What a terrific time to plan and implement a growth plan.

Look around… some of your competitors have gone out of business. Most, if not all, of those remaining are responding in the same knee-jerk manner they’ve used in the past when revenues dip—they reduce advertising and marketing. The market is down, they observe. People aren’t buying, they think, so they advertise less, telling themselves this will save money. Since the market is soft it will not work anyway so why waste the cash? Their plan is to “wait it out” and when everything returns to normal, resume their regular marketing.

What a classic mistake.

I recently spoke to a small business owner who operates a general printing company. He bought the company a few years ago just as the recession began. Revenues were $450,000 when he acquired it. Despite the recession, he correctly figured he could gain a larger share of the market by  reinventing his mission and aggressively advertising and marketing his services, taking business away from his competitors who were hiding out.

He created an expansive strategy, marketing his capabilities to increase businesses revenue through direct mail campaigns and by utilizing other printed marketing tools. He stopped selling printing and began selling the promise of success, revenue, and additional profit to business owners all over his region. He invested significantly in printing, mailing and promoting his new direction and it paid off. The business came to him. He drove his revenue up to over one million dollars in two years and made a profit the entire time. He grew his business in a down market by taking business away from his competitors, aggressively reinventing his business and marketing his message successfully. His investment paid off.

Follow the leader, it works. Learn and act. Indecision, inaction and doubt kills the warrior.

Downsize, reinvent yourself, do your debt workouts and promote your new business. This is the path to take. Call us for help. We will gladly show you the way. Call 413-584-2581 and Norm will arrange a no-obligation teleconference for us to discuss your options.

Leasing is simply a slightly different form of financing. It is true that when you lease, you do not hold title to the item until the end of the lease when you often have an option to purchase the equipment for an agreed upon amount. However, this does not change the reality that the equipment is worth decidedly less than the lease payments indicate, and the lessor does not want the equipment back for reasons similar to those of the banks that will engage in a workout. The cost of liquidating the collateral and the resulting revenues are usually much less than the amount owed, thus there is a basis for a workout. It is usually a tougher workout, sometimes not quite as reduced as with a bank, but it’s still a terrific deal for the lessee.

If you are laden with leased equipment and choking on the payments, call us. We can negotiate a workout that will reduce your monthly overhead significantly as well as add value to your bottom line. Do your debt workouts, even with leases.

Call us. Norm will arrange a no-obligation  teleconference for us to discuss your options: 413-584-2581.

So, why not add another level of experience to the business lives of your employees? Why not raise the bar even further and up the ante? Why not dare to give your employees even more reasons to love their work, more reasons to want to come to work, more reasons to do their best and love their job?

Find ways to add ritual and ceremony.

This is tough, I understand, but so is business and so is life. Let’s pay hard, let’s work hard—and let’s give both value. Ritual and ceremony binds communities together, creates the common heritage, creates legacy. We find it in our religious practices, our fraternal organizations, clubs, within our families and the families of our workers. Ritual and ceremony enrich our lives, deepen our culture and add to the beauty and meaning of our lives. Why can’t we have ritual and ceremony in our workplace?

How do we do this? A very good question, and I do not have an instant answer. Perhaps your employees can answer this query. Perhaps with a little leadership, some direction, some fearless employees will take the risk of creating some ritual and ceremony. Perhaps it begins with annual awards. It could possibly be part of your Christmas celebration, or other holiday parties or maybe during your summer picnic.

What if you have none of these events? Then you’re lagging behind. Get with it—it is a new world. Be a leader and an innovator, dare to take your people to the next level. Yes, it is daring, bold, imaginative, uncomfortable and risky… yes, exactly where you need to be.

Lead the way and your people will fill in the blanks and make it happen. This will enrich everyone’s life. This will help your bottom line in unmeasurable ways.

The CEO, owner or whomever is “in charge” must be involved in sales activities.

The old saying remains…”Nothing happens until something is sold.” Unfortunately, this is not altogether true as much happens whether or not anything is sold and it all costs money. Payroll, fixed overhead, work-in-process, advertising, marketing, debt service, etc. What is really meant by this saying is that nothing productive occurs until something is sold, or, in even more basic terms, no sales = no revenue. No revenue = no business.

