Ideas To Deals

Put Yourself Beyond the Possibility of Defeat

Have you been watching the news and seen where the economy is showing signs of recovery?  I'll admit it appears the economy may have hit bottom but how quickly will we see it begin to move up?  I would say we are in more of an "L" shaped recovery than a "U" of "V" shaped recovery.  Sure companies that have been putting off purchases are getting to the point where they have to start buying but sales cycles are being still stretched as companies try to manage cash flows and extend scarce resources. This is still a critical time to be strategic, now is not the time to take you foot off the gas and coast.  

Even though I run the risk of going all Gordon Gekko in Wall Street on you, here are some lessons from "The Art of War" that may help your business. 

"True excellence is to plan secretly, to move surreptitiously, to foil the enemy's intentions without shedding a drop of blood."  Strategic thought and preparation is what will move your business forward.  Where is the market going and how do you position your business to be there?  I've often heard that Wayne Gretzky was such a great hockey player because he could see what was going to happen two to three steps ahead and he could position himself to be ahead of the play and the other players.  You need to do the same thing.  Where do you want to be in 12 months...36 months...60 months?  

"Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated."  Knowing your business, knowing your capabilities, knowing your market, knowing your customers, knowing what you have to offer will allow you to proceed with confidence and make the best decision for your business. You need to touch and re-touch every relationship in your business to build your knowledge.  I have seen examples of long standing business relationships that have gone out the window not because of performance problems but because of budget problems on the other side.  Knowledge allows you to make the best decisions for your business and not make mistakes.

"Hence the skillful fighter puts himself into a position that makes defeat impossible and does not miss the moment for defeating the enemy."  Another critical relationship is with your bank. To often small business owners feel that they are the weaker player when it comes to their banking relationship but that is not true. Be proactive and go meet with your bank.  Ask the tough questions about THEM and their status.  Know what they are looking for and what their appetite is for various types of loans.  Take this information and and use it when you are ready to go for financing. 

"Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterward looks for victory."  Preparation is the key.  Good entrepreneurs are not risk takers, they are good are recognizing risk and mitigating the risk.  Preparation reduces risk. Preparation leads to success.

Don't Be Stupid...Do the Opposite

I was meeting with Tom Williams, CEO of InnoGage, and he mentioned that Microsoft's guidance for it's employees for using social media is..."Don't Be Stupid".  That got me thinking about early stage companies seeking investment capital.  Companies can do all the things right to be successful in raising capital and it can all go out the window if they do something stupid.  OK what if they think what they are doing is right but it is really wrong?  When you are seeking investment you need to do like George Costanza said..."Do the Opposite".  "If every instinct you have is wrong, the opposite must be correct."  Maybe a better way to look at it is to take off your entrepreneur shoes (the ones that make you think the business is a can't miss) and put on the shoes of the investor (the ones that need convinced the business can succeed).  What would you want to see in a plan or presentation? Investors are looking for reasons to say  no sooner rather than later.  The quicker they can find a reason to say no the quicker they are on to the next deal that might be a yes.  

Aside from the obvious things (insulting the investor's mother, kicking their dog on the way into the meeting, etc.) here is a list of stupid things not to do when raising capital.

• Asking the investor to sign a Non-Disclosure at the first meeting: The first meeting is a get-to-know meeting.  You need to generate interest and get to the next meeting.  You don't need to reveal the secret sauce at the first meeting.  Once an investor in interested they will gladly sign the NDA, until then, frankly it's annoying...next.
• Your total market is greater then the total population of the planet: Unless you are planning to scale and sell on other planets this could be a problem (I have heard this by the way)...next.
• Not being able to discuss the business proposition: If all you have is a technology and all you can talk about is the technology you still have a lot of work to do.  Investors are interested in the "deal".  You have to be able to articulate how you fit into the market, how you will succeed and how you will generate significant returns.  This doesn't need to be totally complete but you should be able to talk about the business of your idea of how it will work.  No saying "This is cool" is not enough...next.
• Not understanding what it means to scale a business: So many entrepreneurs think they can get to critical mass with one single investment then they are going to grow with internally generated capital.  Funding is like gasoline, it makes the business go and go fast.  If you really want to scale (Read "Go Big or Go Home" by Wil Schroter to learn what scale means) you are going to run out of gas with only one seed stage investment.  As an investor I want the car to go fast not stall out...next.
• Every dollar of investor money isn't driving growth: Don't tell the investor you want to buy office chairs, give money to charity, payoff existing debt, etc with their money. When it comes to non-growth activities the investor will tell you how they want their money spent...next.
• Creativity: Creativity itself is a great thing but not in your business plan and for sure not in your financial statements.  Good investors know what they want to see in a financial statement and their eyes go straight there.  If you have some strange way you have structured your plan and they can not easily find the information they are looking for they may think you are hiding something...next.
• Valuation: You need $250,000 to build a prototype and your valuation is $20 million, get real...next.

