Archive for November, 2010

An Economic Downturn Can Be a Great Time to Start a Business

Really?  It sounds strange, but think about it.

  • Costs are lower.
  • More workers are available and looking for work.
  • Potential customers are looking to cut costs and are more likely to give a new supplier a try.
  • The competition is likely focused internally on cutting costs themselves, and perhaps not giving much effort to marketing.

The one difficulty left to face is . . . . capital.

Lenders and investors are very careful about who and what they invest in during a downturn.  You may have a savings account, a home equity line of credit, credit cards, or other sources of cash to start up a business.  This is well and good.  But if capital is short, your plan of attack to attract that capital needs to be a very well prepared business plan.

Four Ideas For a Better Business Plan 

  1. Be Thorough.  Cover all of the details of your start-up business.  Go to  for additional information on this topic.
  2. Use Candor.  No one wants to hear that “we are the best” and “everything is wonderful”.  Identify your critical factors for success, and tell why you are uniquely qualified to succeed, even if your future success is based upon past failures.  Don’t be afraid to identify your weaknesses, and how you plan to address those.
  3. Be Conservative and Identify Contingencies.  Everyone knows that initial sales projections are difficult to meet.  Thus, give a solid basis for your underlying assumptions, and show a “worst case”, “best case”, and “most likely” case scenario.
  4.  Make a Case for Why You’ve Built the Better Mousetrap.  In other words, there has to be a reason that the public will change their behavior and buy your product or service over what they are currently doing.  What is that reason?  What will incent customers to use your mousetrap?  Does it solve a problem? What is that problem? 

For Further Reading 

These related books will inspire you to find your niche and transform your business into something unique and lasting:

  • Purple Cow, by Seth Godin.  Transform your business by being remarkable.
  • Good to Great, by Jim Collins.  Why some companies make the leap… and others don’t.
  • Thank God It’s Monday, by Roxanne Emmerich.  How to create a workplace you and your customers love.

By: Julie Baumgartner, Vice President

Equal Housing Lender - larger

Banking Acronyms 101

Ever received a text you didn’t understand? For example; Ur my BFF! LOL! IDK, where r u? They assume you understand all the little acronyms in the message. Well, don’t assume anything. The same goes with banking. Because I have been in banking for several years I assume everyone knows the banking acronyms as well as I do. I see them everyday, you don’t. So, here’s a small lesson in banking acronyms: 

ACH – Automated Clearing House
A computer-based clearing and settlement facility for interchange of electronic debits and credits among financial institutions.

APR – Annual Percentage Rate
The amount of interest the borrower actually pays, including loan interest points, and origination fees.

APY – Annual Percentage Yield
The amount of interest expressed as a percentage rate, a deposit account (or a share draft account) would earn in a year at a stated interest rate. The APY disclosure, showing the effect of interest compounding, assumes that funds remain on deposit for a full 365-day year at the advertised rate, and no additional deposits or withdrawals are made.

ATM – Automated Teller Machine
A computer terminal activated by a magnetically encoded bank card, allowing consumers to make deposits, obtain cash from checking or savings accounts, pay bills, transfer money between accounts, and does other routine transactions as they would at a bank teller window.

CD – Certificate of Deposit
A receipt for a time deposit  issued for a stated time period and normally paying a fixed rate of interest.

DBA – Doing Business As
A name used for business purposes that is not the legal name of the individual or organization actually conducting the business. A proprietorship commonly operates under a DBA, as in John Smith DBA John’s Auto Body.

DDL – Daily Dollar Limit
Refers to the maximum dollar amount you can withdrawal from your ATM card at an ATM within a 24-hour period.

EFT – Electronic Funds Transfer
A transfer of funds between accounts by electronic means rather than conventional paper-based payment methods, such as check writing.

EIN – Employer Identification Number
A Taxpayer Identification Number  for entities other than individuals, such as partnerships, corporations, estates and trusts.

FRB – Federal Reserve Bank
One of the 12 banks that, with their branches, make up the Federal Reserve System.

FHA – Fair Housing Act
A law enacted as part of civil rights legislation that prohibits discrimination of home sales, rentals and financing based on race, color, national origin, religion, sex, familial status or those with disabilities.

IRA – Individual Retirement Account
A tax-deferred retirement account allowing an individual to contribute a pre-set amount annually from personal income.

IRS – Internal Revenue Service
An agency of the federal government that is responsible for the administration and collection of federal income taxes.

PIN – Personal Identification Number
A numeric identification code used by bank customers when making transactions at a self-service electronic banking terminal, such as an automated teller machine.

POA – Power of Attorney
An instrument by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal.

POD – Payable on Death
A regular bank account that names a specific person as the beneficiary of all funds once the bank account holder dies.

POS – Point of Sale
A system that uses a computer terminal located at the point of sales transaction so that the data can be captured immediately by the computer system.

PR – Personal Representative
The generic term for an executor for the estate of a deceased person who left a will or the administrator of an intestate estate.