That is the basic lesson: No sales = no revenue = no business.

There is nothing more important than the sales effort and yet I see many small business owners delegate the sales responsibility to another, preferring not to be involved in this aspect of the business, rather choosing to allocate it elsewhere. Here’s a simple rule: If you are destined to be a business owner, then you are destined to be a salesperson. This where the true action is. The success or failure of your business, while dependent upon many aspects, is certainly significantly determined by the success of your sales effort.

So much valuable information and feedback is gleaned from the sales process that it is fundamentally necessary for an owner (or CEO) to be actively involved in the process. There should be no better salesperson than the owner. After all, he should know more about his product or service than anyone, thus leading the way in both selling and training the sales force. The buying public wants to know who stands behind the business, whose guarantee is on the line, whose commitment to quality the product is bound to, whose word is behind this venture. The answer is always the owner, thus the owner must, and should, be on the front lines selling his product, putting his name on the deal and standing behind what he offers and delivers.

There is no better place for the owner to learn what the response is from the market firsthand. To be successful, this is mandatory and can only be accomplished by putting oneself in the front line. Reports from the front line are not adequate; firsthand experience is the best teacher of all. Having information filtered through sales people is unreliable. Firsthand experience works. If you engage in the sales process, you will learn more about what the customers want, what the barriers are, how pricing is working, how you stack up against competition and on and on it goes. Additionally, you will be better able to gauge what your sales force should be accomplishing and which excuses for lack of sales are valid and which are not.

There are many excuses given for not doing this and all of them spell disaster. If you are not willing to engage in the sales effort, do not open a business—it is highly unlikely you will succeed. There is no way an executive can be effective if he is not involved in the sales effort firsthand and significantly. But beware, you must also be training others as once the sales process is better understood, the sales effort then should be offloaded to trained sales people capable of delivering success using the information and tools you have learned.

I suggest that the CEO, manager and/or owner always remain in a sales capacity, but possibly be reduced to occasional involvement when appropriate once the sales effort has been debugged and launched once the CEO/manager has established an understanding of it from firsthand involvement. In addition, understand that personal goodwill with your most important customers is an effective and valuable strategy for protecting your business if/when your sales manager leaves to go elsewhere, presumably with your accounts in tow. This won’t be much of an issue if you have significant contact with your major accounts. In other words, you’ll be protecting your business through firsthand involvement.

Simply stated, among your many duties, sales is most important for an owner of a small business. Do it—it is not as hard as it may seem. Let your passion and knowledge carry you.

I believe that this supports the decision to omit such information from a financial statement used for any external purpose such as loans or workouts. Since it is unavailable to the creditors, there is no reason to include it in one’s balance sheet or financial statement.

If you have a large retirement fund in a 401k and are simultaneously defaulting on a loan, it colors the minds and decision-making attitudes in a workout evaluation. This is only natural and thus the mere existence of a 401k affects the outcome of a workout—this is not what Congress intended. In fact, if this is allowed to occur, if the mere existence of one’s 401k causes a different conclusion in a workout scenario, then it has, in fact, been materially invaded and partially liquidated as the resulting implication is that it should be used to increase the workout payoff. This is wrong.

In conclusion, I believe it is inappropriate to include your 401k on your financial statements when presented for a debt workout and when asking for debt forgiveness.

The banks consider it just a matter of numbers. They are not concerned about the effect foreclosure will have on you, your family and the families of your employees. It is of no importance, or even relevance, to them and thus they are not listening or paying attention at all to the plight you all find yourselves trapped in.

Is it important? Does anyone care? Is anyone interested in what is happening to small business owners trapped in this recession? Not the banks, that’s for certain, but we are listening, we care and to us, it is important, very important. We understand that this is not just about numbers, it is about jobs and your family’s survival. Your family, and the families of the employees who are counting on you to provide them with a job to survive this difficult time. Everyone knows that when one loses a job in this economy replacing it can take a year or more, or forever, as many, many jobs will not return, ever.

