Special Report - 8 Reasons Why Direct Selling is BOOMING!

Wednesday, June 20, 2012 3 comments
It's easy to see that in today's economy that things have changed. What's even more apparent, things well never be the same as they once were. In no time in history has things ever been the way they were before. With that of knowledge, people need to reconsider the direct selling industry. It's an industry that has been around for over 100 years and is still a valid option to earn additional income. This report discusses 8 specific reason why the industry is booming, even in this "down economy".

1. Relationship and Social Interaction: Network marketing is a business built on relationships. When you find a product or service about which you're passionate, it's easy to share the good news with friends and family.

2. Financial Security and Control: Job security is a flat out myth these days. Building your own business allows you to control your financial future. Whether you're using your business to create a savings cushion, to make ends meet or to replace a corporate income, direct selling gives you the ability to take control.

3. Minimal Risk, Maximum Return: A small initial investment and low risk generate high return and high earning potential, with potential being the key word. You have to be willing to put forth the effort. The more efficient the effort, the more money produced. And the most companies offer training and support in order to help you make the most of the opportunity.

4. No Boundaries, No Limits: There are no boundaries to direct selling; no sales territories or restrictions. Network marketing allows independent consultants to set their own goals, dream big and create the life they want with no restrictions.

5. Tax Benefits: U.S. tax laws give the home-based businessperson the ability to enjoy the same kind of tax-deferred savings and benefits as corporate employees. Tax benefits might not be the most exciting aspect of owning your own home-based business, but the allowable deductions can make a real difference in what your family pays in taxes each year. (Please consult with you tax preparer to get all your State and Federal regulations).

6. Freedom and Flexibility: Freedom and flexibility are often the most appealing aspect of working from home. The freedom to choose when and how much to work is something traditional employment does not offer.

7. Equal Opportunity: Direct selling is an industry in which women earn dollar for dollar what men earn. Direct selling provides an equal opportunity for earnings and personal growth to everyone, regardless of education, previous experience, age, ethnicity or financial status.

8. Recognition: When was the last time someone cheered when you walked in the door at work? Did you husband or wife even notice that the dishes were done or the laundry was folded? Recognition is something that's practically nonexistent in an adult's day-to-day life... but not if you're part of an industry that excels at praising its work force. Being recognized for efforts and achievements is an integral part of the direct selling experience.

These 8 reasons are very simple really. It's the same reasons why the industry as a whole is older than 100 years old. The difference today is, more and more people actually have to look outside the box to earn additional income. No longer are the days where a family has the certainty the bread winner will have a job tomorrow. No longer are the days where a family can rely on one income.
The direct selling industry offers the opportunity for part time effort to equate to part time income. The difference is, that effort will continue to pay you for years to come.

Times have changed. The industry has changed from decades ago. No longer is it necessary to bug your friends, family and co-workers. You longer have to hold meetings in your house at night and carry large inventory in your garage. There are even professional associations that help govern the direct selling industry. There are laws in place in help product consumers from fraudulent companies.

Maybe it's time you think the direct selling industry.

India Debt Collection Business

Tuesday, June 19, 2012 5 comments
Until the emergence of debt collection business, debt collection in India, was never treated as a specialized job and was always treated as one of the jobs that legal departments of the banks and financial institutions were required to undertake. A typical legal department of an organization would approach the collection job strictly as a legal issue rather than as a revenue collection measure. Litigation would be the only tool used for recoveries and no other tool was either known or used by the industry. Litigation as a recovery measure always had its own limitations due to long and winding court procedures the Indian legal system is always criticized for. On the other hand, foreign banking firms introduced the concept of specialized debt collection services. Debt collection services became one of the many services that began to be outsourced to specialized agencies. The collection business had a very humble beginning and it barely qualified as a specialized service.

