Wednesday, April 15, 2009

Use TARP to Directly Aid Small Business Lending

When the history of the worst recession since the Great Depression is written, August 2008 will stand out as a pivotal month. That appears to be when the credit crunch became a vicious cycle, consuming small businesses in a vortex of vanishing credit lines and increasingly restrictive loan terms.

For Mark Lane, president of Coed Sportswear and Printed Matter, that's when his bank of seven years called in all of their notes, despite the fact that he'd made a host of difficult decisions -- laying off employees, cutting benefits, and slashing other costs -- to maintain what he thought was a "strong, healthy" banking relationship.

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Common Sense Management

Today features the final blog entry from student submissions. It's written by Caleigh Conahan, an Operations Management Major from Hazleton, PA. Caleigh is a Junior.

The economic conditions have unveiled to the public what I like to call "the two faces of management."

First, there is the 9-5 manager who is not concerned with his/her employees or the betterment of his/her company, rather he/she believes by showing up to the office his/her job is done and pay deserved.

Second, there is the manager who has always been--or developed into--the innovative leader.

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Common Business Cash-Flow Mistakes: Tips to Avoid Them

Every business has cash-flow bottlenecks, but if your small business is so tight on cash that you find it difficult to pay salaries or meet day-to-day expenses, then it is time to look for the causes and find solutions.

Here’s how to avoid some common cash-flow mistakes – and ensure that your small business stays in the red.

Not Evaluating Your Clients’ Credit History

You should check out your client’s credit history; if you don’t, it’s very likely that those with bad credit will delay their payments. If this happens, you should cut back on how much products you are supplying them with and at the same time bill them for the maximum.

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Lower Cost for Online Business: 7 Ways to Reduce Costs

Just as you need to continuously monitor and reduce direct and indirect expenses in your regular business, you will also need to reduce costs in your online business if you want to increase your profits.

If you plan to purchase products, then do some research first.

If you plan to buy and sell, it’s important for you to research which items move fast and which move slowly.

You can do this by going to sites like eBay and observing the items that are in greatest demand. eBay also makes it possible to check out the top ten fastest-moving items.

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Negotiating a Better Deal with Vendors

Part of running a successful small business is learning how to negotiate both with your customers and with your vendors.

There is a fine line between asking for a deal and asking for too much. Just as you would not want your customers to make unfair demands about price, you should not make such demands of your vendors.

That being said, there is nothing wrong with trying to negotiate a better price, especially for items that you purchase on a regular basis.

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Should Your Business Extend Credit?

It’s a growing small business dilemma: Do you need to offer your customers credit? If you sell to consumers, you can offer lay-away plans and other simple ways patrons can pay for their purchases before they receive them. You’re not expected to offer credit other than processing standard credit cards. The situation is more complex when you’re selling to businesses since standard business-to-business credit terms are Net 30, meaning the balance is due by the customer 30 days after the date on the invoice.

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Get Your Business Ready Now for Tomorrow's Recovery

Too many businesses, large and small, claim the recession snuck up on them. I remember in January 2008 having a debate with my then bosses who insisted the economy was fine, while I argued otherwise.

So I want to go on record now and predict that, sooner than most of us think -- like they sang in the musical Bye Bye Birdie -- that "gray skies are gonna clear up." I'm not alone in my optimistic outlook either. According to a recent CNN Money article on the economic recovery, amidst the economic doom and gloom of soaring unemployment, plunging home values, and thousands of businesses teetering on the brink of bankruptcy, "a growing number of economists see a recovery on the horizon -- perhaps even a strong rebound." (Last month's Blue Chip Economic Indicators newsletter had a similar, though more tempered outlook.)

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Interview with financial planning executive Christopher Hill

Northern Virginia-based financial planner Christopher P. Hill is in hot demand these days. His clientele, most of them baby boomers, are in a real pickle as they stand by and watch their retirements diminish day by day. Hill has heard his share of tragic tales of woe as of late. Folks who visit his offices seeking advice at times spill their guts and often even shed tears as they seek a financial planning miracle to help them protect whatever is left in their accounts.

As I sat down with Hill, I got the sense he was more than a financial planner. Judging from the various notes of deep appreciation and sincere thanks Hill receives regularly, Hill’s clients clearly see him as a real hero. One such Hill fan sent in a touching note of gratitude:

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Office Time Management Tips

Since you only have a finite number of hours to get your work done, the secret to getting the most out of each and every workday is to manage your time.

Done right, business time management can indeed be an effective technique for focusing on what really needs to be done while removing the clutter and distractions that may get in the way of achieving your goals.

Here are some time management tips to help you in business:

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Successful small business succession planning

Statistics show that nine out of ten small businesses are family owned and operated; no big surprise there. After all, isn’t a start-up virtually by definition a family business? Indeed, what small business can be founded without some involvement, if not a lot of sacrifice, from the family members?

But when the founders ultimately decide to take their leave, orderly transfer of management and ownership to next generations breaks down significantly. In fact, less than one third of small businesses are transferred to family, and that number includes those that work and those that don’t.

