Is Bankruptcy Good Business? Lessons Learned From Donald Trump

Donald Trump has filed for bankruptcy four times. None of those times were personal. Recently, Trump stated via Twitter and other sources that corporate bankruptcy is a good business strategy. Is this really true? Here's a closer look at Trump's Chapter 11 past, and why it worked.

Atlantic City: a Good Lesson in Corporate Bankruptcy Back in its heyday, Atlantic City was the place to be. It was glitz and glam and a money-making machine (kind of like Las Vegas is today). Eventually Atlantic City fell due to time and other factors. In the early 1990s, Donald Trump wanted to reclaim the Atlantic City that once was by building a number of casinos and lavish hotels along the famed boardwalk.

Trump's first foray into reviving Atlantic City was a disaster. His 'Trump Taj Mahal' was financed largely by junk bonds (according Forbes.com), and the failure of the property to bring in revenue caused him to sell his Trump Shuttle Airline and Trump Princess Yacht. Since the investment that didn't pay off cost him around $900 million in person - not corporate - debt, this was an excellent lesson for Trump.

Declaring corporate bankruptcy for the first time helped him secure his personal fortune while also eliminating the debt from Trump Taj Mahal. After going through that bankruptcy, Trump then went on to declare Chapter 11 three more times. How did he get away with it, and is it a good strategy for every business owner?

Corporate Bankruptcy As Business Strategy Trump was recently quoted as stating, "... basically I've used the laws of the country to my advantage and to other people's advantage." What he means by that is that Chapter 11 can shelter a company from complete destruction. Under the umbrella of corporate bankruptcy, a company that's struggling (as all four of Trump's Atlantic City ventures have) can restructure without the pressure of liquidating assets and making creditors unhappy.

It's a tactic that Trump has made popular largely because of his big persona and brand name, but it's not a strategy that he enjoys and owns alone. Numerous companies have gone through corporate bankruptcy for the same reason - because it's much better than losing money on a sinking ship. Allowing a company to restructure under the Chapter 11 clause will bring in more money than liquidating that company's assets, and this is what most creditors want to see.

But can this strategy work for companies that are much smaller in size? Does declaring corporate bankruptcy work for a mom and pop shop? Here's where it gets sticky.

Applying Trump's Strategy to Your Business First, your business has to be registered as a corporation that is separate from your personal name and life (this should really be the first step to opening any business, long before you consider Chapter 11). Once that's done, you may be a good candidate for corporate bankruptcy if your business is not doing well and you want to restructure. Since a Chapter 11 filing is completely separate from personal bankruptcy, your personal assets will not usually be impacted by this decision.

However, there are a lot of different factors that come into play when deciding on Chapter 11. What worked for Trump many times might not work for your company without the right guidance. In some cases, Chapter 11 might not mean that a company owner has zero liability. In other cases, there are better alternatives to keeping a company afloat. On the other hand, Chapter 11 could be part of an early business plan, but there are various details included in that strategy that must be worked out with an attorney prior to any kind of filing.

Declaring Bankruptcy Steps What about for individuals? Bankruptcy for individuals can be viewed as a financial strategy. In many ways, bankruptcy is financial planning when you strip down the details - but, it's important to have a competent bankruptcy lawyer on your side in order to tie up all of those loose ends.

Trump's larger than life character is hard to ignore, and so are his various corporate bankruptcy filings. Every new business owner should have a bankruptcy attorney on speed-dial whenever they are making big financial decisions so that they thoroughly understand the financial implications to the business and themselves and their families.

Is Bankruptcy Different From State to State?

For individuals facing difficult financial circumstances, bankruptcy is a common solution. However, before moving ahead, it's important to understand more clearly what it entails and what it means for you. One of the most common questions about bankruptcy is whether it is different from state to state, or whether the same laws, regulations and stipulations apply everywhere.

This is actually a two-part answer. First, the overall, basic tenants of filing bankruptcy and its different chapters and classifications is handled by federal law. That means that the actual laws which govern bankruptcy are the same everywhere.