What you need to do is be smart.  Seek advice from those that have been there and done that.  Focus on how you are going to execute. Do your homework.  Be clear and concise.  If you feel the urge to do something stupid...stick to the opposite.

Small Business and Social Media ~ What Is Your ROI?

Anyone that knows me can attest that I am totally bought in to social media.  I have used tools such as Twitter, LinkedIn and Facebook to build the on-line presence of the SBDC as well as to meet some really great people.  I firmly believe that social media is an effective, inexpensive way for small businesses to get their message out and create a dialog with customers and prospective customers.  It's the new "word of mouth" marketing.  It is, however, easy for small business owners to get confused when it comes to social media.  Issues such as "What tools should I be using?", "How should the company involve employees in the process?", "What about security?", or the biggest question of all "How do I make time to be involved in social media?" all contribute to the confusion.  As a small business owner you should look at social media like any other marketing function.   The key is to approach it much like you would any other business decision...Return on Investment (ROI). 

Measuring ROI on social media can be made to appear difficult but it isn't really.  For small business the ultimate ROI is $$$.  Like most marketing social media should be a process that will lead to sales.  To many small businesses think social media will have an instantaneous and direct impact on the top line.  There needs to be a strategy involved.  Don't get impatient if you don't see an impact in the first week.  The worst thing you can do is to go out like a bull in a china shop and start hammering people with your product.  Having said that there eventually needs to be an impact.  Analytics are nice but if you aren't getting sales re-look at the strategy.

Before you start developing your plan determine what drives $$$ for you and how social media can contribute.  Like any other marketing initiative you need to create your social media strategy to reach your audience.  Don't just shotgun stuff all over the net. While social media is viral by nature there is work involved.  There are steps that lead from point A to point B to point C and eventually to the top line of your income statement. For example, I have used Twitter extensively to advance the mission of the SBDC.  I started by following some people and listening to what was going on.  I began to interact and got to know about people based on what they were doing on-line.  I didn't drive the SBDC down anybody's throat I just talked to people.  Over time this led to my getting together with people I met on Twitter either through Tweet-Up networking events or simply meeting for coffee.  These are not out of the blue "let's get together to let you know what I do" meetings they are meetings with people you already have a connection with.  It has created a warm prospect as opposed to a cold call.

Social media strategies will differ based on the type of business you have.  Social media for a store front retail and a B2B seller of industrial machinery will be different.  One business may need to drive traffic and the other may want to focus on developing a customer feedback mechanism.  Also, not every platform will deliver the same results and you don't have to be on every platform to succeed.  Here is a quick guide you can use to understand the basics of social media by Amber Naslund...Download Gettingafootholdinsocialmedia.  This will allow you to get a feel for what is what as you are deciding what makes sense for your business.

As you progress in the development of your social media strategy remember it is for business.  You still need to engage and dialog.  You still need to build real relationships.  Yes, you need to do everything that they teach in Social Media 101 but do it with the end in mind...$$$.  If you decide to engage a Social Media expert to help you with this make sure they are helping you reach sales. (Read this before you hire an "expert" to handle your social media positioning and messaging..."Is your social media expert really an expert? The Top 25 ways to find out.")  You can ask for help in design and implementation if you want but be involved and make sure it is meeting the needs of your business. Remember this is your business, don't blindly hand over control of the delivery of your message.

Finally, track progress of your social media strategy.  Calculate the expense associated with social media and compare it to the results.  You have to give social media some time to work but you should have milestones built into a plan that will allow you to assess progress as you go.  You should be able to calculate the impact on your business and make decisions on how to invest money and time as you move into the future.

