Why Small Businesses Fail

According to the U.S. Small Business Administration, roughly 75% of small businesses fail within the first five years. Success in business is never automatic. It isn’t strictly based on luck – although a little never hurts. It depends primarily on the owner’s foresight and organization. Even then, there are no guarantees. The following are the primary reasons for small business failure:
• Lack of experience
• Insufficient capital (money)
• Competition
• Low sales
• Poor location
• Poor inventory management
• Over-investment in fixed assets
• Unexpected growth

There is simply no way to eliminate all the risks associated with starting a small business – but you can improve your chances of success with good planning, preparation, and insight. Start by evaluating your strengths and weaknesses.

The economic conditions are steadily improving, even if at a snail’s pace. You know that you have to get your client’s attention at least 7 to 10 times before they are willing to buy from you. How can you make sure you have reached that number when the time is right for them to purchase?

If you follow the 4 Cs, your clients will gladly take your calls, listen to what you have to say, and buy from you when they are ready. The four C’s are: Competency, Concern, Commitment, and Consistency.

Of course you are competent in your profession, but do you regularly show it to your customers, or should they just know it?

Are you concerned enough about the welfare of your clients that you would recommend products that are of more value to them, even at some expense to you?

Do you demonstrate Committment to their long term success by going out of your way to help them?

And now for the hard one to many small business people: Consistency. Specifically, do you consistently keep in touch with your clients?

Here are our 8 Secrets of Keeping In Touch With Clients and Prospects.

Secret 1: Show your competency by forwarding useful articles. Show them you stay informed about your industry, and are willing to share the information.

Secret 2: Show your concern by asking about them. For instance, find out how are they doing during these economic times.

Secret 3: Show your commitment by asking if any of your products or services are not working out as they expected.

Secret 4: Demonstrate consistency by sending out regular email newsletters.

Secret 5: Find other reasons to keep in touch, such as a thank-you note after a phone call, order, payment, something, anything.

Secret 6: Pick up the phone. Most successful sales people make regular phone calls, while most entrepreneurs just wait for people to call them.

Secret 7: Visit in-person.It is amazing how people respond to even a simple cup of coffee.

Secret 8: The biggest secret. Listen, listen, LISTEN. It is so rare that people take the time to listen to others, it may be the biggest gift of all.

If you follow the 4 C’s, people will definitely buy from you when the time is right. You don’t need to have the cheapest prices, because you will be the best value for their success.

Steve

In VerticalResponse’s February 1 Newsletter, they found that “Only 30% of marketers are socially sharing their emails. However, 89% of these say it’s helped them reach a larger audience with their emails.”

Don’t be afraid to let your friends and followers know, via Twitter, Facebook, LinkedIn, or whoever you are using, that you recently sent an email newsletter, and include a link to it.

Steve

“The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.” – John Maxwell

If you have not already done it, now is the time to determine what you want to accomlish this year. Taking the time to focus on what we want to achieve concentrates our energy in that direction.

I recommend using SMART Goals: Specific, Measurable, Aggressive, Realistic and Time-bound.

SPECIFIC – exactly what do you want to accomplish. When it is finished, what will it look like? Stay away from vague terms like “satisfied” and use ones like “book published.”

MEASURABLE – Making it measurable does two important things: First, it is difficult to see what measures are working unless you can measure the progress. Second, as Tom Peters wrote in 1986, “What gets measured gets done” Just paying attention to your movement concentrates more energy into accomplishing the goal.

AGGRESSIVE – Don’t be too easy on yourself, aim high. Chances are you’ll surprise yourself at how well you do. For instance, you can plan to sell twice as much next year as the past year. But if you try to sell five times your previous record next year, and you only sell four times as much, will you really be disappointed?

REALISTIC – While I recommend being aggressive, aiming to sell a billion dollars worth of services next year when you have sold only fifty thousand dollars worth in the past could keep you trying to sell huge accounts when you need to build up resources by selling less this year. Then in five years you will have the experience and assets to deliver the billion dollars worth of services.