In a past career as a business consultant, often working with families who work together in their businesses, I discovered at least two important small business succession planning truths:

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Facebook's Latest Design Update Helps Businesses

Facebook continues to evolve as it strives to master its own business model. With the latest evolution, Facebook makes its service more valuable to businesses. With the updated Fan Page, businesses now have the ability to send updates straight to the news feed of any person who has chosen to be a fan of that business.This will help companies make their online marketing strategies more viral.

Additionally, Facebook is adding an analytics tool called Insight so you can better understand the demographic of your fans. If your business currently does not have a Facebook fan page, now is the time to jump on the opportunity for maximum early exposure.

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7 Business Planning Fundamentals

Time flies. Thirteen months ago I posted Economic Dark Clouds here in September of 2007. Back then I said “the economic news is clustering now,” but my point was essentially sticking to the fundamentals …

With some notable exceptions, your business moves up and down far more because of very-micro specifics of what you and your team and your customers do. Your specific marketing programs, your new product release, your email campaign, your pay-per-click keyword decisions, your product development, your word of mouth … it’s what you do with your business that moves it up and down, not what happens in the headlines.

… but at that point I really had no idea how bad this whole thing was going to get. And that’s with apologies to Anita’s post on small business optimism yesterday.

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Five Ways Web Design Has Changed To The Advantage of Small Businesses

Web design has changed significantly. What are the changes, and how can you to take advantage of them? Let me tell you a story.

In 1999, the Internet bubble was at its peak. New companies — all planning to become “the next big thing” — were launched daily. These companies were famous for two things — thinking BIG and massive “burn rates.” “Burn rate” refers to the rate a company goes through money. They were spending hundreds of thousands on programming to produce web sites considered mediocre by today’s standards.

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Small business and the wonderful world of niches

One of the things Sears Roebuck became famous for is their Craftsmen tools, especially their socket wrenches, which are mechanical wrenches. Once, when I was buying one of these wrenches I was confronted with options of “Good,” “Better” and “Best,” a strategy for which Sears is also famous. When I asked about the difference between the Better and Best models I was told that the Best model had more notches, or teeth, inside the mechanism. This would allow for finer adjustments to be made when tightening a bolt or nut. Plus, in a tight situation, the extra notches make the Best model work, well, best.

For the past 30 years, the marketplace has increasingly become like that “Best” socket wrench; every year, it acquires more notches. Except in the case of the marketplace, notches are called niches (I prefer “nitch,” but some say “neesh” – tomato, tomahto). And just as increasing the notches in a mechanical wrench allows for finer adjustments, niches create finer and more elegant ways to serve customers, which they like – a lot.

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How NOT to Lay People Off

One of the companies I worked for before cartooning full-time was doing some reorganization. The endless rounds of layoffs had everyone jumpy.

After one round, management must have noticed, so we had a meeting in the break room where, after more explanations of the company’s health and a well rehearsed sigh we heard “you know, it’s never easy letting good employees go.” And then, to his fellow management in the back, “what a day, guys! Who wants to grab some drinks after work?”

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Partnership Killers

In theory, a partnership, especially with a friend, is a great way to start in business. Unfortunately, it rarely works out right. Here are some partnership killers:

  • Sharing your capital instead of expenses. Work out a plan where the costs and expenses are shared rather than all of your money and resources.
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Beware Of Telephone Relay Fraud

The Better Business Bureau warns small business owners that reports of scammers plying their trade through telephone relay services — typically used by the hearing impaired to make phone calls — are cropping up all across the country.

BBB has received reports from many types of businesses that received suspicious orders through TTY or telephone relay services. These services are meant to assist the hearing impaired in making telephone calls and often rely on an operator who relays a typed message from the caller to the business. Because, by law, the operator is not allowed to disclose the origin of the call, this service allows the scammers to hide their identity.

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Small firms: Obama doesn’t understand us

Nearly 60 percent of small business owners think the Obama administration doesn’t understand the needs of small firms, according to a recent survey conducted by City Business Journals Network.

More than 40 percent are less optimistic about the national economy than they were when President Barack Obama took office, compared with 26 percent who are more optimistic. Nearly half think Obama will serve only one term in office. When asked their political affiliation, 42 percent said they were Republicans, 34 percent said they were independents and 16 percent said they were Democrats.

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Small Business Optimism is Down, but Sharp Upturn Expected

The NFIB’s latest report on small business sentiment is out. The NFIB’s Optimism Index is one of the longest standing indices of small business sentiment, and so I tend to place a lot of weight on it.

It shows that conditions and sentiment are not a pretty sight among small businesses.

Although there have been some tiny signals — albeit weak signals — from other sources suggesting things may be looking up in the economy, you wouldn’t know it from looking at the NFIB report. First of all, there’s this chart:

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For small business, Cash is no longer King – it’s the Emperor

For generations, business owners have learned that while Profit may be the Queen of business, Cash is King. And there is never a moment in the life of any business, large or small, when this generally accepted truth doesn’t apply. But in 2009, or anytime the economy slows, small businesses must elevate Cash to an even more supreme level. Consequently, these days, and for the foreseeable future,

Cash is Emperor.

Any Questions?

Blasingame’s 3rd Law of Small Business states: “It’s redundant to say, ‘undercapitalized small business.’” There are at least two reasons this statement is a law and not a maxim:

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