Tag Archives: business loan
By Charles H. Green
Technology advancements over the past 20 years have had a significant impact on busines and industry, which has led to major changes in output, costs, productivity, employment, marketing and connectivity among other business metrics. Small companies have often been on the leading edge of these changes because they are more nimble and will often realize faster improvements (and profits) by adapting sooner.
The National Small Business Association (NSBA) recently conducted their second survey of technology adoption and dependency among their members and posted some interesting results. Among their key findings was a marked increase in usage of laptops also, from 67 percent in 2010 to 84 percent in 2013.
An interesting tangential finding was the drop in the number of small-business owners who pay an outside firm to handle their information technology (IT), which they asserted was likely driven by two factors: the economic challenges small businesses have faced in the past few years; and improved IT platforms and the growing reliance on–and therefore need to understand—these technology tools and platforms.
Other results from the small companies surveyed:
41% use tablet devices (which were not available during the 2010 survey);
60% allow some employees to telecommute (an increase of over one-third);
50% don’t have broadband or fast-speed internet because it’s still not available;
27% still don’t use social media to promote themselves.
Why is technology a ‘finance issue’ that should concern business lenders? Because it represents a harbinger of the future horizon for the success of that business.
1. Adaptation of new technology signals better productivity is ahead at a cheaper price;
2. Smaller firms can compete more effectively when visable through the web and recognized in social media. Without breaking into these frontiers, that business will be lost to anyone trying to find it.
3. Mobility will be the most heavily-travelled portal through which future consumers conduct business.
Read more at NSBA.
By Charles H. Green
A review by the U.S. Government Accountability Office (GAO) found that U.S. Small Business Administration’s (SBA) Patriot Express loans, valued at $703 million, have a higher default rate than other loans under SBA’s other loan guarantee programs. The GAO report also said that losses for Patriot Express have exceeded its income.
“The Patriot Express program’s overall default rate was significantly higher for smaller loans, especially for loans below $25,000 (20 percent),” according to GAO. And it was revealed that one lender accounted for more than 64 percent of these smaller loans and experienced higher default rates than the remaining lenders.
From 2007 through 2012, losses in the Patriot Express program exceeded income by $31.1 million (not accounting for future fee revenues or funds recovered from loans in default). Patriot Express has continually operated in the red.
In 2010, SBA extended the Patriot Express pilot through 2013 to allow time to evaluate the effect of the program. To date, SBA has not evaluated the program or established a plan of what it intends to do to evaluate it. SBA officials reported to GAO that they “focused their resources on evaluating 7(a) loans because there are many more of them and, therefore, they pose a greater risk to SBA than Patriot Express loans.”
GAO also asserted that SBA’s internal controls over lenders may not provide reasonable assurance that Patriot Express loans are only made to eligible members of the military community and that only these members benefit from loan proceeds. This finding may lead to more direct consequences to participating lenders as this evaluation continues.
By Lyle Johnson
College is a time for education, inspiration and maybe a bit of partying. It’s also one of the prime times of your life to consider starting a business, as many students don’t have a great deal of financial responsibilities, either from parents footing the bill, or taking out loans. Sure, you’ll have to pay those loans back after you’re out of school.
At the same time, you don’t have the pressure and burden of finding a part-time job that can work around school hours to pay your bills. You’ll simply have time to create a business that might make you independently wealthy while you’re still studying. According to Small Biz Trends, the average amount of business financing given to new upstarts was $325,000. Avoid these financial pitfalls to set you on the right path to hitting it big, and make the best use of your financing.
Why Make a College Startup
Outside of the lessened responsibilities that typically come with being a college student, the real world experience you gain by starting a business is invaluable. If you’re worried about getting stuck in the need-experience-to-get-a-job, need-a-job-to-get-experience trap after graduating, running your own business can fill that gap. Even if you don’t make the next big company, you can at least get some supplemental income to start paying your student loans back early, or eat something other than ramen.