TIME-BOUND – Extremely important. Give yourself a deadline. For large goals, you should figure out intermediate goals to keep yourself on track.

Using SMART Goals, does a lot of important things: It gets us to concentrate on what we think is important. It creates a clear picture in our mind of what success will look like. It keeps us from getting too distracted by the little things that are always encroaching on us.

Using SMART Goals is only one secret in our paper: 8 Secrets To Long Term Success. For more information, go to:
http://8secrets.biz/Programs/StratPlanOutline-2010.pdf

Reaching your goal takes focus

Twitter has somehow become the latest fad in communications, even though you can only communicate with 140 letters or less.

Here is Martin Luther King’s “I Have A Dream” speech in 140 characters allowed on Twitter: My dream: 1 day ths nation’ll rise up & live the tru meaning of creed: “We hold thes truth 2 be self-evident: that all men R created equl.”

Yet, Twitter, Facebook and other forms of social media, while appearing to be almost juvenile, are turning other forms of communication and marketing on their heads.

Why?

People want to be in control. Using the new social media tools, they get to control who and what they pay attention to. Everyone is busy these days, and everyone is bombarded with information. With social media, they can stay in contact with people they like, and shut out those they don’t. They can work on their own time, and can say one thing and send it out to many.

I remember my younger days, where the telephone was on the wall, televisions only showed three channels, and if you wanted something you found it in the Ma Bell Yellow Pages or in the Sears catalog.

Those days are long past, but many marketers still try to treat prospective customers the same: Make them listen to the sales spiel, whether they want to or not.

People are spending more and more time using social media to stay connected. Social Media is permission based – meaning people have to give you permission to contact them, and can revoke that permission at any time.

This means you need to treat people differently to be successful. You need to add value to their lives, or they will simply block you, maybe forever.

Add value, and you can have thousands of loyal followers, although for many of us a couple hundred paying fans is all we ask for.

They also pass what they like, or dislike, about you to others. Remember, they can contact hundreds of their friends and followers in the touch of a keystroke.

Nobody is liked by everybody, and we all make mistakes. So we can expect to get hammered on Twitter occasionally. But if we create value, that could go out to thousands of prospective clients we couldn’t otherwise reach.

If you want to do inexpensive, effective marketing, consider Social Media Marketing.

If you want to learn how to get started, sign up for one of our teleconferences on the subject:  www.8secrets.biz

Trust. One of those 10 touches.

Customers don’t buy when first hear of them

May be 4-5 before they even recognize your name

Ten times before people are ready to buy.

What happens if they only hear of you 5 times?

Clients only by mandatory things when worried,
but want to buy when things get better.

Continue to market, but stay within low budget.

But have to have enough resources to make the ten times.

Social Media Marketing

Blogs work

If you’d like to learn more, consider calling into one of our teleconferences.

I hope you’re still marketing. Otherwise, how are your customers and prospects going to remember you when they are ready to buy?

This has been a tough year, and a lot of people have gone out of business. If your customers haven’t heard from you, they may assume you’ve shut your doors, too.

Soon, pent-up demand will create a huge demand for goods and services, once people get past survival mode. People who have been putting off purchasing new equipment will want to, they’ll NEED to buy, as soon as they are confident they will make a profit from it. Once things start, people will start buying in a hurry.

Juan Martinez is president of Cal West Service, which services commercial kitchen equipment, such as restaurants, hospitals, schools and nursing homes. He recently told me that, due to budget cuts and revenue drops, people are doing just enough to get by. If one of his clients has a kitchen with three ovens, and one oven is working, they don’t have anything serviced. He is waiting for the day when these clients want to get them all running again.

Your clients are probably like that, too. If you have been planting seeds, when people are ready to buy, you’ll sprout into their consciousness. If not, there is a good chance they will go to someone else.

Even in good times, you need to get someone’s attention an average of ten times before they are ready to buy from you. When times are rough, that number grows. You may need to touch someone 20 times or more, so you need to keep reminding them of you until they finally are able to buy your product or service. What happens to people who give up after five or six touches?