However, from there, state laws then have an impact, largely and most importantly in the area of the types of exemptions that you are eligible for.

Exemptions are specific types of property that you are able to retain. In most cases, individuals will keep most or all of their property.

One of the best examples of the differences between bankruptcy in Maryland, DC and Virginia, for instance, is the homestead exemption. In Maryland, it's currently set at $22,975, while in Virginia, it's a meager $5,000, although it can be doubled for married couples. In the case of the District of Columbia, it's unlimited. Clearly, things are handled quite differently from one local to the next which has a huge bearing on you, your finances and your property.

Additional factors which may change from state to state include whether or not married couples get to double their exemptions, and whether or not there is a wildcard exemption, and to what to degree. A wildcard exemption, for instance, provides for a specific value of additional property not exempted elsewhere to be applied.

States also control whether or not they allow individuals to use the federal bankruptcy exemptions in place of their own state's exemptions. They do not have to do this. For instance, in the state of Maryland, generally you are not allowed to use the federal bankruptcy exemption and must use the state's.

It's important to work with an attorney who is familiar with your own state's bankruptcy laws and exemptions, and how they apply to your circumstances. Additionally, if you have recently moved, it's essential to know how that affects bankruptcy in your state. Always consult with an experienced attorney in your local area who can guide you through the process, answer all of your questions about bankruptcy in your state, and ensure you're making the right decisions.

B2B Sales and Maximizing Your Revenue Stream

As sales reps most of us focus all our time on mastering our product and our craft of selling, leaving us with a single form of income. Sales being time consuming in itself leaves little or no time for side jobs and business ventures. After reading numerous articles and books on successful sales reps I noticed one thing they all had in common. Relationships with other B2B sales reps! Teaming up with sales reps who provide alternative solutions is a proven way to increase revenue while remaining loyal to your current employer. In B2B sales our clients are often faced with obstacles and as a sales rep it's our job to find a solution. While we may not have the solution to help our clients we are always willing to find one. Relationships with other reps creates a wider solution base for customers who don't fall under your industry umbrella.

For example: A marketing sales rep stops into their client's business for a routine visit. The client expresses that with the new marketing campaign they are busier than ever and find that their software is running slower due to the increase in volume. The marketing rep doesn't provide software but mentions they work with a rep who sells software solutions and that they will have them stop by. The software solutions rep offers a 50/50 commission split with the referral source. Both reps win.

Referrals can be a great way to make additional income and do virtually 0 work. Once the client is referred to the other rep it is now that reps job to solve the problem and close the deal. The concept of B2B sales referrals can work for virtually any industry. Maybe your client needs money? Interior remodeling? Printers? You have a loan broker, contractor, and a tech rep.

Stronger leads are generated from referrals. Ten sales reps can walk in a business selling the same product you sell but because the client trusts the person who referred you they will overlook the others. The other sales reps don't know John who helped install their security system. Because they trust John they trust you.

Networking events, lunches, meetups are great ways to meet prospective referrals. Insurance, Finance, Construction, Auto, Law, Medical, Software, Equipment are some sales related industries that provide services that businesses need. With a bit of time and networking a referral pipeline can be built in a few months creating a secondary revenue stream.

Believe in Your Business Potential, Then Make It Happen

If you are convinced that you have the ability to run a successful business, you eventually will find a way to make it happen, even if you are not business savvy right from the start.

An Entrepreneurial Spirit and Mind

When you love the field you are involved in, you have a spirit thirsty for knowledge and recognition. You see yourself in 5, 10, or 20 years from now, and dream about your achievements and the goals you will have realized. Daydreaming is an important ingredient for fulfilling your business potential, but it is not enough. You also need an entrepreneurial mind that allows you to discipline yourself and focus your efforts on growing your business day by day. This means that you need to develop a realistic business plan which should not be static, but modifiable according to the circumstances that may arise. You can develop an optimal business plan when you possess 3 main types of skills:

• Technical skills, which refer to your field of expertise. When you set out to establish a business, it is given that you have honed your craft by spending years on practicing; you are proud to proclaim yourself a specialist, or at least a talented individual.
• Managerial skills, namely the ability to develop systematic processes for running your business and the know-how of growing it.
• Entrepreneurial skills, which are connected with the ability to be a master of difficult situations, to identify your end goals and the way you can reach them, and the ability to make future projections.