Financing Your Business With Personal Assets
While you might not have many personal assets as a college student, you will probably have to leverage your savings and any property to finance a new startup. It takes time to secure small business financing, especially as a student with few assets. Crowdsourced financing may help tap into your network to back a great idea. Small Business Administration loans and sites such as annuity.org may provide financing options that leverage other resources that may be available to you, which are some of the easier routes, as opposed to seeking out individual investors.
Create a Budget
You have to spend a lot of cash to get your business off the ground, especially if you’re dealing with physical inventory and locations. Create a strict business budget, and don’t be tempted to spend money on non-business expenses. Once you’re making a profit, you can indulge a bit, but not before you reach that point.
Once you have reached that magical point of getting out of the red with your business, the SBA recommends you pay yourself some sort of salary. That makes your business feel like a real, proper job, and it also gives you money separate from your business, so you don’t feel bad about spending it. It might take some time, even years, to get your business profitable, but every step of the way is valuable experience.
About the author: Lyle Johnson runs a small roofing business and studies marketing at his local community college. He writes about small business, marketing and how to leverage social media.
by Sara Miller
Many of us have that sure-fire business idea mulling in the back of our minds. That doesn’t make us entrepreneurs, however. Entrepreneurship demands action—one step after another, until your business is launched and thriving. Whether you’re just setting out on the journey toward entrepreneurship or well down the path, take the next step to make your dream a reality.
Stage 1 – You Have an Idea
Every good business starts with an idea. Maybe you want to launch a vegetarian taco truck or start a virtual personal assistant firm. Your next step is to develop a business plan that outlines your first three to five years of business. SBA.gov suggests the following outline for business plans:
• Executive summary – A quick snapshot of your business
• Company description – Who you are, who you serve and what you do
• Market analysis – Who your competitors are and what separates you from them
• Organization and management – What organizational structure best suits you
• Service or product – What you sell and what your product lifestyle is
• Marketing and sales – How will you market your business
• Funding request – Who will fund your business and how will you ask for money
• Projected finances – What do you hope to make per year
• Appendix – Additional information relevant to your business, such as licenses and permits
Stage 2 – You’ve Completed Your Business Plan, Now What?
Your next step is to work toward the achievable goals outlined in your business plan. Many young businesses need capital to invest in equipment and infrastructure. A business credit card can help you make these initial purchases at a time when your cash flow may be limited. According to the Better Business Bureau, a new business credit card can actually help you establish good credit and may even have a reward or loyalty component.
Stage 3 – You’re Hiring Your First Employee
That credit card and business plan helped fuel initial growth, and now you need to hire an employee to work toward launch. As DailyMuse.com notes, having an employee dedicated to reaching your goal can help you get there that much faster. The site suggests hiring as soon as you can afford to do so and investing in the potential of a passionate employee rather than choosing someone with demonstrated experience who may not be passionate about your business. If you have multiple stakeholders, have everyone on the team interview that person to ensure a strong cultural fit before hiring.
Stage 4 – You’re Ready to Launch
All your initial goals have been accomplished, and you’re ready to launch your business. Your next step is getting the word out about your products and services.
As a small business, you probably don’t have a marketing maven on hand. Take advantage of social media to connect with other local businesses in your field of expertise, find potential clients or customers and expand brand awareness. Marketing Land suggests that you pick a metric you’re interested in measuring—for example, customer service or brand awareness—and find ways to measure your marketing and social media outreach to see if you’re increasing your target metric. Track how quickly you gain Twitter followers or Facebook fans to see what tactics help expand your reach.
Stage 5 – Steps Toward Stability
After the initial buzz of a grand opening dies down, your business’ success will depend on regular patronage and stability. If you can’t imagine your business failing, taste this grain of salt: half of small business will fail within the first year, according to Smallbiztrends.com, and a staggering 95 percent will close shop within five years.
Ups and downs are inevitable. The businesses that survive struggles usual have a stable base of clients, customers and partners who help keep the lights on. As you embark on small business ownership, build relationships that result in continual business.
A tip: The little things make a difference. Remember your customers’ names, ask about their families and do the other things larger competitors can’t.