What kind of marketing is right for you? You can advertise in almost any of the traditional media for a fraction of what it cost a few years ago, whether it is print, radio, or television. These media may be a smart move to reach a wider audience.

Many small business owners, however, don’t have enough saved up to advertise. Here are some less expensive ways to market:

1. Pick up the telephone and call. Even if your current and prospective customers aren’t buying yet, make sure you keep up the relationship so they will keep you in mind when things turn around. Ask if they can refer you to someone who may be buying.

2. Network, network, network.  Make sure you meet lots of people and they know what you do. Networking is usually the cheapest marketing of all, except for your time.

3. Internet marketing has a wide range of costs, from low cost to high cost, with varying returns. Make sure your website is current and easy to use. Look for ways to get people to it – there are lots of ways to do that.

4. Email Marketing is a relatively inexpensive way to stay in front of your clients. If you send out one email a month, you are doing well.

5. Social marketing is all the rage: Facebook, LinkedIn, Twitter and others are all free of charge, and they are turning other forms of communication on their heads. Do you understand them? Do you use them? See our other article for more information.

There are lots more, but these should get you started. But whatever you do, keep marketing. Don’t let them forget you when they are ready to buy!

Once you have a million dollars to invest, it is not too hard to turn that one million into two million, or even five million. However, it is extremely difficult to make that first million. Very few people have been able to do it, although many, many have tried.

I have been surprised so often in the past to learn who has one million to invest that I am no longer surprised when I learn of a blue collar worker who can invest a million dollars. These people have learned to save, then safely invest. Others keep borrowing, hoping to hit the jackpot some day.

Go figure.

Steve

One of my favorite sayings, it is by Bob Newhart.

I read an excellent article on small biz in Wall Street Journal yesterday that talked about family-owned businesses. 90% or more of businesses in US are family-owned, including a third of Fortune 500 businesses. These businesses may be more steeped in tradition, thus may be less likely to change as conditions dictate. They also may not have formal plans in place to shift in response as the economic environment moves.

The issues they bring up are applicable to all businesses, even if the examples they used I didn’t find particularly enlightening.

In one example, a family-owned Chevrolet dealer in Texas, the issue was not that the family was not prepared for the recession, it was that they were not prepared for the sole supplier, General Motors, would go bankrupt and renege on the contract they had depended on for many years. Any small business that uses only one primary supplier or one primary customer can be in trouble if that primary changes the rules.

The SECRET here is to use multiple suppliers and multiple customers. Don’t get too dependent on any one.

Another example is a small bookstore. Small bookstores have been rapidly disappearing for years before the recession started, essentially since Amazon started selling online. Since I am a book author, I have been following this trend for years. Independent booksellers have gone the way of buggy whips, which is sad, but reality.

The SECRET that successful businesses use is to constantly make minor changes to adapt to the new environment. One of our local bookstores shut down their retail bookstore and now carries “used” books for sale which are advertised on Amazon. He must buy the books new, sell them essentially at cost, but can make a profit on the shipping and handling fees.

The third example was a restaurant that has been around for over 50 years. Restaurants are among the most volatile businesses to own. The fact that this one lasted so long is a testament to persevering through many changing conditions. I don’t know this restaurant, although I have been to Daphne, Alabama, but many restaurants, hair stylists, and other businesses depend on the same clientele and location. Many fail to update the interior, recognize that businesses in the area are beginning to appear worn, and that the clientele must eventually change.

The SECRET here successful small businesses keep renewing their appearance, make sure their locale is vibrant, and continually draw new customers to replace the ones who will inevitably leave. I’m not suggesting following the latest trendy style, or going into debt. I am talking about looking clean and refreshing. Do some planning for the change you know will come, and put aside some cash to pay for it. One CPA friend says that if hair business doesn’t renovate every 5-7 years, they slowly lose business and eventually go out of business.

For the full article, click here: http://8scrts.com/u/FWeu

Steven Hilferty

Are you exhausted from trying to improve business?

You are not alone. Most of the people we have talked to seem to feel that way, too.

Fortunately, relief may be on the way. Don’t expect a surge of new orders just yet, but don’t expect things to get too much worse either. The National Federation of Independent Business reports that small and independent business owners are feeling a little more optimistic that are turning around.

