How To Reduce Banking Fees

Nobody likes to pay banking fees, but if you aren’t active in trying to reduce them, you are probably paying more in fees than you need to be. One of the most important actions to take in order to reduce the banking fees is to figure out exactly how you use your bank. Consider what your average balance will be and how low the balance may dip. Also consider the type of transactions you make and what types of services you need. Once you have a better understanding of how you utilize the bank, you are in the position to get the most out of it while avoiding fees for services you don’t need or use.

Probably the best move you can make is to try and qualify as a member of a credit union. Credit unions are not for profit organizations meaning they don’t have to worry about making a profit. The qualifying factors to join a credit union vary from institution to institution, so you will need to check with each. The good news is that there are a large number of credit unions associated with a wide variety of organizations. Qualifying for inclusion has been broadened a great deal over the years, so it is much easier to find a way to qualify.

Since credit unions are there for their members and not out to make a profit, they are much more likely to offer completely free checking or free checking with a small minimum balance. In most cases, they also charge lower banking fees and their interest rates on accounts are higher. The one big drawback is that they tend to have fewer branches and automatic teller machines (ATMs) than major bank networks which can be costly if you are an ATM addict. You can begin your search to locate a credit union near you at the National Credit Union Administration: []

If a credit union isn’t a possibility, then you need to take a look at the different types of banks. While the major banks will have a better distribution of ATMs and a greater variety of services, their fees can be as much as 50% higher than those of local banks. It is also worthwhile investigating Internet banks since their fees still tend to be lower than those of major banks.

Once an appropriate bank has been chosen, reducing the standard fees they charge is an important. Although there are a wide variety of checking accounts offered, most banks will offer at least two typical checking account alternatives. A basic checking account will have a lower minimum balance requirement, but it will usually have restrictions on the number of no cost transactions you are able to make each month. A premium account will usually offer interest and allow for more no cost transactions, but will require a larger minimum balance to avoid monthly fees. Not meeting the requirements of either of these can be quite costly, so it pays to chose the checking account style that best fits your use.

Although an interest earning checking account seems like the obvious choice to make, there are a variety of situations where you’re better off choosing a no interest checking account. If your account balance fluctuates quite a bit so that you are likely to go under the minimum balance required for the account even a few times during the year, you are likely to pay more in fees than you will ever earn in interest. In addition, checking account interest rates are some of the lowest, so choosing a checking account with no interest and a low minimum balance can make sense if you can put the difference into a higher yielding account.

Many people have several bank accounts at different institutions. It sometimes make sense to consolidate them at one bank. Consolidating your banking to one bank can give you more leverage in negotiating fee reductions and allow you to be more proactive in getting the best deals available. If you keep several different accounts at a bank, some banks will take into consideration the total balance of all your accounts at the bank. Although you may not have the minimum requirement in your checking account to earn interest, if you are also keeping a large deposit in a CD account that more than covers the checking minimum, the bank may be willing to count the balance of the combination of accounts as meeting the minimum requirement.

Another option that can give you leverage when negotiating on checking account fees is to have your paycheck direct deposited. Although every bank has its own set of rules, most will waive the checking account monthly fees if you direct deposit your paycheck. Don’t, however, assume they will automatically give it to you. Chances are you will have to politely ask before they offer you this service.

A further possibility in getting free checking is to invest in the bank. Although this doesn’t work with the larger banks, some small to medium sized banks have programs that award free checking and other special offers to investors. All you need to do is purchase a single share of stock to qualify.

The First Time Business Buyer – Using a Leverage Buyout

Business Buyers come in all sizes and shapes. There can corporate buyers, individual buyers, partner buyers, management buyers and most commonly first time buyers. First time buyers don’t usually know what kind of business they are looking for nor how to go about the process of finding, evaluating, negotiating and closing a purchase of a business.

Assuming the buyer knows himself and knows what kind of career and salary he is looking for, an efficient determination of the type of business he should target can be a quick decision. But it isn’t as simple as picking a storefront, a gas station or a restaurant. True entrepreneurs that can handle long days and constant micro-management may well be suited to the smallest of small businesses to buy.