Why do we care? Why are we interested? What good does it do for us to understand the situation if it is not relevant to the bankers or SBA?

A few reasons:

1) We are all people working our hardest, doing our best and fighting the same battles, mostly alone. We understand how lonely that gets and it is important for everyone to have an opportunity to explain what is happening to them and to get some inside advice. Frequently, the issues are far more complex than simply dealing with debt. Frequently, it is also about downsizing, reinventing yourself, figuring out how to not only survive, but also to prosper in this down economy.

We have a deep understanding about how to accomplish this and when we listen to our prospects or clients we are always listening with an inclination to help the small business owner overcome adversity, make right decisions and successfully navigate the turmoil they are confronting. It is not just about debt, it is about helping them overcome the issues causing them difficulty, helping them to restructure, adjust, downsize, and emerge, in addition to doing the debt workouts. Why do we do this? Because we understand what is at risk and what the real cost of failure is to everyone involved in your business and their families. We understand it’s not solved by debt workouts alone—it is about making systemic business changes to meet the needs of the transition.

2) We also understand that a small business owner in distress needs to vent and let it out. You need to talk to someone who listens, pays attention and supports. It is important—we all need this and we provide this whenever possible.

3) If we know what has happened to you we can include the important issues in our presentation to the bank. It may not be relevant to the workout but it is relevant to the listener as we are all mostly the same. We all have feelings and most have families. In conversation, without whining or complaining, if we can make the workout more personal and more about the individual, we can get some additional traction in the workout. It’s human nature to care and understand if information is appropriately presented. We can do this, the borrower in default cannot. It is important to make the workout personal to the banker in charge as when we succeed at doing this the results are better, often much better.

Thus, we listen very carefully and want to hear what has happened and what is at risk so that we can help direct you more effectively. We can give you the opportunity to safely vent and explain, and we can support your workout with the banker by making it more personal.

This works, we do it. Call us at 413-584-2581 and tell us your story. Let us help you succeed. Norm will arrange a no-obligation teleconference for us to discuss your issues and provide you with solutions… and listen to your story. It is important and relevant.

Why not take advantage of it and provide Fridays off during the summer? I do this in my office. We have all agreed to work an extra hour during the week, but we take Friday off. I was going to take Fridays off this summer and I decided that if it was good for me, it was good for my employees as well, so that is the policy I have implemented. Of course, our clients come first, so they have our cell phone numbers and should there be any “emergency” or necessity to communicate, we are quite available. However, for all intents and purposes, we have the day off. Three day weekends all summer and it is terrific.

Has productivity gone down? No, it’s up, actually. Is everyone happy? You bet. Are they working the extra hour to compensate? Absolutely.

So, what do I gain? A very happy workforce, both very productive and very committed. What did it cost me? In my analysis, nothing.

Obviously, this will not work for every business. Certainly retail cannot shut down for a Friday or a long weekend, and many other types of service businesses also cannot tolerate such a program, but some can. Those that can are often prevented from doing so by notions that such an act is costly and will reduce revenues. Not so. If  planned well and managed properly, it is a win/win for everyone.

We cannot be overly concerned about being generous. In the end, treating our employees better builds commitment, longevity and develops quality organizations. This is one way to add value to the job and to your business.

Not so. If this sounds familiar, then you need a dose of reality. You are wasting cash and gaining little advantage.

First, a basic concept: Default is default. Partial payments without a written agreement authorizing such are a waste of cash. They do nothing to improve your predicament nor the outcome. “Default” is a term controlled by your loan agreement; either you pay in full as agreed or you are in default. Partial payments outside of a written modification do nothing to alleviate or change this  situation other than to needlessly waste precious money better used for other purposes.

The underlying issue, however, is the need borrowers feel to act honorably and do what they believe is the “right” thing to do.