What are some of the best ways you have found to determine the value of social media on your business?

Aspirin or Vitamin?

Aspirin or Vitamin...which is your business? 

Vitamins are a great supplement to your diet.  They help you have more energy and a stronger body.  They are good to have but if you don't take them you'll be OK. Aspirin is taken to relieve pain.  If you have a headache you are ripping up your medicine cabinet to find the aspirin.  So what is your business...Aspirin or Vitamin?

An aspirin business is one that solves a the customer's pain.  It is a must have not a nice to have.  In my last post on the business planning process I discussed the need to do market research.  Finding your customers' pain point and targeting it is the reason behind market research.  It is the difference between "Ready, Fire, Aim" and Ready, Aim, Fire".  Good market research will allow you to better identify your market and what customers really want from a product like yours.  By spending some time on research activities you have a better chance of getting your product right the first time and avoiding costly stops and restarts.  It will help identify early adopters that might beta test your product and helps you make a better case to investors when seeking capital. 

In one of my favorite business books, A Good Hard Kick in The Ass, they lay out a process for assessing the market:

1. Explore the Pain: Construct a Hypotheses about the market.  Create a specific case as to who needs your product the most and what the market looks like.  Gather data relating to the market by interviewing potential customers.  Find out who has the most pain and what these companies have in common.  Most initial hypothesis are wrong, that is the point of doing the research...find out in research where you need to make an adjustment not after you have launched.
2. Envision the Solution: More face-to-face interviews but this time with those that indicated the most pain and can help you better narrow in on the specific need for your product.  In this phase take the data from the earlier interviews and construct a "first-pass presentation" to show how you envision your solution solving the pain in the market.  At this point, in addition to the presentation, having an early prototype would better help illustrate your solution.
3. Establish Credibility: Now you are about 90 percent done.  Here you will go to "influencers" that can help you build credibility in the market and start to create buzz around your product.  By this time you will have a fine-tuned company presentation and a vetted solution prototype.  Get people excited and ready for your launch.

By going though this process you build what the customers want, not what you think they want.  You will identify the real pain in the market and be ready to attack it.  This may take some time and effort but it will be worth it when revenue and investment starts to flow into your business.

Planning Good ~ Plans Not So Much

I think as an SBDC business consultant I am supposed to tell people that they need to write a "business plan".  I guess I'm breaking the rules because I'm going to tell you Not To Write  Business Plan!  Many entrepreneurs think writing a business plan is an exercise to engage in only when seeking a loan or investors.  There is so much focus on the development of a 40 page, 12 point font plan that  the true purpose of a plan, to guide the operation of the business, is missed.  I've seen plans where the narrative and the financials did not relate to each other, as a matter of fact looked like two separate businesses.  Other plans I've seen are full of Gartner references but contained no real guidance on execution of the business.   The worst plans I seen are the ones that are sitting on the shelf in the founder's office covered with dust. More than likely all of these plans were written for the banker with no real thought as to using this as a document to drive the business. The problem with that is if a loan is made it is based in part on the plan.  If the plan is not followed and the business does not meet it's milestones the bank will be less likely to extend further credit in the future...or worse.

My advice is to forget about writing a plan and focus on the "Process of Planning".  Start with a blank pad of paper or flip charts.  Write something that you can embrace and use to drive your business, not as a paperweight or a doorstop.  You should develop a working, living document that will allow your business to reach the levels that you desire.  It should clearly articulate the steps you need to take as you grow the business.  I've heard that the keys to running a business are knowing "Who's out there to buy your product." and "How are you going to get them to buy it."  Maybe there is a little more involved than that but if you don't have the answers to those two questions down cold it's going to be a struggle. 