The Index of Small Business Optimism gained 2.1 points last month, rising to 88.6 (1986=100), 7.6 points higher than a very low reading in March.

Even my regular Home Depot parking lot has started to fill a little more. I’ve been doing some projects on my house and making regular trips to Home Depot. At first it was just Monday that were better (I avoid going on weekends), but lately mid-week has also shown an increase of vehicles in the parking lot.

The future really is looking brighter.

As things continue to improve, expect to feel even more tired and possibly even a little depressed. We’ve all been under a lot of stress for a long time, and that puts excess adrenaline into our systems. As we start to relax, many people go through “Post-Adrenaline Withdrawal,” including fatigue and mild depression.

But that is actually a good thing. It means we are getting more relaxed and will be in a better position to take advantage of the surge in orders once they begin.
The NFIB reiterates that there is a huge pent-up demand and spending will recover, albeit slowly for the near future.

So find ways to relax, then get ready for “the surge.”

For the complete NFIB report, go here

For a bit more on Post-Stress Adrenaline Withdrawal, Go Here

Social Marketing 10 Do’s & Don’t’s – http://8scrts.com/u/YapC

Forwarded from Dave Bonini

The recession has probably ended, according to the latest figures. That sounds like better news than it actually is. It only means things are not getting worse. Most areas of the economy are in their worst financial shape of the past sixty years. Overall recovery may be very slow.

This was confirmed for me, again, when I spoke recently at a Lions Club meeting. Lions Clubs, as you probably know, have worldwide recognition for their work in improving vision. This includes collecting and recycling eyeglasses around the globe. At this particular club’s most recent drive, only 30,000 pairs were collected, down from 90,000 pairs in a normal drive; a 70% reduction.

Many won’t agree, but I think that is great news, because I had a major revelation during that meeting.

Like many people, when my eyeglasses start to get old, I rarely think it is worth the trouble to use them until they completely fail, like my father did. I just buy another pair. However, when money is tight, I do make them last a lot longer, waiting until I have more money in my pocket. Then, I buy a new pair, or two, and feel so much better.

Based on what I heard at the local Lions Club, once the economy recovers, many people will be buying the eyeglasses they have been putting off. The 70% shortfall in eyeglass donations may indicate that people will be buying 70% more than normal once the economy recovers. That will be a boom for optometrists who will then be able to catch up on purchasing items they have been putting off. This will trickle down to many other areas of the economy. And they won’t be alone.

All this is great news for the small business survivors of this recession. Recovery will happen very quickly for those who have positioned themselves for the pent-up demand to come. There will be far fewer competitors than before, and few of those competitors are in a position to grow rapidly.

For instance, many people have been putting off maintenance on their houses, waiting for things to settle down before they spend money on paint, windows, rugs, or kitchens. Once they are financially comfortable, homeowners will want to fix their houses quickly. Contractors and house painters who have survived and have continued to make themselves known will be working much harder than they have in years.

Don’t forget that corporations have also been putting off purchases. They will need to replace worn out computers, office supplies, software, and inventory. Small businesses that provide vital services to these corporations will also be dealing with pent-up demand.

SURVIVAL is the secret to success right now. In order to take advantage of the coming demand, business owners must stay in operation and continue to make themselves known. So don’t spend too much. Conserve, but continue to market inexpensively.

Get ready for the upcoming demand.

Steven Hilferty
The Survival Guru for Small Business

PS – Even the Lions Clubs will be dealing with pent-up demand. I predict a lot more eyeglasses will be donated next year, and people who never donated before will be interested in giving.

I’m constantly amazed when small businesses make it hard for me to get in touch with them. Don’t frustrate your customers.

Here are three important marketing tips for you website – http://8scrts.com/kNBUwcE

AddtoAny.com, the most popular online widget that lets website owners help their visitors easily share, save and subscribe to their website content has released results of the data they gather.

And the number one place where users share their content is (drum roll please) — FaceBook.