From first grade through graduate school, “B” was never in Sara’s vocabulary. In addition to being a perfectionist, she has always been fascinated by the anatomy of successful start ups.
A clean, accessible accounting system that accounts for every transaction is a requirement for every small business, especially when the company begins to realize increased daily sales.
Trying to keep track of every transaction manually with a paper system can be a nightmare, often leading to missed items and a backlog in processing the postings. Since you also need to know current cash flow and prepare for critical tax reporting and payments, how do you handle all of this efficiently and comprehensively? One way to simplify and make things easier could be going plastic as soon as your doors open.
With electronic payment so widespread, accepting “plastic” payment allows a company to process both credit and debit cards on most of the major networks. Doing so creates easy-to-manage records and paperwork for accounting purposes. Accepting credit/debit card payment also allows a business to be paid immediately rather than waiting for a large personal check to clear.
For small businesses, cash flow is critical. Receiving sales funds as quickly as possible helps a business owner manage his or her company finances on a more predictable basis, paying off vendors in a timely manner. With credit card payments, bounced checks and cash flow hiccups are eliminated. The business knows exactly when and what payment has arrived and can use those funds immediately.
Going plastic also allows a small business to integrate better with e-commerce. Most customers buying goods or services online use a credit card. Small businesses that accept such payments access wider markets, regardless of distance or even country, because the credit card processing companies manage the risk and movement of payments electronically. The customer enjoys risk-free purchasing and the small business enjoys a wider portfolio of customers not possible with cash or check payments.
For tax reporting purposes, most card processing services provide easy-to-download activity records that break out incoming and outgoing funds, the payer and payee, amounts, dates, and what the transaction covered. These activity logs are actual transaction records that are very useful as supporting documentation for tax reporting. So instead of chasing various receipts all over the place, a small business has all it needs on one clean report that can’t be easily disputed in an audit. This reporting format works well for both reporting sales tax as well as business income taxes. Further, the reporting is easily imported into major financial off-the-shelf software programs, producing even easier financial management benefits.
Finally, customers tend to spend more via a credit/debit card payment versus cash. Because the money isn’t due right away, customers find it easier to purchase higher cost items. That in turn means larger sales per transaction for small businesses, which is a good thing when every revenue dollar counts. Up-selling becomes easier too because customers are not concerned about cash in hand.
Using credit cards for your business is a valuable transaction tool and produces greater revenue as well as easier on-the-go financing and important tax records. Smart businesses take advantage of all opportunities, including available payment tools. Go plastic today!
About the author
Kristen Gramigna is Chief Marketing Officer for BluePay, a merchant services provider and also serves on its Board of Directors. She has more than 15 years experience in the bankcard industry in direct sales, sales management and marketing.
According to a survey conducted by American Airlines in 2011, nearly half of the small and medium-sized businesses (SMBs) that responded indicated that 10 to 24 percent of their annual budget is allocated for travel expenses — and nearly all indicated that they are actively controlling airline costs. If your small business falls into those categories, we have some cost-saving travel tips for you (courtesy of the U.S. Small Business Administration)!
Use technology wisely to save on airfare. This includes online tools like Skype, Webex and Face Time that can connect you with partners, customers and satellite offices at little to no cost. Consider equipping your field reps or employees working remotely with tablets, smartphones or laptops to make it easy to interact with them. As an added plus, you can use a camera-equipped device to inspect property, equipment or products at a supplier’s or customer’s location. For more on how tech tools can make virtual meetings a part of your business, read this.
Reap the benefits of the sharing economy. If you’re looking to save $$$ on expenses like car rentals and hotel rooms — and don’t mind trying some non-traditional options — check out group sharing websites like ZipCar and ZimRide for the former and Airbnb and CouchSharing for the latter.
Use loyalty programs and business credit cards to save money. According to the same American Airlines survey cited earlier, SMBs say that enrolling their company in a B2B loyalty program is one of the top three methods of maximizing the value of their travel. If business travel often takes you to the same locations and hotels, consider establishing a corporate account that offers discounted rates with a hotel chain. Additionally, the SBA offers some tips for finding the right business credit cards that offer rewards and points programs here.