Here are some steps to consider in your planning process:

• Review Mission: Why does your business exist?  What are you doing this for?  Good businesses drive margin based on the mission of the business.
• Review Vision: Where do you want the company to be in 12 months, in five years?  This would be in many different factors: financial goals, role of the founders, employees, location, etc.  This will help you determine action steps to take later and help build your business direction.
• Do a Strategic Analysis: This will really allow you to determine where the business is and what opportunities might be available that you are not currently thinking of.  A good format is a SWOT Analysis.  For each of these you should list items that will impact future strategy:

• S-Strengths: Skills, distinctive competencies, capabilities, competitive advantages, or resources the organization can draw on to build strategy.
• W-Weaknesses: The lack of one or more Skills, distinctive competencies, capabilities, competitive advantages, or resources the organization can draw on to build strategy.
• O-Opportunities: Situations in which benefits are fairly clear and likely to be realized if certain actions are taken.
• T-Threats: Situations that give rise to potentially harmful events and outcomes if action is not taken in the immediate future ~ These must be actively confronted to prevent trouble.

• What products do you want to offer? This is a brainstorming activity where you can put anything forward.  Create a list of possible product regardless of priority at this point.
  
• Put some detail around the product offering: Take each product you want to offer and consider what those look like short-term and long-term.  Who is the customer? What do these products accomplish? Discuss ROI, revenue, expense (don't forget opportunity costs).
• Start to prioritize the products: Put the products in order of value for the company relating to the mission/vision and financial goals of the company.
• Do any of these products work together?  Think about the possible synergies created by coupling products into one offering. You might now decide to create one product that drives higher value than two individual products.
• Validate the market need for the products with database research: Research possible users/buyers of your products.  Find who is out there to buy the product.  Most libraries have research capabilities and databases that you can access simply by having a library card.  If you are in Columbus, Ohio check out the Columbus Metropolitan Library. 
• Validate the market need for the products with customer research: Get to the customers and find out what they think of your products.  This can take the form of formal focus groups or facilitated discussions or meeting with potential customers one-on-one to gauge their interest.  This is critical step because you are gathering the opinions of the market not just you and your buddies opinions.  An important note here, it doesn't have to cost a lot to do this.  You don't always have to have professional, paid facilitators...just talk to people.
• Layout Milestones/Timelines: You have to hold yourself accountable.  Develop milestones for taking your product to the market.  These milestone events might include: When can the products be launched based on funding, employee resources and timing for the market, etc. Take each of these milestones at least three layers deep so that you have detailed steps to implementation.  Once you decide what the milestones and steps are you need to develop timelines, answer the WHEN question.
• Execute: Take what you have done and bring it to life...Implementation and Execution.

Let's be clear, you can start/run a business without doing all of this.  The difference is the level of control over the outcomes of the business that you gain by going through a planning~implementation process.  I often have entrepreneurs come to me after being in business for awhile and want to "get serious" about moving their business forward.  This allows you to do that.  It also makes it easy to create a "business plan" for financing because you have all of the information needed, all you have to do is drop it into the right format.

Did I miss anything? Let me know your thoughts.

Quick Reflections on the Ohio Growth Summit 2009

The Ohio Growth Summit was held on June 10 at Columbus State Community College.  Now more than ever we at the Ohio Small Business Development Center were looking for ways to small businesses to find ways to ignore the economy and continue to take their businesses to the next level. The Ohio Growth Summit became a celebration of the  entrepreneurial spirit and commitment to making dreams become reality. The Summit features speakers, partners and networking specifically tailored toward small business success.

It's usually difficult for me to participate in the Summit sessions because I'm usually running around working on some aspect of the event but this year I was able to actually attend some of the sessions so I'm going to reflect on what I saw and heard at the Summit. 

The Tweet-up on June 9 went very well.  Mike Figliuolo of thoughtLEADERS gave a great presentation on personal and professional leadership.  I missed the beginning of the presentation as I was picking up Chris Brogan from the airport (his flight was delayed twice and canceled once, glad he made it). We did finally make it and I was very happy to see over 100 people there to kick off the Summit.

On June 10, the full Ohio Growth Summit began.  Jim Canterucci presented on Personal Brilliance for small business owners and entrepreneurs.  I had seen the presentation before but I told Jim afterward that I liked this one better than what I had seen before.  Jim had customized the presentation for the Summit attendees.   I really appreciated his effort in doing that.  Some speakers would just do what is in the can but Jim went the extra mile to make his presentation impactful...Jim ~ You're Brilliant.

After Jim finished we held four breakout tracks:

• Social Media ~ Your Customers Are There, Are You?
• How To Successfully Take Your Company Global.
• Invent, Build, Go To Market ~ Successful Product Commercialization Strategies.
• An Entrepreneurs Guide ~ How To Get The Bank To Say "YES".