Read the entire article: http://8scrts.com/url/FKStGzjL

Entrepreneurs aren’t the only ones going through tough times. Big businesses still can’t afford to rehire people the people they’ve let go, never mind new ones. According to the Wall Street Journal, there are less job openings now than anytime since the Labor Dept. started tracking in 2000. Full article: http://8scrts.com/m2La

Steve

Is the recession over? The newspapers seem to think so.

Of course, if the recession is over, it only means the overall economy is not shrinking, which is the definition of a recession. It does NOT mean that things are getting much, if any, better.

And it certainly does not mean that things will be getting back to “normal” any time soon. A number of experts are predicting three years before any real economic recovery occurs.

Can your business last 3 more years by doing more of what it has been doing lately? I hope so. Otherwise, even more belt tightening will have to occur, or additional revenue streams found, in order to survive.

Surviving this recession is extremely important, if you can. As I’ve written before, the survivors will be rewriting the rules in a couple years. Wouldn’t you like to be in that position?

The biggest secret to recession-proofing your business is keeping away from additional debt. Even though it was the massive debt load that the country took on that got us into this mess in the first place, some people still don’t see the dangers.

A client recently asked how she could pay salaries if she didn’t take out another loan. My answer: if you have to take out a loan to pay salaries, you are paying too much in salaries. If she takes out a loan, next month she will have to continue to pay salaries, and repay part of the loan, and her revenue is unlikely to improve significantly for quite a while. Before long she will need to take out another loan to pay off her first one. And if she can’t find someone to lend her any more money, she could lose not only her business, but her home as well.   

Find other ways to keep your business alive.

One huge secret is to find new revenue streams. There is still money being spent out there. What do you need to do in order to get some of it? Look around: there are opportunities where you least suspect them. Keep your eyes and ears open. It is amazing how some of my clients found new revenue streams, in places nobody else was looking!

If you need more information about how to recession proof your business, check out the book I’ve written on the subject: 8 SURVIVAL SECRETS FOR SMALL BUSINESS OWNERS.

Keep the faith.

Steven Hilferty

I like Facebook. I still can’t believe how easy it is to use and get and stay in touch with friends and relatives who I haven’t seen in years.

And now people have been telling me I need to get a Facebook page for my business.  Until today, I haven’t figured out how to do that (yes, I haven’t tried that hard, but I did try).

Today I found this article by Denise O’Berry that makes it easy to get started.  Check it out:  http://bit.ly/E3sI

Steve

These economic times are even worse for small businesses than for large ones. Many times we feel we are fighting a battle that just can’t be won. Many small business owners have gone through bouts of depression, realizing they may lose the business they have worked so hard to establish.And some small businesses will not survive.

It sucks!

The good news is that, once the economy starts to recover, small businesses are in a much better position to take advantage than large companies are. The very fact that we have been through a depression means that there has been a major change in the business world. Large companies need to strategize, train people, put procedures in place, etc. Small companies just need to identify the new opportunity and jump in.

On the other hand, small business owners will need to recognize that things HAVE changed. The way of doing business 2-3 years ago is no longer going to be the way of the future. I don’t know what it will be, but it will be different!

That means you need to be looking at the NEW opportunities that are coming along. Don’t forget all your past lessons, because they will help you get a toehold and then a hand hold and then help you sprint to the top. However, it will still be painful because things have changed.

This is the time to keep your eyes open and start doing things a bit different.But do them cautiously, inexpensively. The economy may be leveling off, but that doesn’t mean it is good.  People still can’t afford to pay what you are worth,  most of the time. But if you keep your eyes open you will see opportunities that many others will miss.

Steve

PS – if you want to know the secrets to keeping your business going strong, even in weak times, check out my new book:  8 Survival Secrets for Small Business Owners.

Once I published the article on SBA Loans, several glaring problems with the America’s Recovery Capital Loan Program (ARC) Loans. It was pointed out to me that in the State of California, only 21 of these loans have been made.