A Varied Skill Set

This varied skill set is what maximizes your business potential. You may not possess managerial and entrepreneurial from the very beginning. However, with constant practice and learning, you will be able to gradually gain control over the necessary business procedures; you will become more effective in reaching clients and dealing with finances and individuals. You will also improve your creativity and productivity. Your business achievements are part of a journey and each day you take essential steps along the way.

In the end, it's the combination of all the above factors, working in harmony with your innate magnificence, that will contribute greatly to your success. Just don't make the mistake to count only on the technical skills you already possess. If your aspiration is to become a successful businesswoman, you need to divide your energies between these 3 skill types that thrive and take shape from the belief you have in your potential.

Why Should You Bank Online With Your Credit Union?

The Internet has changed the way everyone lives and communicates. But it's so much more than keeping in touch with your family and friends. It can also be used to simplify your financial life. It is a welcome change from the monotony of balancing your checkbook and correcting those antiquated handwritten ledger pages. With online banking at your fingertips it gives even the most dyed-in-the-wool paper trail junkie the opportunity to abandon ship and embrace the digital age and utilize online banking.

Banking online isn't a new phenomenon and likely the majority of us already do it in one way or another. If you haven't yet made the transition to online banking and are still searching for more information about the benefits, I've put together a list of reasons why you should consider using the Internet to manage your finances.

• Bank at your convenience by managing your accounts on your schedule, 24/7. The only thing you need is your computer, tablet or a smartphone with Internet access.
• Everyone has experienced his or her financial institution making an error and it's not always in your favor. Or, I'm sure you have recorded a check incorrectly allowing the payment to fall through the cracks. The beauty of online banking is it allows you to monitor your account balance and pending transactions in realtime. And, since every transaction is recorded, it is possible to go back months to make sure every transaction has been recorded correctly.
• Have you ever been late with a bill or has a payment gotten lost in the mail? Paying your bills online is simple, fast and very secure. Just check with your credit union and set up online bill pay.
• It's no longer necessary to wait for your paycheck to land on your desk. Just arrange for direct deposit online so you have immediate access to your money. It may be exciting to see that check up close and personal but the time you save waiting in line at the bank to make a deposit will make up for it.
• Do you have people in your life, like kids in college, that need a cash infusion right now? Online money transfers make it easy to send funds wherever they need to go - fast and easy and most of the time free. And, if you have multiple accounts, online transfers give you the convenience of moving funds as needed.
• Bank-on-the-go with online banking. Make a deposit, transfer funds or even deposit a check while you are waiting in line at the grocery store.
• Go paperless with eStatements. Save time. Save money. Save a tree! Environmentally conscious and security-minded people are choosing to receive eStatements in place of traditional paper statements that can be accessed within their personal online banking from anywhere, anytime.
• MoneyDeskTop by MX is designed to put a member's data on center stage, molding it into a cohesive, intelligible and interactive visualization. MX provides access to a personal financial management software program whereby online banking becomes a "hub" of financial activity. Users aggregate accounts from any financial institution allowing members to track spending, create budgets and manage debt.
• Do you want to have a check-free life? With online banking it's easy to pay people and get paid easier faster and cheaper than using checks.
• Be assured that your personal information is protected with online banking. Credit Unions typically use highly sophisticated encryption devices to ensure their members privacy and safety.
• Additionally, many credit unions allow their members to apply for accounts, order checks, stop payments, apply for loans and even communicate with them online. Consider all the benefits of having an online relationship with your credit union.

Moving your accounts online definitely won't repair all your financial woes, and paying your bills by check or online won't ever be something we look forward to. But, if you want to make your financial life easier and smarter, online banking is definitely the way to go. If you aren't already using online banking, what are you waiting for ?