I attended the Social Media track but took a few minutes to walk around and stick my head in each session.  We had engaged participation in each session but the Social media track had over 125 attendees.  Back in December I had lunch with Nate Riggs, founder of Social Business Strategies, and we discussed what would be key for small businesses to know about social media.  Many of the small businesses that we had been consulting with were not utilizing the tools.  Nate shared a concept of using social media to build activity above the sales funnel. From that moment on I knew I wanted Nate presenting on social media applications for small business and he did not disappoint.  The full track was great.  Chris Brogan told me we didn't need to bring him in to speak because Nate had it all together and did a great job.  Nate wrote two posts for the Ohio Growth Summit I wanted to share here: 

• Small Business in the Social Guerrilla Marketplace
• Social Media Practitioner Panel at the Ohio Growth Summit

The social media practitioners panel brought out four power users of social media ~ Lewis Howes, Angela Siefer, Cheryl Harrison and Alaina Sheer.  This is truly an All-Star panel that would match up with presenters from any conference in the country.  Be sure to click the Practitioners link above to read about each speaker and visit their site/blogs.

The closing keynote was Chris Brogan, President of new Marketing Labs.  Chris' blog, Chrisbrogan.com, is one of the top blogs on social media.  It is a go to for me on how to navigate the world of social media.  Chris is a rockstar of sorts in social media circles and I felt that he would be a natural to speak at the Summit.  I didn't know what to expect, I didn't know what kind of a speaker he was I just knew his content was great.  To answer the question...he is a GREAT speaker.  He was entertaining and kept the audience engaged and entertained through the entire keynote.  What I like about Chris is that he keeps things in perspective regarding social media. Social media is about being social.  It is about listening and being a "promiscuous connector.  When it comes to business only social media analytic that matters is $$$.  Chris couldn't have been nicer to deal with or more accommodating with his time. My favorite Chris Brogan quote was: "People that don't take risks are called employees".

I want to thank everyone that participated as a speaker, a volunteer or a sponsor of the event.  I mostly want to thank the attendees that took time out of their day to day battle with the economy to come out the Ohio Growth Summit.  Hopefully you got some much need ammunition to continue the fight and reach your business goals.

Are You Stressed? How About Your Bank?

After a brief hiatus I had to get back and blog about my favorite subject...Banks.  Yesterday the Federal Reserve released the results of their "Bank Stress Tests" or as they like to call it the Supervisory Capital Assessment Program (SCAP).  This was not a test of whether the banks were solvent (they all pass that as conditions are today) it is a test of whether they had capital to absorb losses if conditions worsen.  Only the top 19 bank holding companies, the so called "to big to fail" banks, were reviewed.  These banks hold 2/3 of the assets and and half of the loans in the country.  The test showed that if the economy worsened by the end of 2010 that the 19 banks could absorb losses of up to $599 billion.  10 of the banks reviewed were ordered to improve their capital position to increase their cushion against potential losses.  Of local interest PNC (owner of National City Bank) was ordered to increase their capital position by $600 million, Fifth Third Bank by $1.1 billion and Key Bank by $1.8 billion.  J.P. Morgan Chase was not required to increase their capital position.  Here is an interactive graph from the Wall Street Journal that compares the various banks in the test.  Note...smaller regional banks were not included in this test even if they accepted TARP funds from the government.  

This is the first time the government has positioned certain banks as stronger than other banks.  In the beginning of the TARP process there was no differentiation in getting funds other than the amount.  This was partially so that banks that needed funds weren't at a marketing disadvantage to those that didn't need funds.  In some cases banks were forced to take funds they didn't need (at least in their opinion).  Now there is some differentiation between those needing to raise additional capital and those that don't need to raise capital.

The major challenge to small business right now is that credit is still very tight.  The government is requiring additional capital now in case the economy continues to stumble into the future.  This will cause banks to hold on to their cash.  If banks are holding cash that means less money to lend, thus the credit crunch would continue.  There is a serious lack of working capital available for small business due to increased bank underwriting standards.  Companies that need new money are being stopped at the bank's doors and many companies are having their current lines of credit reduced or at least more closely scrutinized due to macroeconomic economic conditions.  While there are some signs that the economy might be showing slight improvement there is still much uncertainty around.  Many question whether the worst is over for the banks and feel that the commercial real estate market could be the next collapse.  Consumers are still not spending like they have in the past due to concern over job security.  Until the consumer starts spending the entire economic chain will continue to remain down. 