Then Bob Clayton, a local Community Development Block Grant administrator, explained some of the issues in this email to me that reads:

Unhappily, the ARC Loan Program has major structural problems, including:

Loan Package Terms:

1/no SBA or Lender fees
2/no interest (to the borrower)
3/funds to be used only to pay down debt
4/six months to draw down the funds
5/twelve months no payments no interest subsequent to final drawdown
6/five year repayment amortization, no interest – about $600/month

So what could be wrong with that? See below:

1/No fees/interest or other compensation to the lender until amortization begins (SBA then pays 5+2% to the lender)
2/lenders won’t swallow the cost of the loan amount – $35,000 – for 12-18 months with no compensation, therefore
3/no lender participation (small exception noted below), therefore no ARC loans are being made.

The Exception – Wells Fargo, BUT

they will only accept loan applications from their commercial borrowers – not account owners but borrowers.
and the funds can only be used to pay down outstanding Wells Fargo – commercial – debt.

Wish it was better news – unhappily, SBA did not include a commercial lender in the discussions leading to establishment of the program.

Keep spelling out the answers you are providing, some of our borrowers need good stuff.

Bob Clayton, Senior Principal
UFSG, LLC
CCCounty CDBG Loan Program Administration
925-952-9158

Is there a chance that the SBA really doesn’t understand small business?

You bet.

Steve

I went to a memorial celebration for Merten Tilley today and discovered just how powerful reinventing yourself can be.

Merten continued to do just that for most of his 83 years, and had a powerful effect on others around him. The story below gives only a very small view of a man who was successful in business, education, and in life!

Are you planning to keep giving, even if it means reinventing yourself? I am.

Steve

Dr. Merten Arthur Tilley died at his home July 4 after a long battle with cancer. He was 83.

Dr. Tilley spent his professional life re-inventing himself until he lived out his dream as a university professor for the last decades of his life. He obtained his doctorate degree at age 66 and began teaching at The University of Phoenix while living in Pleasanton.

Dr. Tilley was born Feb. 4, 1926 to Clifford P. and Laura C. (Mertens). He joined the U.S. Army Air Corp in 1944, serving as a radio operator and control tower operator in Stephen Field, Newfoundland. Following his discharge, he and six of his St. Louis buddies were invited and went to Valley City, North Dakota to attend college and play football. He interrupted his pursuit of a degree to marry and then was employed with radio station KSGM in St. Genevieve, Mo. using the air name of “Ted Gray”.

When the Korean War broke out, he re-enlisted and served in Japan and Korea. When he returned to the U.S. he was assigned to a fighter squadron in Oregon as the non-commissioned operations officer. Encouraged and mentored by a Hungarian professor, he applied and was accepted for a doctorate degree at the University of Vienna in Austria. He graduated in 1956.

Having discovered the joy of living abroad, he returned to the U.S. determined to find a job in the airline industry. He joined Pan American World Airways in New York and rose to become a manager of communications. He married again and began a family in New York.

Dr. Tilley went on to join IBM and for 11 years conducted marketing research in the U.S. and Europe. His second marriage ended during this time. He then joined The Amdahl Corporation living in Munich and Rome.

Dr. Tilley returned to the Bay Area, married again in 1988 and enrolled in The Union Institute as a doctoral candidate in business. He successfully defended his thesis and received his doctorate in 1992.

He then joined the faculty of the University of Phoenix, where he taught for the next fifteen years, and became the Campus Chair of the Graduate Business Program. In 2005 he was invited to teach for six months in Russia.

He is survived by his wife of 21 years, Marjory F. (Methvin) Tilley; three children, Malcolm I. Tilley of Pleasanton, Martin M.R. Tilley and wife (Violaine) of Vienna, Austria and Mona M. Tilley of New York City; one grandson, Theodore Tilley of Vienna, Austria.

These are strange times for many of us. The economy has been in a tailspin for a long time, which prevented customers from buying anything that could be put off. But there are bright spots in unusual places.

As an example, let me tell you about on commercial automobile salesman I know. He works for General Motors, the bankrupt auto maker that is shutting down plants and dealerships like crazy. For this salesman, however, the last twelve months have turned out to be the best he has ever had.

How can that be?

"No, it's not luck."

