Listen to this articleWeb platform Factoring Club provides an online marketing platform for businesses looking for invoice factoring services. The company provides factoring prospects with opportunities they otherwise would not see online. Below is our interview with Rick Hultz, the founder of FactoringClub:
Q: What is FactoringClub and how does it work?
A: FactoringClub is a broker or agent for invoice factoring companies. Invoice factoring (or accounts receivable factoring) is a method of working capital financing for small businesses. A business sells it accounts receivables or invoices to a factoring company as soon as they complete a sale. It frees up cash that and avoids the typical 30 to 90 days’ collection period. Accounts receivable factoring improves cash flow without taking on debt or issuing stock.
FactoringClub provides an online marketing platform called FactoringClub.com for our “sponsor” factoring companies. Each of our sponsors gets a free listing on FactoringClub.com. Each listing includes a full description of the company, services offered, credit terms and conditions, a video, contact information and much more. FactoringClub earns referral fees from factoring deals that are generated on our platform. We have a call tracking system that logs all calls made from our website to our sponsor factoring companies.
Online real estate is extremely limited and competitive. A Google search only lists 8 to 10 results on the first page. As a resource for 80+ factoring companies, FactoringClub can squeeze more into one search result than factoring companies can achieve alone. We provide a good service and product for both factoring prospects and our sponsor factoring companies. We consider FactoringClub an outsource of online marketing. We provide expertise and resources to deliver online exposure for our sponsor factoring companies.
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Q: What’s FactoringClub’s story? How did FactoringClub start?
A: While at a factoring association in Hawaii in 2015, I was brainstorming for ideas that could generate online referrals in the factoring industry. I had just spent a year creating a broker website and running paid Google ads to get leads. The broker website was like other factoring company websites and the pay per click advertising was expensive. I was talking to a colleague about the online advertising market. She told me that it took her factoring company more than 100 pay per click prospects to generate a client. I immediately knew that I couldn’t make it as a broker in the pay per click advertising market. It was too expensive for my slim margins compared to the profit margins that factoring companies were getting from the same ads. I realized my business model was broken and unsustainable.
As I looked out the window of my hotel into the beautiful ocean setting, I spent the week thinking outside the box for creative and innovative ideas. I had purchase a book by Peter Theil called “Zero to One” in the airport that week. The book was an inspiring read on making your business different and disrupting. I began to catch a glimpse of a web directory business model. A directory website would enable me to achieve the results I wanted in several ways. First, it would be different. Only one other website in the industry was a directory and it had some shortcomings. Second, the directory would give me great content for organic search, so I wouldn’t have to rely on pay per click advertising. Third, the directory provided a unique business model where website visitors could communicate directly with factoring companies without the intervention of a broker.
My wife and I developed the idea and presented our initial web platform at an annual factoring conference, only three months later. We signed up 30 sponsor factoring companies. Afterwards, we began developing the website. I had enough technical experience to do my own website development. Over a 20-month period, we developed a web platform that included 84 factoring company listings, search engine optimization, creative web design, directory features, and call tracking capabilities. The website was appealing, functional and marketable.
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Q: Who is your ideal customer and why?
A: Our target audience is small businesses looking for invoice factoring services online. Our ideal customer is a factoring prospect who is looking for alternatives. The prospect wants to shop online. He or she often prefers a factoring company in a nearby location or particular industry. The prospect gets on our website and finds exactly what they’re looking for in a fraction of the time it would take otherwise. We also provide free consulting for factoring prospects who need or want professional help.
Q: What can you expect in the next 12 months? What are your plans?
A: We’ll continue to compete in the online search space. We want to extend our market penetration and provide as much online exposure for our sponsor factoring companies, as possible. We compete against online brokers and factoring companies that have been around for years. We also compete against online lenders that have very deep pockets from private equity. In the next 12 months, we’ll continue to improve our web platform in both design and features. In the next few months, we’re going to set up a rebate program for our website visitors. This will help drive usage of our platform.
Q: What keeps you motivated?
A: Since we operate on a bootstrap budget, we must be diligent and prudent. I’m motivated, knowing that we have a good business model and we’re helping a lot of people. I get daily strength from my Lord and wife, Lisa, to face the competitive challenges every day. We’ll continue to innovate and create – going from “zero to one”.
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