Now more than ever it is critical that small businesses are strategic in their thinking and planning.  Don't look out 12 months, look 5 years or more into the future.  Customers and products may look very different than they do today.  Know where the business needs to be and what will it take to get there.  Small businesses need to do everything they can to foster innovation in their operations.  It is important maintain, or grow, the intellectual capital in the business.  It is this push toward business innovation that will allow the small business sector to survive and lead the economy out of recession.

Small Business is the Heart of the American Economy

"Small Business is the Heart of the American Economy" is how President Obama referred to small business in his speech on March 16.  The President outlined a plan to increase liquidity in the secondary market for Small Business Administration (SBA) loans by using a portion of the TARP funds to purchase SBA loans from banks.  This would allow banks to make loans, sell the loan on the secondary market and use the funds they received from the sale to make more loans.  This is critical.  As I have said before, banks need incentive to lend.  Increasing access to the secondary markets, increasing SBA guarantee levels to 90 percent and reducing fees could provide some incentive to banks to increase lending.  Having said that, the reason that some banks are in trouble is not due to the activity of the small business commercial lenders.  There are credit and underwriting standards that must be met for banks to make commercial loans.  These underwriting guidelines have tightened not because the banks don't want to lend but because the economy has worsened.  Banks employ calculations that show that a certain percentage of businesses will fail at various levels along the continuum of scores. More businesses, even if they have spotless credit, are falling into the danger zones of default within the bank calculations.  This is why credit lines and loans are being called.  While the President's plan is certainly a step in the right direction, the economy must improve in order for banks to begin lending again.

In a Wall Street Journal article on the President's proposal (U.S. Proposal Aims to Aid Smaller Companies) the primary criticisms of the plan are that many firms don't use SBA programs to obtain capital and that the plan does not do anything to support high growth technology firms who typically are unbankable in their early development due to lack of hard assets.  I think both issues are valid but the President's plan is a good first step using one tool that the federal government has, the SBA, to begin loosening credit.  Next steps for the administration should be to look at ways to increase "cashflow" within the business.  Part of the answer will be found by addressing the rising costs of healthcare coverage and tax policy.  Both have significant impact on cashflow. 

As it relates to high-tech firms a possibility is to institute programs at a national level similar to the Ohio Technology Investment Tax Credit program (OTITC) and the Innovation Ohio Loan Fund.  The OTITC program provides a 25 percent tax state credit on private equity investments by individuals who invest in Ohio companies.  The Ohio Innovation Loan Program looks at a variety of possible forms of collateral, anything that can be capitalized under Generally Accepted Accounting Principles (GAPP) which allows tech firms to secure loans.  I have seen both programs increase access to funds to clients we work with and I'm sure that if implemented on a national level would have a positive impact on the growth of the small business sector.

Role of the SBA in the American Recovery and Reinvestment Act

On February 17, 2009 President Obama signed into law the $787 billion American Recovery and Investment Act also known as the economic stimulus package.  While it will take awhile to fully understand the impact this legislation will have on small businesses here is what we know is in the bill relating to the Small Business Administration (SBA):

The bill provides $730 million to the SBA for changes to the funding and investment programs:

• $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
• $255 million for a new loan program to help small businesses meet existing debt payments
• $30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
• $20 million for technology systems to streamline SBA’s lending and oversight processes
• $15 million for expanding SBA’s Surety Bond Guarantee program
• $25 million for staffing up to meet demands for new programs
• $10 million for the Office of Inspector General 
• The bill also authorizes refinancing for certain SBA loans so borrowers can expand their businesses on favorable terms

If nothing else there seems to be a concerted effort here to allow small businesses some breathing room to deal with effects of the economic collapse on their operations.  The question, of course, is how will this change the way that banks look at small business loans.  One key to remember is that the SBA typically does not make direct loans.  They will provide a guarantee on commercial bank loans so the banks need to step up and lend. Will this be enough to get the banks to loosen the underwriting standards that were tightened to the point of cutting off credit to small business?  This remains to be seen but at least it is a good start.