Turns out that a number of city and county governments realize there will be some very lean years ahead. So, with their available cash, replaced a number of their vehicles with new ones. The supervisors knew they would not be able to buy cars for several years, prices will probably never be lower, and amazing incentives were being offered. In addition, interest rates are very low and the manufacturers are willing to negotiate payments to make the sale.

This was not waste, fraud or abuse. This was smart planning. These government agencies will need to replace old vehicles to do their jobs in the next few years. Over the past few years, tight budgets have kept vehicles from being replaced at the end of their normal life cycle. Police cars wear out very quickly because of the way they need to be driven, and are very expensive to repair once they reach a certain point.

Of course, there were tradeoffs, and some tough choices that had to be made. Very valid programs had their budgets reduced in order to pay for these vehicles. Some important programs were discontinued altogether.

But the point is that if you look hard enough and get enough information, there are probably people who need your products and services as much now as they ever did.

So keep looking!!!

Steve

PS – got any more stories? Email them to me or post them here.

Looking for an SBA Loan to make ends meet?

In addition to the historical loans guaranteed by the SBA, there are some additional loan programs available for the next year by the American Recovery and Reinvestment Act of 2009.

One loan is America’s Recovery Capital Loan Program, which can provide up to $35,000 in short-term relief for viable small businesses. Created under the Recovery Act, the temporary ARC program offers interest-free loans to viable small businesses, which carry a 100 percent guaranty from the SBA to the lender and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

The SBA Microloan Program is also undergoing changes. The Microloan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $13,000. The maximum term allowed for a microloan is six years, but loan terms vary according to the requirements of the intermediary lender. Interest rates vary, but generally will be between eight and thirteen percent. Business owners contemplating application for a microloan should be aware that intermediaries will generally require some type of collateral, and the personal guarantee of the business owner. Applications are submitted to the local intermediary and all credit decisions are made on the local level. Changes to the Microloan Program due to the Recovery Act have not yet been implemented.

Check the SBA website for additional information. It is relatively easy to navigate.

Will a Loan get you into trouble?

Remember that easy loans got this economy into trouble in the first place, and caused millions of foreclosed homes and personal bankruptcies. In my experience, getting a loan is frequently the worst thing that can happen to a small business, causing them to make decisions that will cost the business owner dearly for years. Unless you KNOW exactly what you are getting into, my recommendation is to find a different way to keep your company going. It may seem like borrowed money can get your company going faster, but learning to grow lean will keep it going longer.

Steve

The current recession has hurt a lot of people but, remember, every night brings a new dawn.

With that in mind, are you building a strong foundation to be able to take advantage when the recession ends, the way people did during the Great Depression? Did you know that more millionaires got their start during the Great Depression than any other time in US history?

Those future millionaires took advantage of the conditions to prepare themselves for the upcoming economic recovery. Some had enough money to buy up small companies for pennies on the dollar. However, most started their own companies, and found ways to keep moving ahead, slowly and confidently, while all around people were demoralized and unable to see the possibilities. They created solid foundations for their future growth. They used the time to build their products, test ideas, and put other processes into place.

Is it too late to take advantage of this recession? The latest news says the recession already bottomed out during the spring. While it may not be too late, but I certainly wouldn’t wait too long to get things ready.

This recession has put many of your competitors out of business or has weakened them so much that, given the right plan, you can increase your market share dramatically when the economy recovers.

One of the most important things is to build a strong foundation for growth. Strengthen your product. Build your customer service process. Start talking to potential customers.Above all, sit down and work on your Strategic Plan. Make sure all your efforts are going to your most important Long Term Objective, the one you want to achieve in 10-20 years.

By the way, I am not recommending you invest additional money.

There are many inexpensive ways to prepare for the oncoming recovery. Some of them can be found in my new book, 8 Survival Secrets for Small Business Owners.

I certainly can’t predict when the economy will become strong again, but I can predict that it will be stronger than ever before. Now is the time to get your company ready for those conditions.

Steve

Had a beautiful day: My MBA students graduated today.

