Tag: small business

Is It Time to Be an Entrepreneur?

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Open Forum reports that there is an 11% increase in the number of small businesses closing and a 17% decline in the number of small businesses opening.

Get Busy Median reports 69% of small businesses survive at least two years, 44% of new firms survive four years, and 31% survive at least seven years. The Orange County Register states that new-employer businesses has fallen 27% since 2006, which means that startups—which, 10 years ago, would have created 4.6 million jobs—are only creating 2.5 million jobs now. Also, 10 years ago, the average new business opened with 7.5 jobs, and, today, it is 4.9 jobs.

Smart Money states that in 2009, there were 552,600 new businesses created, while 721,737 small firms closed or went bankrupt. They go on to report that in 2007, 75% of angel-funded deals came at the startup stage, while in the first half of 2011, only 39% of companies backed by angels were in the startup phase. This trend is just one more sign of how hard the recession has been on entrepreneurs. This recession has not only hurt sales, sending many small businesses under, it has also obstructed the ability to raise money for the next great idea.

So why would anyone in their right mind risk their money and reputation for only one-in-three chance of being in business after seven years?

Bloomberg Businessweek reported this week that the Walmart greeter job, which has been around for 30 years, has been removed from the overnight shift of its stores. Obviously, they will be using those hours more productively for tasks like stocking shelves or just eliminating the hours altogether. Every generation loses entire job categories—think milkmen.

So are today’s entrepreneurs desperate and opening a business because they just can’t find a job? Let’s hope not, because that is almost a guarantee your business will fall into the two-thirds that fail.

Clearly, you need a good idea, product or service before even thinking about opening up your own business. Assuming you have this great idea, then the next hurdle is [determining whether] you have the traits to run your own business. Some needed traits include being a self-starter, not getting intimidated easily, being adaptable to change, enjoying competition, being able to address risk, making decisions quickly and not seeing mistakes as failures.

[Y]ou [then] need to overcome the basics of starting a business, like cashflow (make sure you have at least six months of savings to live from), time management, a sound business plan and the ability to wear all the hats yourself.

Reading all these numbers and knowing you don’t have the equity now in your house to fund a business may be one of the most depressing things you do today, [b]ut the optimistic glass-half-full American entrepreneur doesn’t read these numbers like a normal human being. They say, “I am going to be in the one-third that succeeds, and I am going to make a lot of money doing it!”

DollarDays [is] just one small company doing our part to help grow the American dream. The rest of America needs to wake up and bring the small-business numbers back to where they were at the beginning of the 21st century. Banks need to actually begin loaning money again to small businesses. The government bailed out the big businesses and now must focus on building up Main Street again through backing small-business loans, giving tax break incentives and giving government contracts to small businesses. The average American needs to support their local small business rather than running to the big-box store. The numbers don’t lie. Supporting small businesses is an American team effort, and we need to get those numbers back to where they were—together.

Original article here:
https://www.huffingtonpost.com/marc-joseph/is-it-time-to-be-an-entre_b_1263541.html

64% of Small-business Owners Say Sales Down Due to High Gas Prices

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More than 64% of small-business owners polled say revenue is down as a result of increased gas prices, and more than a quarter of those polled say they will have to lay off employees, according to a survey conducted on DollarDays.com.

DollarDays, a subsidiary of America’s Suppliers, Inc., is a premier Internet-based product wholesaler to small businesses and local distributors. […] The company frequently polls its customers about topical issues as it relates to small businesses.

According to the results, 64% say revenue has decreased as gas prices have increased and 58% say their customers are driving less, which means fewer shopping excursions, and they say they expect it to worsen with the upcoming summer months.

“Unfortunately, this is what we expected from this poll,” says Marc Joseph, President and CEO of DollarDays. “With the recession and increasing fuel and food prices, being a successful small-business owner is incredibly tough.”

However, according to Joseph, as fuel prices increase, so does online shopping. As a result, one of DollarDays’ programs is helping their customers to create robust online stores to supplement their neighborhood stores.

“The Internet is a lifeline for small business,” says Joseph. “Just because a small business has a website, it doesn’t mean it has a shopping function or the right products. We offer our clients a one-stop shop for opening an online store, including the technology, products and consultants to help in both online and neighborhood stores. We want small business[es] to succeed, and if people aren’t driving to them, it’s imperative for small businesses to reach customers another way.”

Joseph suggests that a recent report from Reis Inc., a real estate research company, emphasizes the desperation small businesses face. According to the report, strip malls and other neighborhood shopping centers, typically home to small businesses, have a higher vacancy rate when compared to malls. In fact, Reis predicts the vacancy rate is expected to top 11.1% later this year, up from 10.9%, making it the highest level since 1990.