Click Download 09-10 SBA-Stimulus Bill to see the full press release from the SBA on the Stimulus package.

Seven Things You Should Do In Your Small Business To "Thrive" In 2009

A while back I was tagged to post seven things people might not know about me.  While I'm clearly a fascinating person, just ask my three year old son, I thought that it might be more interesting if I posted seven things small business should be doing, but don't know, to thrive in 2009.  Note...If you still want to see a list of things about me check out my Facebook "25 Things...About Me". 

Don't Overreact...Be Strategic: If you truly know your business and your market you can survive and thrive even in the down economy.  I know that it is a pain but a strong SWOT analysis can give you insights into your company and market that you may never have thought of.  You may see opportunities that are more attractive than your current market and may dictate a change in direction.

Drive Out Non-Essential Costs: Yes I will continue to push this because it is critical especially in down economic times.  What is done in your company should contribute to the bottom line.  You can control variable expenses in your business and you must to survive.  Expenses that are not moving the company forward have to be adjusted or eliminated...this includes personnel.  I have seen to many companies not make the moves necessary relating to staffing in a timely manner and have that come back to bite them.  Steps to take to decide on what kind of a move to make:

• Activity-Based Costing: Look at every activity associated with your business and what expenses are associated with those activities.  Are the expenses appropriate given your activity levels? 
• Look at Overhead and assign it to the products: Another component of activity-based costing is assigning overhead to the the product costs and building your pricing accordingly. 
• Reassign staff to "high-value" activities: This is an alternative to downsizing.  By realigning the work flow and the staff you may be able to maintain staff and increase productivity in critical areas.
• Reduce Staff: If after your analysis you have to reduce staff...do it now.  It may sound harsh but the company will be better positioned to survive if staffed appropriately for the level of activity than to try to hold on to staff for to long.

Outperform Your Competition in Market Research: Know your market and know your customer.  Just like a start-up, do your research.  Know who is out there to buy your product.  Is your market growing or shrinking?  Where are potential customers?  What do customers find appealing about your product?  Are there new opportunities out there?  A great first step in this process is to visit your local library.  Here in Columbus, Ohio the Columbus Metropolitan Library has numerous resources to assist you in the research process including on-line databases and trained professionals to guide you.

Double Check The Status Of Your Suppliers: Don't get caught off guard if your supplier goes under.  Spend time talking to your suppliers to gauge how they are handing the recession.  Look for opportunities to get better deals for cash payments, early payment, etc.  These options may provide a Win-Win for both you and your supplier.  Also, make sure you have contingencies.  Know where else you can get product if your supplier can't meet your needs.

Double Check The Status Of Your Customers: Touch and retouch your customers for two reasons ~

• To maintain their business.  If they are buying product you can be sure your competitors are calling on them.  Keep your product or service high in their consciousnesses.  Look for ways to create Win-Win scenarios with your customers just like with your suppliers.
• To assure they are able to continue to buy.  You may be doing everything right but if your customer can't pay on time or even worse goes out of business what will that do to your business?  I have heard horror stories of products or services being delivered only to have the customer go out of business and not pay (or at least not be able to pay on time).  If this happens what will your cash flow look like?

Be Ready To Buy...Your Competition: That's right be ready to buy your competitors.  As Jeff Shick, Director of the Manufacturing and Technology SBDC, says, "This is a target rich environment.  You can quickly eliminate a competitor, gain market share and talent through an acquisition."  Keep your eyes open and be ready to take advantage of the situation the economy is creating. 

Review Your Branding and Extend Your Reach: If you have done the other six things I outlined now is time to fill the gas tank and take off.  Invest in smart marketing and extend your brand.  A well planned marketing strategy will take advantage of multiple media including public relations, traditional media and social media to get your message to your customers.  Be aggressive and step up your sales efforts.  The worst thing you can do now is reduce your marketing/sales efforts (that's what those that hope to survive will do).  Make this part of your strategic plan and go forward.

This is a trying economy.  It is key that you take care of yourself, research, prepare and be ready to take advantage of opportunities that may present themselves.