However over a period of time with the emergence of India as a global outsourcing destination the domestic businesses also adopted the outsourcing as an efficient business tool. With the result today, the third-party debt collection industry plays an important role in the Indian economy. The industry employs hundreds of thousands of Indians as collection professionals, who are servicing several industries ranging from banks, to telecom service providers to insurance companies. Typically, only small recoveries arising from periodic billing defaults by the customers are outsourced to the collection agencies. Not only the collection business has become a direct source of employment to thousands but its contribution to the economy is more pronounced because it helps infuse money back in the economy that otherwise would have remained uncollected. The economic benefits of third-party debt collection are significant. Citibank is the pioneer in introducing third party collection techniques in India.

The debt collection industry in India also has grown sharply this year as higher borrowing costs; rising inflation and the general slowdown in the economy force more companies and individuals into difficulties. Underlying debt has gone through the roof and lenders and organizations increasingly want to move any bad debt off their books. Whether it is a high street bank, a credit card lender or a mobile phone company, growing numbers are turning to professional debt collectors in a more difficult environment.

The debt collection industry in India is growing at a faster pace and is surely poised for growth. The credit card outstanding have shot up by a whopping 87% at USD 6114 Million during this year, from USD 2844 Million in the period year ago. The Reserve Bank of India (RBI) which regulates the banking industry in the country encourages banks to shift bad loans off their books more quickly because they will be required to hold more capital against risky assets that may default.

COLLECTION INDUSTRY - UNREGULATED SCENARIO

The collection business has its own inherent shortcomings due to unregulated and primitive nature of this business in this country. The persons employed in the industry are untrained both in soft skills and legal skills. Being unregulated, the procedures are not standardized and there are no industry specific checks and balances. Still litigation is used as the last resort tool for recoveries. However the industry has been accused of manipulating the legal system to their advantage by using courts as their agents of recovery. It is seen that big corporations with large volumes of recoveries have unwritten understanding with the local courts at the lowest level. With the patronage of minuscule minority of pliable judges simple civil defaults are registered as criminal cases thus pressurizing the debtors into paying the dues. Slow and long civil recovery court process has no takers in this age of instant results where revenue targets are the most sacrosanct. Under such strict and cut throat environment, there is pressure on the banks to keep their account books healthy therefore such aggressive and extra-legal methods are employed for quick recoveries.

GOVERNMENT / RBI INTERVENTION

Debt collectors in the past had a lot of leeway and it wasn't uncommon for collectors to embarrass, harass or humiliate debtors by adopting extra-legal measures. In the absence of any regulatory regime the courts had to step in by laying down guidelines for the industry to follow. After the intervention of judiciary, the RBI woke up to the need of regulating the unruly collection agencies and laid down its own guidelines for the banking industry to follow.

The guidelines prescribed by RBI are enforced against the banks that have contractually employed collection agencies. The banks in turn via their contracts with the collection agencies ensure that the RBI guidelines are followed. Now, under the RBI guidelines it is illegal to threaten violence or cause harm to debtor, use obscene language, or repeatedly use the phone to harass debtors. In addition, collection agents cannot seize or garnish a consumer's property or wages without recourse to court procedure.

The following are few of the core underpinnings of the collection process. These are the norms formalized by the top bank in India - RBI.

1. DSAs/DMAs/Recovery agents to get minimum 100 hours of training.

2. Recovery agents should call borrowers only from telephone numbers notified to the borrower.

3. Each bank should have a mechanism whereby borrowers' grievances with regard to the recovery process can be addressed.

4. Banks are advised to ensure that contracts with recovery agents do not
induce adoption of uncivilized, unlawful and questionable behavior or recovery process.

5. Banks are required to strictly abide by the codes pertaining to collection of dues.

RBI in the draft guidelines issued for banks engaging recovery agents, has asked banks to inform borrowers the details of recovery agents engaged for the purpose while forwarding default cases to the recovery agents.

The Reserve Bank of India has also considered imposing a temporary ban (or even a permanent ban in case of persistent abusive practices) for engaging recovery agents on those banks where penalties have been imposed by a High Court/Supreme Court or against its directors/officers with regard to the abusive practices followed by their recovery agents. An operational circular in this regard has been issued in November 15, 2007.