Shop bargain travel sites (with care). It’s possible to find deals on travel discount sites, especially if you’re combining a hotel, car and air ticket. Shop around, then cross check prices against the hotel or airline’s website or by phone to ensure that you’re getting the best deal available. Providers may match any online specials offered by discount sites, and their cancellation policies may be friendlier.
Manage your costs on the road. There’s an app for that! One to try is Wi-Fi Finder, a free app that lets you search over 500,000 Wi-Fi hot spots (free or paid) around the world to save you hotel Wi-Fi charges and keep you connected. For tracking and organizing your travel budget, the Travel Pocket app (available for a small fee) gives you parameters for time, location and category and lets you convert your reports into a spreadsheet.
Be smart about business expense tax deductions. You probably already know that you can deduct the cost of mileage, airfares and lodging on your tax return, but did you know you can also deduct 50 percent of meal costs, tips, and even dry cleaning or laundry you need doing on the road? The SBA offers more information on deducting your small business travel expenses on its http://www.sba.gov/community/blogs/community-blogs/small-business-cents/going-road-how-deduct-your-small-business-trave.
Bon voyage and happy savings!
About the Author:
Beth Longware Duff is a professional editor and award-winning writer whose work on a wide variety of topics has been published in print and electronic media. She currently writes on a wide range of topics dealing with electronic payment processing and small business merchant services for Merchant Express.
AdvantaClean crews get ready for the arrival of Hurricane Irene. If the storm hits hard, the business could see a couple million dollars worth of business.
NEW YORK (CNNMoney) — While some business owners are fretting over the damage Hurricane Irene could cause, others are gearing up for business opportunities.
Depending on the severity of the storm, AdvantaClean, a North Carolina disaster cleanup company, could see a couple million dollars worth of business in the storm’s aftermath.
“Certainly, our industry does see an increase in demand during these times,” said Jeff Dudan, CEO and founder of AdvantaClean, headquartered in Huntersville, N.C. “Typically our volume will go up both at home, and we can get some incremental volume and revenues in those areas if we are called in to respond.”
In addition to being AdvantaClean’s founder, Dudan owns one of the franchises and has 13 full-time employees and 26 contractors. The company provides cleanup services including air duct cleaning, mold removal, and emergency services from water or fire damages, which means responding to disasters.
The 17-year-old company’s bottom line got a big boost after Hurricane Katrina hit in 2005. Dudan’s team responded in Gulfport and Biloxi, Miss., and in the French Quarter of New Orleans. In the immediate emergency response period, Dudan said his company did a couple million dollars worth of work after the storm. And AdvantaClean made more money working large projects in the region for another four years.
The company has been preparing for Hurricane Irene. “We have checked all of our vehicles and made sure that they are fueled,” said Dudan. “We ended up pulling the trigger on several sets of new tires.” In addition, the team has reviewed its emergency response plan.
Still, they are not rushing in. “Personally, we just don’t go running off immediately if it looks like a hurricane may or may not hit,” said Dudan. “It is really difficult to predict whether there will be any real damage.”
Let them eat cake: Whether Irene lands with a whomp or a whimper, at least one company is prepared to make a buck.
Cakes for Occasions, a gourmet bakery in Danvers, Mass., is running a competition on its Facebook page, asking fans to predict what category the National Weather Department will call the storm on Monday. One person who guesses correctly will be randomly selected and get a coupon for 20 percent off.
Also Cakes for Occasions is giving away free “Hurri-cakes”: two-inch chocolate mousse cakes, glazed with chocolate and decorated with the national hurricane symbol and the name of the storm, Irene.
The idea behind the promotion is that customers can’t come into a bakery without being tempted by the smells, said owner Kelly Delaney. In addition to its single storefront, the bakery has a website, Cakes4Occasions.com.