RTN – Routing Number
A numeric coding facilitating check clearing among banks. The ABA numbering system, managed by the American Bankers Association, assigns a unique identifier to each U.S. financial institution.

SBA – Small Business Administration
A United States government agency that provides support to small businesses.

TIN – Tax Identification Number
An identifying number used for tax purposes in the United States. It is also known as a Tax Identification Number or Federal Taxpayer Identification Number. It may be assigned by the Social Security Administration or by the IRS (Internal Revenue Service.)

UGMA – Uniform Gift to Minors Act
A UGMA provides a child under the age of 18 (a minor) with a way to own investments. The money is in the minor’s name, but the custodian (usually the parent) has the responsibility to handle the money in a prudent manner for the minor’s benefit. The parent cannot withdraw the money to use for his or her own needs.

UTMA – Uniform Transfers to Minors Act
The Act allows the donor of the gift to transfer title to a custodian who will manage and invest the property until the minor reaches a certain age. The age is generally 21, but is different in some states (usually 18 in those cases). In the interim, the custodian can also make payments for the benefit of the minor out of the corpus of the gift.

By Cindy Lewis, Customer Service Director

Equal Housing Lender - larger

New Computer – first things first

The Internet is not a scary place if we use some common sense to protect ourselves. Most malicious activities entice you to take an action and the fraudsters only get better as we learn their tactics. If you are able to do these 4 things you will be better off than most: 

1. Learn your security software. While there is nothing that will completely protect you from all the bad stuff on the Internet, good security software will take you a long ways. Security software with a paid subscription is best, but you need to make sure that it stays up to date and that you continue paying for updates from year to year. 

2. Learn how to check for updates. Both Windows and Mac have update utilities that you should understand how to use. The updates do typically install automatically, but some updates still require your interaction to complete. “Windows Update” can be found in the start menu and “Apple Update” is in the Apple menu. 

3. Be careful what you click. Did you know some countries can measure fraud income as a percentage of their gross domestic income?  The combination of weak punishment of fraud perpetrated over the Internet and the weakened economy has created an outbreak of Internet fraud.  Read unexpected messages received through email or Facebook with an air of distrust.  Most fraud is perpetrated by enticing you into clicking upon something then willingly giving out your personal information.  If you receive an email promising something that is too good to be true (like money or a free gift) then it probably is too good to be true.  There are good resources on the Internet – like or simply searching Google – to help you discover false information. 

4. Have a resource you can call upon for help.  Your bank is a good starting point because they are already good at protecting your information and ultimately your money.  It is also good to have someone who can help you learn and troubleshoot your computer.

By: Jason Wieland, IT Manager

Adopt a Soldier

A little bit of peace.  Citizens Bank Minnesota has teamed up with Operation Minnesota Nice, adopting Soldiers/Marines who are overseas and sending them care packages from “home”.  Currently our employees are sending 12 Military personal packages every month.  This is not a matter of whether you believe we are overseas for the right reasons, but a matter of supporting our military who have no choice but to be there.  Many of the men and women we have adopted haven’t received as much as a letter from home, so for them to know that someone back here cares about them makes a difference in their lives and gives them some peace of mind. There are days these men/women go without a meal from their Mess Hall. The snacks sent help provide a little nutrition or help tide them over. They wear holes in their socks in a matter of days.  We send them new socks, as they don’t have a retail store to purchase new ones.  They may go for weeks without a shower.  Sending wet wipes and Q-Tips helps them stay somewhat clean. Many of our Military are overseas for the holidays.  We send them Christmas in a box. If you would like to make a difference in a Soldier/Marine’s life, donations are being accepted at any of our Citizens Bank Minnesota locations. One soldier who had received a package said, “In the darkness shines the light of an angel.”  Be an angel today!

For more information go to:  

By Jill Derksen, Loan Processor/Secretary

An Interesting Alternative to Student Loans

I found this interview, which ran on NPR on September 8, 2010, quite interesting.  The interview is with Neoga Leviner, General Manager, Lumni Inc., a company that has created an interesting alternative to traditional student loans.

Traditionally, students borrow the money they need for college and are able to defer interest from accumulating until after their graduation.  Once they graduate, students may have thousands or dollars worth of debt to pay off – a sizeable hole that students are forced to climb out of before they can even dream about saving for a car, a house, or – gulp! – retirement.

Lumni offers students an alternative.  They will loan students up to $6,000 a year for college – not enough to completely fund a college education, but an amount meant to help bridge the gap between the amount available to the student and the amount needed by the student.  In exchange, students sign a contract to pay Lumni a percentage of their salary (the actual percent is not mentioned in the interview) for a fixed period of time, usually 10 years, after they graduate.

Lumni was started in Latin America, and this year will be making their first loans to students in the United States.  If you are going to start college soon and are forced with the dilemma of financing your education, you may wish to check with Lumni. Would this type of loan interest you?

By: Joe Geistfeld, Marketing Intern

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