“Gas prices are expected to continue to rise, and we’re headed into the summer and hurricane months, where prices typically increase, so it’s no wonder there’s not much optimism. It’s a scary time.”

Survey results include:

  • Only 10% of small-business owners are offering financial supplements to help their employees as a result of increased gas prices.
  • Fifty-seven percent of small-business owners expect a decrease in tourism over the next three months, while 26% don’t expect a change and 15% expect an increase.
  • Sixty-seven percent of small-business owners have changed their personal travel plans as a result of higher gas prices.

Joseph says online stores are a great way for small businesses to expand sales beyond their neighborhood, and, at this point, he says, “the only loss is in not trying.”

About DollarDays
Founded in 2001, DollarDays is the leading supplier of wholesale goods for nonprofits, businesses and betterment organizations. By sourcing affordable products, backed by exceptional service and meaningful community engagement, we strive to inspire and empower our customers to accomplish their missions to improve the lives of people around the world. Recognized as the City of Phoenix Mayor’s Office “2018 Product Exporter of the Year” and Internet Retailer Magazine’s “B2B E-commerce Marketer of the Year” for 2016 and 2017, DollarDays is headquartered in Phoenix, Arizona. For more information, visit www.dollardays.com.

DollarDays Introduces SBA-backed Loan Offering to Help Small-business Owners

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This month, leading online B2B wholesale distributor DollarDays introduced a partnership with Superior Financial Group to help business owners secure Small Business Administration (SBA) loans. DollarDays is the premier online wholesale and closeout company that helps small businesses […] compete against chain retailers by offering more than 140,000 high-quality goods at prices close to those at which large enterprises purchase.

Through this new lending program, people will be able to access the application for a small-business loan ranging from $5,000 to $25,000 directly through the DollarDays website. The loans, provided by federally licensed SBA lender Superior Financial Group, are geared towards startups, home-based businesses and small businesses.

“With lenders giving preference to larger businesses with more assets, there are less dollars for small businesses like startups and mom-and-pop stores,” says DollarDays’ founder and president, Marc Joseph. “DollarDays’ main principle is about helping small businesses stay competitive with larger retailers, and this program offers a solution many business owners can’t find elsewhere. It’s an affordable way to help people secure SBA-backed loans of up to $25,000 and continue to grow and scale their businesses.”

There is no collateral required to secure a loan, and it is possible to get funding within days of completing the online small-business loan pre-qualifier application. There is no risk obligation, no prepayment penalties or balloon payments, so the loans can be paid off at any time. There are also special loans available for export business.

“We are excited to be teaming up with DollarDays and help provide much-needed capital to help small businesses grow in these challenging economic times,” says Tim Jochner, CEO of Superior Financial Group.

About DollarDays
Founded in 2001, DollarDays is the leading supplier of wholesale goods for nonprofits, businesses and betterment organizations. By sourcing affordable products, backed by exceptional service and meaningful community engagement, we strive to inspire and empower our customers to accomplish their missions to improve the lives of people around the world. Recognized as the City of Phoenix Mayor’s Office “2018 Product Exporter of the Year” and Internet Retailer Magazine’s “B2B E-commerce Marketer of the Year” for 2016 and 2017, DollarDays is headquartered in Phoenix, Arizona. For more information, visit www.dollardays.com.

Small-business Advice: Pay What You Wish?

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On the surface, it sounds crazy, but these days various types of businesses are experimenting with a format where customers are allowed to pay whatever they want for a service or product.

The trend has been going on for years, as can be seen in [a] 2007 Springwise trend-spotting article about restaurants in cities including Denver, Salt Lake City and Vienna [that allow] customers to choose their own prices (and sometimes even portion sizes). Today, it looks as if each of those restaurants is still going strong, which is some accomplishment in the unforgiving restaurant industry, especially in a recession.

Some of the restaurants in question do seem to have combined the pay-what-you-wish concept with progressive social activism, which may help them attract a clientele willing to engage in good faith and support the concept rather than freeloading and mooching of the proprietors.

In any case, the concept is not limited to restaurants. The best known example of pay-what-you-wish might be the opaque pricing site Priceline.com, where customers can bid for hotel rooms and rental cars by offering to pay whatever price seems fair to them.

Of course, Priceline is not a true pay-what-you-wish concept since there is a hidden price for each city or category below which rental car companies and hotel chains will not provide inventory. You can offer to pay $5 for a four-star hotel in New York City, but the hotel is under no obligation to accept.

On the other hand, Priceline does seem to have carved out a sustainable niche that allows customers access to good deals while also simultaneously giving hotels and car rental chains the ability to dispose of excess inventory without eroding prices across the board.