“It always generates some additional sales,” said Delaney, who has run freebie promotions on Facebook before. “You will have a handful of people that will come in for just one, but that is just life.” Delaney has made 210 Hurri-cakes and estimates she will give away 40. Then she hopes to sell the rest, which retail for $1.95 each.
A banner year: It has already been a good year financially for Howard Altschule, who owns Forensic Weather Consultants, a company that provides weather damage reports. Altschule saw more business after last year’s blizzards. And if Irene lives up to expectations, 2011 could turn out to be a banner year for his company.
“I have already seen a 50% increase in revenues this year, without the hurricane,” said Altschule. “It could end up being a 100% revenue jump this year. It all depends on what exactly happens and to what extent.”
Altschule, a certified meteorologist who analyzes weather conditions, provides expertise to insurance companies, law firms, engineers and other companies.
Altschule said he would not be surprised to see a billion dollars worth of damage from Hurricane Irene, between the damage and the loss of revenue. He expects to be “immensely busy.”
Surf’s up: There won’t be throngs of beachgoers this weekend, but some diehard surfers are expected to catch the waves.
“This is something that surfers wait for, the waves that hurricanes bring,” said Johannah Sena, the manager of the family-operated Rockaway Beach Surf Shop in New York. “You have to have a board that is a more high-performing board.”
Still, most expert surfers — the ones most likely to try surfing during a hurricane — already have the gear necessary to ride those enormous waves.
So she doesn’t expect to be selling out of boards.
But, “we will be selling a lot of wax, that is for sure,” said Sena, explaining that surfers use wax to add traction to their boards. Otherwise, the storm won’t be good business for the Rockaway Beach Surf Shop. “Nobody is going to the beach to buy a bathing suit, towels, that kind of stuff,” she said.
Holy crap! Someone used social media to trash your company. Social media monitoring tools can minimize the damage.
NEW YORK (CNNMoney) — It wasn’t until a man diagnosed with measles ate at her New Jersey diner that Connie Correia Fisher, co-owner of The Pop Shop, discovered that the only thing that spreads faster than an infectious disease is bad news.
“We had every major TV station here. All the papers were here, and people were freaking out,” said Fisher, who co-owns The Pop Shop with husband and professional actor Stink Fisher. But that’s not all. Within no time, parents and restaurant regulars alike had taken to the Internet, voicing their health concerns on public platforms like Twitter and Facebook.
But while Fisher couldn’t stop the television crews from hanging outside her six-year-old restaurant, she was able to “constantly beat back down” the fear-mongering flooding social media channels, thereby saving her company “thousands of dollars” in lost business. That’s because Fisher subscribes to Sprout Social, a social media monitoring tool that, for $50 a month, helps her keep tabs on every single online conversation mentioning The Pop Shop.
Welcome to the world of social media where 140 characters can cause irreparable damage to your company’s reputation — and bottom line — in seconds flat. Blogs, Facebook, Twitter, LinkedIn — each one is a digital grapevine, letting consumers air their grievances to millions with the single click of a mouse.
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When someone posted a video on YouTube of rats running around a New York City Taco Bell restaurant in February of 2007, the video spread across the web like wildfire, causing Taco Bell’s (Fortune 500) stock price and sales to drop, and prompting duplicate videos with more than two million views to date.,
And then there was the catastrophic BP oil spill in early 2010. Despite thousands of tweets from angry citizens being published within hours of the Gulf of Mexico disaster, it took the oil giant seven days to issue a Twitter response.
Despite these social networking snafus, multinational corporations can more easily rebound from an onslaught of unflattering tweets and derisive Facebook updates than a resource-strapped small business.
“Large enterprises spend a lot of money on public relations so they can throw an entire army at the problem,” said Tim Hickernell, an analyst with Info-Tech Research Group. “But a small business owner doesn’t have that army. He has to take the time to manage his company’s reputation.”
No wonder then that a growing number of small businesses like The Pop Shop are turning to social media tracking technologies such as those offered by Sprout Social, Radian6 (recently acquired by Salesforce.com ()), HootSuite, Twitter Advanced Search, and Sysomos.