Other Laws

Still the non banking debts collection business is outside the purview of any regulator. There are no licenses or registrations to be obtained from any regulator to pursue collection business in India. The extant guidelines applicable to banking industry are found inadequate as they address only the problem of debtors' harassment and the guidelines do not regulate the industry as such. The Government is well aware of the need of having a specialized legal mechanism for recovery of institutional debts which has become a huge problem for the entire banking industry.

Every bank is grappling with the non-paying accounts, known as Non Performing Accounts (NPA) in the Indian banking parlance. The problem has taken enormous proportion and threatened the economy. Creation of Debt Recovery Tribunals in the year 1993 was a step in the direction of facilitating fast recoveries by the banks . The intention behind creation of such Tribunal was to ensure that banking industry was provided with its own recovery mechanism that was part of the legal system but at the same time exclusive to the banking industry. Bank debts above USD 22,727 could be recovered through the Tribunals.

However, over a period of time it was realized that this new mechanism did not yield the desired result since the recoveries were still slow and due to shear volume of work, the Tribunal became like any other court. The whole objective of having a fast track and efficient recovery mechanism was therefore defeated. Bank debts still remained a major problem to be solved since it affected the entire economy of the country. The Government felt the need of having a mechanism that was minimally dependent on the courts for effecting recoveries since the legal system could not be reformed overnight. Therefore instead of reforming the court procedure the government did some clever thinking and came up with a legislation that minimized the intervention of court and empowered the banks with special powers using which the recoveries could be affected.

The government thus came up with a new law Scrutinization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) where under the banks are allowed to liquidate security given by the borrower for recovery of their dues. This law also paved the way for creation of asset reconstruction companies that take over the security interest of the debtors. These agencies are thus another form of debt collection agencies that have been institutionalized.

The need to share credit information among the banking industry was also felt in order for the industry to benefit from each other. Thus Credit Information Companies (Regulation) Act was enacted in the year 2005.

INDIAN LEGAL SYSTEM AND COLLECTION PROCESSES

The Indian legal system is absolutely fair and assures justice to the party involved. There are remedies available under the law to collect the debt, if the debtor does not agree to pay under normal circumstances. The creditor may file a suit for his recovery. Debts based on written contracts could be recovered by following fast track procedure. If the debtor is a company, creditor / his lawyers may apply in the 'Company Court' for winding up of the company due to non-payment of substantial amount of debt. Summary trial is another way. The process may take time-1 to 2 years. Evidences are recorded appropriately and produced in the court of law, whenever required. There is also the arrangement of appeal to be filed at later stage.
US OUTSOURCING SCENARIO

India has attracted many technology jobs in recent years from Western nations, particularly the United States. Now, it is on its way to becoming a hub in another offshore outsourcing area - debt collection. According to the industry report, units of General Electric, Citigroup, HSBC Holdings and American Express have used their India-based staff to pursue credit card debt and mortgage payment by calling defaulters.

US debt collection agencies are the newest to start outsourcing their work to India and are satisfied with the results produced by the polite but persistent Indian experts. After insurance claims and credit card sales, debt collection is a growing business for outsourcing companies at a time of downturn in the US economy when consumers struggle to pay for their purchases.

Debt collection is a vital and growing component of US economy. There is more than $2.5 trillion in outstanding consumer debt. As a result, the third-party collection industry makes more than one billion contacts with consumers each year. Recently this year, more than $39.3 billion in debt was returned to creditors.