The question, of course, is whether pay-what-you-wish pricing makes sense in the big picture. A recent article on Inc.com’s retail blog by Tom Szaky, co-founder and CEO of TerraCycle, shows that the concept may have relevance for the general retail world. Szaky reported on his blog that TerraCycle had moved from a pure dot-com model into the brick-and-mortar retail world by opening a pay-what-you-wish retail store.

In defending/justifying his decision, Szaky pointed out that the concept has worked in other industries, including music, where bands like Radiohead have managed to make money by selling digital albums and letting users choose whatever price they think is fair.

The model may work best where the incremental costs of each additional product sold are very low or even nonexistent (i.e., digital content) or where brand loyalty (rock bands) is high.

On the other hand, one could argue that auction sites like eBay prove that retailers don’t need to set prices to make money. As long as buyers are operating in a situation of perceived or real scarcity, they will compete among themselves to set a price that may, in fact, be higher than what a retailer would get if he/she had set the price to begin with.

What do you think? Would you ever let your customers choose their own prices for some of the products or services you sell? Have you participated as a seller in any auction sites such as eBay?

Small-business Expert Interview: Peter Shankman, Founder of Help A Reporter Out

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DollarDays Blog is pleased to share the expertise of Peter Shankman, founder of Help A Reporter Out (HARO).

DollarDays Blog (DDB): Please tell us a little about yourself and HARO.

Peter Shankman: Since I founded HARO in 2008, it has become one of the fastest-growing social media companies in North America. Every day, HARO brings nearly 30,000 bloggers, reporters and journalists—over 80,000 news sources and thousands of small businesses—together to tell their stories, promote their brands, and sell their products and services.

Since its inception, HARO has published more than 60,000 journalist queries, facilitated nearly 7,000,000 media pitches, and marketed and promoted over 2,500 brands to the media, small businesses and consumers.

HARO is entirely free to sources and journalists. Unlike a majority of social media companies, HARO is independently owned and funded and has been profitable since day one. HARO’s tagline, “Everyone is an Expert at Something,” proves over and over again to be true, as thousands of new members join at helpareporter.com each week.

Beyond HARO, I would describe myself as an entrepreneur, author, speaker and worldwide connector. In addition to HARO, I am founder and CEO of The Geek Factory, Inc., a boutique marketing and PR strategy firm located in New York City with clients worldwide.

DDB: It sounds like HARO is meant mainly for reporters. What are the advantages for small-business owners?

Shankman: HARO provides small- to midsized businesses with 75% to 80% open rates on the ads that headline each of its thrice-daily email digests containing reporter queries. HARO also helps many small businesses directly market to their key audiences and make money. Everyone who receives the HARO newsletter must opt in, meaning they choose to receive the e-mail. The advertising messages are custom written either by [myself] or by a HARO family member and present the product or service in a fun and positive light that highlights its importance and utility. Furthermore, since HARO is a digital newsletter, hyperlinks are directly embedded within the message.

DDB:How can media exposure help a small business? Do you have any success story examples from your clients?

Shankman: Media exposure pushes a product or service into the spotlight, instantly gaining consumer focus and attention. The best way to demonstrate HARO’s success is […] by citing the successes of our users.

For example, Michael Jordan, owner of BullyStickDirect.com, called the response to his ad “overwhelming” and noted that he received about a 2,000% increase in website hits the afternoon his ad appeared and into the next day. Not only was HARO the most successful advertising venue Mr. Jordan had tried, he’s also used HARO to achieve additional visibility by getting quoted in a book and major publications simply by responding to HARO queries.

Another HARO user, Jason Sadler, has called his HARO ad the “tipping point” for his website, IWearYourShirt.com. Sadler said his first ad helped him sell two- to three-months’ worth of shirts in days, moving $8,000 worth of merchandise and generating “a ton” of press exposure.

DDB:Since HARO is itself a small business, what are some of the decisions you’ve made that enable HARO to compete with larger players?

Shankman: HARO was originally conceived as a Facebook group. Since Facebook caps group emails at 1,200 people, an e-mail newsletter was started. As HARO’s readership grew, HARO realized that there was great potential to include a simple, subtle and creative ad at the top of each message. As a small business of its own (HARO has only six full-time staff members), HARO has generated $1.4 million in revenue in 14 months. By utilizing technology and automatic distribution services, HARO is able to keep its overhead low while, at the same time, continually offering high yield ROI on its ads.

DDB: What are some of the best decisions you’ve made as a small-business owner?

Shankman: Hired people whose skills complement my own, listened to people I trust [and] ignored the naysayers I didn’t, believed in my idea, [and] listened to my customers and audience—[c]onstantly.