These modern-day eavesdropping tools scour the conversations taking place on social networks for relevant comments — and damning criticism, enabling companies to respond in real-time to online opinions. In fact, according to a Forrester survey, of the 301 customer intelligence professionals canvassed, 78 percent responded that they actively monitor what customers are saying online.
Take, Blue Sky Factory, for example. When a customer tweeted a complaint to his 50,000 followers about the Baltimore company’s customer service, Radian6 immediately caught the criticism and alerted Blue Sky Factory’s 23-person agency via email. Within minutes, a Blue Sky Factory customer service representative responded directly to the tweet with a very public apology. It was a critical intercept given that 22 percent of Blue Sky Factory’s business hails from social media channels. In fact, the company sees close to 1,000 mentions a month.
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Stephan Howard wasn’t so lucky. Instead of using a social media monitoring tool, Howard, the owner of Flik and Company, a Toronto interior design firm, learned from customers that his business was being trashed in a local community blog. ‘Have you been ‘Flick’d’ Over?’ read the thread initiated by a disgruntled Flik customer, who claims Flik failed to make good on a down payment for furniture until he took his ordeal to the blogosphere. (Howard denies the allegations).
In no time, the blog became ablaze with name-calling, finger-pointing and commentary from scores of customers. That is, until Howard contacted the local police department, which ordered the blog’s administrator to terminate the thread.
“It really did get ugly,” said Howard, who has since moved out of the neighborhood and relaunched his store under the banner Flik by Design. “I was bothered a lot by what happened, I was sick to my stomach, and there were nights when I didn’t sleep.”
Social media monitoring products can help. However, selecting the right one for your business requires sifting through “hundreds of tools from free services to million-dollar-plus technologies,” said Zach Hofer-Shall, a Forrester Research analyst. These products range from Web-based dashboards that aggregate social media data to sophisticated analytics tools that mine data and generate custom reports.
For cash-strapped small businesses, free tools such as Google Alerts and Twitter Advanced Search let users conduct keyword searches for the names of their companies and competitors, but have “very limited functionality,” warned Hofer-Shall.
That suits Parties That Cook just fine. The San Francisco corporate team-building and cooking class company relies on Google Alerts to flag mentions on user review sites like Yelp. “In a small company with limited resources, it just doesn’t make sense to spend the extra money or extra time [on a costly social media monitoring tool],” said Crissy Gershey, Parties That Cook’s marketing director.
Nevertheless, the $5.99 a month it costs for HootSuite’s basic analytics solution, or $500 a month for Sysomos’ more robust Heartbeat solution, can be a worthwhile investment. By upgrading from Google Alerts to Radian6, DJ Waldow, Blue Sky Factory’s director of community, said he spends nearly three times less sifting through company mentions, and no longer worries about angry tweets or Facebook comments “slipping through the cracks.”
The BP oil spill fund for the Gulf of Mexico has paid out $5 billion of $20 billion set aside for recovery, claims administrator Kenneth Feinberg says.
NEW YORK (CNNMoney) — The fund to compensate Gulf Coast businesses and residents for damages from last year’s BP oil spill says it has paid out $5 billion of the $20 billion set aside for recovery.
The Gulf Coast Claims Facility, which took over the claims process from BP () in August 2010, has approved 38% of the 947,892 claims submitted, according to an executive summary it released Tuesday.
The fund, which has employed as many as 3,000 people, has received claims from all 50 states and 36 countries.
The vast majority of the claims paid have gone to five states. Florida residents and businesses have been paid $2 billion, more than any other state. Louisiana recipients have been paid $1.5 billion. Recipients from Alabama, Mississippi and Texas round out the top five, respectively.
The historic environmental disaster was the worst oil spill in U.S. history, claiming 11 lives and spewing over 200 million gallons of oil into the Gulf.
The spill had wide-ranging economic consequences in the region. Businesses such as fishing, oyster harvesting and charter fishing boats, were impacted directly by oil in the water. Restaurants, hotels and rental properties that depend on tourism money saw a drop-off in sales, even in cases where there was no oil visible on the beaches.
