel quite right just to meet their numbers. Be frank and ask your Independent Telecom Agent if they carry quotas with the carriers proposed. If they do carry a quota, be sure to ask enough questions about the solution they are suggesting to make sure it is right for you. 8. Extra Incentives and Promotions The Telecom Industry is moving increasingly towards the Independent Agent Channel. In fact, last year, a local ATT/SBC agent manager said the Agent channel gained more business through their agent Winback program than they did their direct Winback program. Even they were shocked! There are several reasons for this. Independent Telecom Agents are typically more knowledgeable, better trained, set proper expectations with the clients, their clients tend to remain clients longer (since they were sold the right program), and it is more cost effective for the carriers to deal with Agents. They do not pay base salaries or benefits, in addition to commissions. Strangely enough, where I have seen this benefit the customer most, is in the form of special incentives and promotions offered only through the Agent Channel. It is not uncommon for agents to compete head to head with a direct representative for one of the carriers they are presenting. It is also not uncommon for the agent channel to have promotions or incentives that the direct representative has not been given for the customer, and the agent will typically win the customer because of that fact. If the direct representatives have promotions available, they are often compensated extra if they do not use them. Independent Telecom Agents will pull out any available promotions available in an effort to gain your business for the long haul, as they are typically not incented or penalized for use of promotions. 9. Same Pricing The exact same standard pricing is used in the Agent Channel and the direct channel. In spite of all of the additional knowledge you can tap into with Independent Agents, you [...]