Stop this silliness. A business contract is not affected by acting honorably while you’re defaulting on the terms agreed upon. Despite your hope that it does count, it does not. As stated, default is default. There is no such thing as honorable default, it is simply default. A defaulting borrower will suffer the same consequences as a partial payment-making, honorable, defaulting borrower, so what is the point of making partial payments? There’s no point, whatsoever. It is not more honorable to make partial payments than to not pay at all. Remember, default is default. (If it makes you feel better, donate the money to charity; it will have the same effect on your loan workout as partial payments.)

The only way honor enters the equation is when you communicate appropriately, explaining to the bank you cannot make full payment. Cooperating with their requirements and not avoiding the issue—in other words, entering into a workout scenario—as soon as you are aware that you cannot comply with your agreement, that is the honorable thing to do. Partial payments are meaningless and represent avoidance of the real issue: acceptance of the responsibility to either pay or suffer the consequences, honorably.

Your remaining cash should be used for personal preservation and other appropriate necessary expenditures, not thrown at the feet of the bank with a request for leniency because you are “doing your best.” It’s not enough and requesting leniency will not have the desired result.

It is irresponsible to throw money away in a time of great need. To act honorably is to confront the issue as soon—and as honestly—as you can. This, you should do. Cease making partial payments immediately. Do the workout; that is what is most honorable.

I stood in line in at the Apple store in Manhattan when the iPad was first released, and purchased mine at 2:00 am. I was among hundreds of others wanting to get this item, hoping not to be shut out because none were left. “Limited inventory” got me to act.

My wife loves to shop on the day after Thanksgiving, a.k.a “Black Friday” because she will get bargains unavailable any other time, or so she believes. Thus, she will get up early and stand in lines to reap the benefits.

We all know how fast-food chains like McDonald’s, Burger King and Wendy’s bring back previously successful sandwich specials for a limited period of time which excites the market and spikes the sales. Customers are inspired to purchase a favorite because it will be available for a limited time only.

Only 100 available.

…for a limited time only.

…until the end of the month.

…the first one hundred customers.

This works. People do not want to miss out on a deal or an opportunity and when confronted with the possibility of missing out, desire to get in on the action and attain the goal item is increased.

One caveat: make it real. You can create any rules you want but if it is unbelievable, too incredible, it will be viewed as a scam and will alienate the public rather than attract them. So, be real when you do this. Follow the game plan and demonstrate integrity and the plan will work.

Scarcity inspires action. Try it.

Usually, this would only happen if the business is having difficulty paying its rent and thus forces the lessor to exercise his rights and end the lease for reasons of default. However, often there are other reasons such as a better tenant wanting the space, a large increase in rent that makes it unaffordable, or any one of a dozen other reasons that, in the end, result in a lost lease and a business forced out of business. What is the alternative? How does a small business protect itself against the indiscriminate actions of a lessor who has his own interests in mind, which may not serve the best interests of the lessee, you, the small business owner? This situation is a collision course on which the tenant always loses.

Another moment of truth occurs when a small business owner wants to sell his business and has a lease with a short-term remaining and a buyer wanting to renegotiate the lease before he buys the business, the success of the sale then being dependent upon a successful negotiation with the lessor. Not a comfortable position to be in, as the lessor will act in his own best interests, not those of the business owner. I have seen quality businesses in the process of a sale unable to close because the lessor would not cooperate with the transition. Total loss results. Nothing to sell without a lease in place on terms and conditions the buyer will accept.

One option that clearly will not apply to every business, but which is an alternative, is to buy your space. Own it, control it and control your destiny. In this economic recession, business condos are selling very inexpensively and other real estate opportunities exist as the market continues to melt down and prices drop. This solution is not for everyone, however, when it comes time to sell your business, owning the real estate gives you many valuable options such as selling the business and leasing the space to the new buyer. This works. Selling the real estate with the business equals added profit and additional opportunity to enhance the deal with added value. This also works.

Again, this is not for everyone but it is worthy of consideration. Examine local opportunities and see if you can find something that will work for you. Control your destiny rather than allow others to control it for you. Enhance your opportunity to sell your business successfully by controlling your real estate.

Think about it and explore your options; it may be a good move for you and your business.