“It is interesting to point out the different nature of the claims coming from Florida, largely tourism, as opposed to Louisiana, largely commercial fishing,” said Kenneth Feinberg, the head of the fund and the former administrator of the 9/11 Victims Compensation Fund.
As the leader of the fund, Feinberg has taken heat from both BP for being too generous in his payments and from the government for being too stingy in his payouts.
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Many of the claimants who were denied payouts say the process was unfair. The U.S. Coast Guard, which has reviewed more than 1,000 claims from unhappy claimants, has sided with Feinberg’s decisions.
Also, for the sake of full transparency, the fund has agreed to be independently audited by the U.S. attorney general by the end of the year, according to the executive summary.
The Gulf Coast Claims Facility will continue to process claims until August of 2013.
Crime pays: Frederick James’ iPad covers made from Madoff’s old clothes are selling like crazy.
NEW YORK (CNNMoney) — If you’ve ever dreamed of turning the tables and taking Bernie Madoff to the cleaners, here’s your chance. John Vaccaro, a New York entrepreneur, is selling iPad covers made from the disgraced financier’s tailored clothes.
Madoff was sentenced to 150 years in prison in June, 2009 for swindling billions of dollars from clients in what has been called the largest Ponzi scheme in U.S. history.
Last November, his clothes and personal possessions were sold at auction sponsored by the U.S. Marshals Service with proceeds going to help those who lost money from his scheme.
One of the bidders at the auction was Vaccaro, 41, who had just launched a new company, frederickjames.com selling eco-friendly customized iPad covers made from cashmere and other fine fabrics. Vaccaro first conceived the idea for his unique covers after purchasing an iPad and searching for a cover that would prove to be both scratch-resistant and fashionable.
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“There was nothing on the market at the time,” said Vaccaro. “When a friend came over one day and left their cashmere sweater lying next to my iPad, I realized that material would make a perfect cover.”
Vaccaro sought the advice of his friend, fashion designer Stephanie Doucette to learn how to transform vintage fabrics and remnants into iPad covers. When he saw an ad for cashmere sweaters being sold at the Madoff auction, he decided he could expand his line while helping Madoff victims.
At the auction, Vaccaro bought Madoff’s cashmere sweaters, as well as 16 pairs of designer pants, and hired a designer to turn the clothing into iPad covers. Vaccaro immediately sold five iPad covers made from Madoff’s former cashmere sweaters to a Wall Street attorney who gave them out as Christmas gifts.
“For some people in the finance world, these covers, made from Madoff castoffs, represent bragging rights,” said Vaccaro. “For others, it’s a chance to own a piece of history.”
Now Vaccaro is focusing on selling one-of-a-kind iPad covers made from Madoff’s Banana Republic chinos and Murphy Nye sailcloth pants for between $250 and $500, while providing buyers with a certificate of authenticity, and a receipt from the auction.
He estimates that he has enough fabric to sell a limited collection of 31 Madoff-themed covers. Once he breaks even with his auction purchase, he hopes to donate a portion of the proceeds to Madoff victims.
After the Madoff collection is sold, Vaccaro plans to continue focusing on selling other customized lightweight protective iPad covers made from rescued and remnant luxury fabrics. Some of his current collections include “The Lodge,” inspired by hunting and skiing material, “The Office” made from wool and silk and featuring classic pinstripes, and “The Island” using rayon and polyester crepe fabrics lined with double-knit wool.
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As he builds his Frederick James brand, Vaccaro continues to oversee his web design and development company, juicyorange.com that he co-owns with designer Mark Robohm. While he would consider purchasing clothes from other famous or infamous people, he concedes it would have to be a good match.
“If I were to buy some of Marilyn Monroe’s former clothing and turn it into iPad covers, it would only serve to devalue the items,” Vaccaro said. “In the case of Bernie Madoff, people were pleased to see his designer clothing cut up in shreds.”