Indians have the advantage of lower salaries and other expenses, which cut drastically costs of collecting debts. Debt collectors in India cost as little as one-quarter the price of their US and European counterparts and are often better at the job. Many such Indian firms run 24-hour services. Indian debt-collection companies comply with strict regulations on operations in the American and / or European markets.
SUMMARY

India has a long way to go in establishing a mature collection services industry. The collection business needs to be regulated and empowered with legal powers to become an effective tool. Already, there is a realization in the country that court dependent recovery is an inefficient way of way of debt collection. Creation of Assets Reconstruction and Securitization Companies under the SARFARESI Act is a step in the right direction of recognizing debt collection as an independent and specialized business function. While some progress is made for the bank debts but still for a large volume of unrealized non bank debt there are no professionally managed and regulated third party collection service providers. Non bank debts are largely unsecured that makes it even more difficult to realize. No big corporations and business houses are interested in acting as collection agents without there being an attraction of valuable security asset. Lawyers can fill this gap by providing collection services for non bank debts. Indian law does not permit contingency fee that makes the business less lucrative. India is therefore ready to benefit from foreign experience, expertise and ideas to create an efficient debt collection industry of its own at par with global status. This need is more felt now by India due to its global ambitions wherein India must adopt globally recognized practices and models. Transnational businesses need a uniform operating system for seamless transactions. Efficient debt collection industry will only instill confidence in companies doing business with Indian companies. Collection professionals have this challenge facing them of creating an efficient system that reduces people's dependence on court supported recoveries.

8 Ways To Take Your Small Business To The Next Level

Sunday, June 10, 2012 1 comments
Now that you have built a successful business, you have an established customer base and you are fairly well known in your geographical area, your industry or both, what do you do to stay ahead of your competition? You might want to consider the following tips to help you to expand your business and take it to the next level.

The following are 8 tips to help you increase the size of your business and take it to the next level.

1. Open another location.

Either open another location or move into an office space if you are currently working from a home office. This may not be the best choice for expansion; however, it is the first thing business owners often do. If you are thinking of doing this, be sure you are maintaining a consistent bottom-line profit and that you have shown steady growth over the past few years. You also want to ensure your infrastructure, staff and your systems can accommodate the growth. Finally, research the demand of taking this next step and how it will affect your decision.

2. Expand your product or service lines to compliment the ones you currently have.

This will allow you to offer more selection and it makes your products and services more appealing to your customer base. However, first, you need to conduct market research to determine which products and/or services are in demand, which would be profitable for you, and which would be affordable to your customers.

3. Find ways to increase repeat business for your current customers.

This is a lot less expensive than locating new customers. Initiate reorder cards that you can send out to remind customers to reorder products and/or services when you want them to, not just when they remember to do so. Contact them more often with a monthly or bi-monthly newsletter via email or mail to ensure the customer is keeping you on the top of their minds for additional sales.

Consider developing volume sales discounts, monthly rates, or other discounts to entice them to purchase more at a time or for a longer period of time than instead of just a single sale. If you can, try to get your customer to contract with your business, if your business is set up to do so.

4. Update your Website or develop a new one if you do not have one.

Be sure to add monthly specials, discounts and/or promotions on your site - especially on the home page to attract attention. Ensure individuals/businesses visiting your site sign up in order to qualify to win a drawing or receive a discount, so that you can add them to your database. You can also add products and/or services to sell online. If done correctly, this adds sales and reduces the time necessary to locate these sales. These are typically bonus sales above and beyond anything you would normally sell since they are from a different 'group' of people.

5. Target other markets.

Only do this if you have already saturated your primary target market. For example, if you sell to teens, consider beginning marketing your product and/or service to college students.

6. Turn your business into a franchise or franchise opportunity.

You will need to ensure you have developed all your operating systems needed in order to make your business a smooth-running machine first, however. You can network within the franchise industry.

7. Add a partner or merge with another existing complimentary business.

With the right agreement and business plan, taking this step can be beneficial to both parties involved. Be sure to hire a reputable attorney to review all the paperwork and look out for your best interests.

8. Go global.

Find alternate ways to market yourself globally if you do not already do so. Consider ways to tweak your business in order to offer your business and/or services to consumers outside your current area. Have you considered teleseminars, Webinars, shopping cart Websites, or search engines?