But a major segment of business buyers cannot see themselves running local main street businesses. I sure couldn’t when I started out buying businesses. So what is it we are looking for in a business?

The next level up from main street is what I call a “real” business or one with enough staff and sales to take care of itself should any one employee leave or otherwise become unavailable. In effect, can the business “run itself” without the owner being involved? If the answer is yes then it is not only a real business but it can be classified other ways, such as an investment, or absentee business, or even my favorite term, leveraged buyout or LBO.

An LBO is simply a buyout that uses financing of any sort based on the strength of the balance sheet and asset base. It can include one form of financing or many, and use lenders, investors and the seller. This puts many main street and service businesses out of that category as they have no strength in their balance sheets. But if a business can be bought using an LBO structure then this by itself would qualify the business as a viable candidate for most small business buyers to consider. Indeed it may be easier for the business buyer to complete and LBO on a slightly larger company than try to scrape up money for a smaller one without the benefit of any financing.

To provide some real world examples on this framework, I would establish a reasonable sales and profit range of a typical LBO candidate that would be a level up from main street but well underneath the radar of larger buyers and private equity. This range could be in the $2 Million plus in sales and $250,000 plus in profits range which is arguable the minimum size of a leveraged buyout.

This lowest range includes the largest universe of businesses to buy without dipping into a business size which is too small to allow the buyer to breathe or too weak to be financed. The perfect LBO candidate will have enough assets retained in the business to approximately cover the down payment for the purchase. This is when the buyer will know the deal is the right size.

At the other end of the spectrum, companies with well over $1.0 Million if profits will be typically out of reach for the first time buyer since the deal will likely require a lot of invested capital. There is, however, a sweet spot at the lower end where small buyers can do some quick math and determine that the capital needed for the deal won’t break their budget.

As first time buyers go through a buyout or two the deal size can easily change. They may well be able to get to the next level and be able to structure larger buyouts and raise substantial amounts of capital to complete subsequent deals.

Rockwell Marsh has been a banker and private equity partner, is the CEO of The Small Business Buyer at, Managing Partner of Signal Hill Holdings, LLC and teaches how to do leveraged buyouts on small companies. He has purchased and financed numerous acquisition transactions over a 25 year period. For more information on how to buy small businesses using leveraged buyouts click here for the How To Buy A Business Free Course.

The Role of Internet in Business

The internet plays a major role in every aspect of our modern life. Internet technologies play a major role in business. As a business owner, knowing the role of internet in business will help you take advantage of the powerful opportunities it offers to grow you business and make operations more effective.

Here are different ways in which the internet has contributed to the success and growth of businesses.

Communication: The internet makes communication fast and cost efficient. Businesses use internet technologies such as Skype internet and video calls, email and video conferencing to make communication virtually instant.

Growth: The internet plays a big role in the growth of businesses. It gives businesses an opportunity to reach a wider global audience. Promoting through the internet is also a way to increase sales and reach the desired growth level. Business can also expand by having an online division.

Marketing: One of the role of internet in business involves marketing and advertising. Most businesses are taking advantage of the internet to market their products and services to a global audience. The most notable internet technologies here include search engines such as Google.

Networking and Recruiting: Social networking websites play a role in business networking by connecting like-minded professionals. Through the internet, people have found business partners and great employees.

Outsourcing services:The internet has helped cut costs by outsourcing services to countries where it is cheaper to provide these services. Apart from the cost reduction through the outsourcing role of internet in business, outsourcing enables businesses to concentrate on their core services and become more efficient.

Online Shopping Role: One role of internet in business is the birth of ecommerce websites and online payment solutions that allow people to shop online from the comfort of their own homes.

New Opportunities: The internet has opened up new business opportunities and giving rise to a group of successful online business owners. This is a powerful role as anyone can now start an online business.

The role of internet in business cannot be overstated. New businesses are taking advantage of the powerful role the internet plays in business to grow and succeed at a faster rate than was previously possible. Traditional businesses are also not being left behind as they are creating online divisions. A business owner can only ignore the role the internet plays in business at the peril of his or her business.

If you are seriously looking to legitimately make money online, I strongly urge you to click here and discover what happens when education meets opportunity.