Finance for SME’s

Many people complain that banks don’t support Small and Medium Sized Enterprises. However don’t expect politicians, economists and bankers to come up with the solution to problems besetting SME finance.

Residential mortgages are cheap because the risks are relatively easily defined and standardised. Except when they were securitised into some bastard demonic child and sold off without any link to their underlying risk or value.

Each business owner would say her business is unique. Thankfully trade and receivables finance has grown and is “not your father’s factoring” anymore.

SME’s must seek out these smaller financiers whose skill and systems allow them to move faster and understand SME risk better. While receivables finance costs more than a residential property secured loan, that is because Australians will do almost anything to avoid losing their home. Therefore the risk to the financier is lower.

Dick Smith sold out the first time to Woolworths because he didn’t want to put his house on the line, again, to fund another round of expansion.
At some point every entrepreneur must resist putting the family home on the line for access to the cheapest funding. If your business can’t afford business finance then improve the business don’t take the cheap funds.

Waiting for any “pillar” of the economy to step into this space is a long shot.

Personally Controlled Electronic Health Record (PCEHR)

I want a Personally Controlled Electronic Health Record (PCEHR). That’s an electronic record of my current and historic health status, under my control and private to me and the health carer’s I select. Think of it as all your health records in one place in case you ever need it.

It turns out my family needs it. My medical records are scattered in the archives of various specialists and GP’s over the years. I used to believe doctors were the experts and they’ll let me know when I need something. Unfortunately, that means they know as much about me as they can assimilate from a quick scan of my file whenever I drop by. Being male, they don’t see me too often. I’m told I suffer from high cholesterol, but I don’t know the pattern of my tests over the years. Now I take some medicine to fix it, but it’s hardly an integrated, holistic and preventative care plan.

My mother is aging, my daughter has an undiagnosed chronic condition. In both cases we’ve left it to the experts to guide us. But as keepers of the medical records I’ve allowed doctors to cater to the lowest common denominator of health care.

So the first step is gathering all my records to one GP. Then I’ll want a copy of my records. While I’m at it I’ll get my family’s records done.

The federal Australian Government has funded NEHTA National E-Health Transition Authority to get this process going. Like most bureaucracies they seem to take forever to get something everyone is happy with. So we’re looking at 3 years to implement the “government’s e-health strategy”. I don’t want to wait that long.

What’s wrong with release and revise? Quick constant beta-releases. I understand privacy, interoperability, and transmission issues. But the basics of what a PCEHR should like and a standard to allow tools to be built shouldn’t take 3 years.

I’ll write more on this as the journey continues.

I’m almost tempted to launch a startup to deliver this stuff.

Trademark, Copyright and Intellectual Property

People get confused between copyright and trademarks. The area of law is called Intellectual Property (IP).

Copyright protects the expression of an idea. This includes spoken, written and audio-visual expressions. Hence books, movies, documentaries, photos, recordings, paintings, articles, drawings, poems, songs and music are all covered by copyright (subject to the creators jurisdiction).

Trademarks (and service marks) are a distinctive sign, logo, word,  phrase or indicator used to indicate a good or service comes from a specific individual, company or group as opposed to some other source. It is designed to give consumers confidence in the quality and reputation of a good or service.

Many people say “Monster cable” is copyrighted when they actually mean it’s trademarked.

Trademarks were invented to prevent unscrupulous merchants passing off an inferior tradesman’s work for a more reputable work. So master tradesmen would make their mark on the item they’d made indicating they had approved it’s quality and finish, much like a master painter signs his work.

Really good and expensive work attracts counterfeits. Wanna purchase a watch?

Trademarks don’t have to be registered, but it’s a good idea. Then other similar trademark holders can object and everyone does the intellectual property dance.

It is supposed to be nearly impossible to trademark something generic such as the word “Elite”, but large IP practices seem to get them registered. Often a registration is canceled  on appeal for being too generic or if found to be in broad use by many people.

If the name is a range identifier as opposed to the main brand, and it is not attempting to pass itself off as another brand, then trademark registration is either not worth defending or too generic. So Kogan is releasing the Elite range and Panasonic also has an Elite range. Nobody is going to think they come from the same company.

My preference  is brands, ranges and models be uniquely named as it makes searching for them so much easier.

Serving on Community Service Boards

Many business people give back by serving on community service boards. This is a great way for worthy organizations to gain from your enthusiasm, skills and talent. It also helps grow your network of advice and support people.

Board members of community service organizations have legal responsibilities just like for-profit corporate boards. If you want to be effective, learn the rules. For most service organizations the rules are laid out in the constitution and applies to formal board members or “committee” members. Too many people don’t look at this document until it’s too late. I’ve seen active Not-For-Profits that have not held an Annual General Meeting for 3 years because the board blindly followed what the previous guys did. But someone forgot to have an AGM.

Some constitutions are hard to read, in that case consider updating the constitution to plain English. The existing constitution should have provisions for making changes.

Take the time to familiarize yourself with the contents of the constitution.

I am advising a non-profit organization on a internal members dispute. That’s one advantage of my background in Alternative Dispute Resolution and consulting. Sadly it means I spend too much time with people who are in the middle of arguments. Getting the emotion and heat out of a dispute is the best way to win a satisfactory resolution. That outcome may be Win-Win, Win-Lose or even Lose with damage mitigation.

This nonprofit organization had to spill its board but encountered two problems. Firstly most board members relied on their Chairman to explain this board removal process outlined in the constitution. Not enough of them checked the details themselves. Secondly the process they followed was mostly right. Had they read the constitution, they could have quoted the clause under which they acted and worded their resolutions better. Now they’ve got a vocal and unhappy minority who are threatening legal action because of some unclear wording.