Less than 2% of the people who start college ever get a Master’s of Business Administration degree, and I get to impart some of the knowledge I’ve acquired. These graduating students make me very proud to be part of the process.

Over the last few years, I’ve taught about 400 MBA students, and found out that three-fourths of them want to start their own business, either for-profit but, in many cases, not-for-profit. Of course, my heart is with entrepreneurs, so I encourage it. But for those who want to make the difference in large corporations, I encourage them to follow their heart and to take charge of their careers.

Getting an MBA gives these people a leg up in the world of business, in companies large and small. However, there are millions of successful small business owners who do not have an MBA. They bring different skills to the to the firm, but need to learn many of the same lessons one way or another.

So my hat my comes off to all of you who continue to keep working and struggling to make a difference.

Steve

The top 3% of people Seek Problems: Their goal is to be the BEST

The next 18% of people Solve Problems. Their goal is to Achieve.

The next 55% of people Hide from Problems. Their goal is to make it through the day. These are average people.

Bottom 24% of people ARE the problem. Their goal is to take from others and get something for nothing.

Characteristics of a 3 percenter

• Confident, good self-image
• Admit mistakes, not sensitive to criticism
• Speak and write well
• Understand self
• Persuasive, understand motives of others
• Goal Oriented
• Low need for approval, but give approval easily
• Decisive, but disciplined
• High energy and drive
• Humble

Just saw a short YouTube video about Success from Richard Saint John at a TED conference.

Here’s a recap of what it takes to be successful:

1. Passion – love what you do

2. Work – it’s never easy

3. Focus – you can’t do it all

4. Skills – get better at what you want to do

5. Push – yourself

6. Ideas – stand out by taking what you learn and repurposing

7. Serve – add value to others

8. Persist – keep getting up until you reach your goal

This is a URL to the video

http://bit.ly/AFksc

The economy is in a tailspin. People aren’t spending. Companies are going bankrupt. This recession has no end in sight.

Those headlines are true. Times are tough. But you still need to get business. That means you need to still market and sell.

If you can afford it, there are great bargains in advertising. Times are just as bad for companies that live off advertising than for others. In fact, advertisers may have it worse than many other industries.

You can advertise in almost any medium, print, radio, television, for a fraction of what it cost only a couple years ago. Using advertising you still stay on the minds of people, even if they are not buying nearly as much as they did before.  It still may be a smart move because once the economy does improve and people begin spending like before, you are on their mind and they will think of you first.

Many small business owners, however, don’t have enough saved up to advertise. But they still need to market if they expect to sell.  Here are some less expensive ways to market – I say less expensive because what you don’t spend in dollars you spend in time:

1. Network, network, network.  Make sure you meet lots of people and they know what you do.

2. Pick up the telephone and call. Even if your current and prospective customers aren’t buying yet, make sure you keep up the relationship so they will keep you in mind when things turn around. Ask if they can refer you to someone who may be buying.

3. Social marketing is all the rage: Facebook, LinkedIn, Twitter and others are all the rage right now. They are turning other forms of communication on their heads. Do you understand them? Do you use them?

4. Make sure your website is current and easy to use. Find ways to get people to it – there are lots of inexpensive ways to do that.

There are lots more, but these should get you started….

Steve

In times of historic change, it’s instructive to look at some facts:
• The stock market is down 50 percent.
• Banks are in trouble and have curtailed lending.
• Commentators predict widespread industrial bankruptcies.
• Unemployment is rising fast.
• Interest rates are volatile.

It all sounds familiar. But those headlines aren’t from today. They’re from 1974. Doomsayers foresaw disaster 35 years ago, predicting hundreds of corporate bankruptcies.

Mike Milken writes the facts above in an article to show things may be bad, but they will inevitably bounce back.

Are you going to be ready when they do?  Is your small business prepared, to take advantage. What are you doing to get by, and what will you do when the times get better.

Will it still be around when the economy recovers? If in doubt, you definitely want to read the 8 Survival Secrets posted earlier in this blog.

To read all of the Article by Mike Milken, go here: http://www.mikemilken.com/invitation.taf

Steve