Frugal Living Tip: Sometimes It Pays to Spend

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We spend a lot of time talking on this blog about ways to save money, stay out of debt and live frugally. Living within your means is important, but it’s also good to have some balance in your life.

Over at Personal Finance Advice, guest writer Rebecka O. delves into the issue of excessive saving. In her article “Why I Don’t Save Money,” Rebecka shares a story about her mother who died with more than $1.5 million in savings—along with unfulfilled dreams of visiting Europe, attending a Broadway show, gazing at the Pacific Ocean and seeing penguins in the wild.

Rebecka says that her mother lived frugally and that she herself shared those frugal tendencies until her mother’s death, at which point she came to question the value of saving money if it meant missing out on longed-for experiences. So Rebecka devoted herself to fulfilling her most important lifelong dreams. In about six years, she blew through her entire share of the inheritance—about $300,000.

The responses by readers to Rebecka’s story are interesting in their own right. Some people questioned whether Rebecka should have spent the entire inheritance. Other readers were okay with her spending the inheritance but criticized her choice of even delving into retirement savings to fund her goal of fulfilling all her dreams. Several readers suggested that Rebecka should have sought some balance or moderation, splurging on some dreams while saving some of the inheritance.

[One reader of Rebecka’s post,] Pat Merritt[, shared] a nice story about [her] own experiences with saving and the satisfaction she has received from spending [those savings] on time with her family and a special artwork purchase. Here is an excerpt from Pat’s comment:

“You see, frugality is not just saving for retirement or a nebulous future that may not come. It’s also getting the things that you really want now. It’s a decision-making mechanism that lets you decide what is important to you and to set out and get the things that really matter.”

Do you agree with Pat’s definition of frugality? Do you try to minimize expenses in order to save the most possible money—either for a rainy day or to build an estate for your family? Or do you believe that money should be used sooner rather than later to fulfill your most important dreams? Or is some compromise path the best?

Small-business Advice: Save Energy, Save Money

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Last year, the government’s Cash for Clunkers program got plenty of attention for giving individuals financial incentives to trade in gas guzzlers in exchange for newer, more fuel-efficient replacements.

Cash for Clunkers was then followed […] in many parts of the country by other programs that promoted energy efficiency by giving rebates that encourag[ed] consumers to upgrade from old appliances to more efficient Energy Star-rated models.

Why should [the] government support efficiency programs? The idea is that everyone wins when the government helps consumers trade up to newer models of cars or appliances. Consumers get lower electric or fuel bills. Manufacturers are able to move products that would otherwise be harder to sell in the current economic climate. Governments benefit in a couple of ways—if manufacturers can stay in business, the government has fewer unemployed people to support, and if overall energy or fuel usage declines, the government feels less pressure to build new power plants or fuel refineries.

So how does all of this help small businesses? Well, as a recent article in the Small Business Trends blog pointed out, businesses, too, can benefit from government support for energy-efficiency upgrades. The article highlights benefits in several states, including California, where Pacific Gas & Electric Co. offers rebates of $10 to $125 for installing high-efficiency lightbulbs, and Indiana, where Duke Energy gives small businesses up to $50,000 in annual rebates for high-efficiency improvements to HVAC-type systems.

Even if a power company won’t subsidize the actual cost of upgrades, it might still help businesses figure out how to make improvements. That’s what Minnesota’s Xcel Energy does by covering most of the cost of heating-optimization studies.

The important thing for small businesses is to check for special offers and promotions in your state, city or local community. For instance, small-business owners in Austin, Texas, not only qualify for a general commercial rebate, but also an additional special 30% bonus rebate, plus a lighting program that covers up to 70% of installed costs.

Other small-business energy-efficiency grant and rebate programs exist around the country, from Pennsylvania to Arizona, where the state subsidizes up to 90% of incremental measure costs.

Rather than hunting all over the Internet, you can save yourself time and energy by using the handy guide from Business.gov that provides links to state and local energy efficiency programs for small businesses.

And remember—in addition to upfront savings from rebates or other forms of assistance from government and utilities, any energy-efficiency improvements you make to your business should end up helping your bottom line by reducing recurring expenses.

If you really go all out and achieve superior efficiency to the point where you’re powering your business with solar or wind energy, your efficiency could even become a marketing point among green-minded consumers. It’s a message that has worked for businesses from New Belgium Brewing to Horizon Organic.

Has your small business benefited from any government- or utility-sponsored energy-efficiency program? Or have you seen bottom-line savings from energy-efficiency improvements?

Small-business Expert Interview: Shel Horowitz

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DollarDays Blog is pleased to share the expertise of Shel Horowitz, ethical/green-marketing expert.

DollarDays Blog (DDB): Please describe your background and business expertise in a nutshell.

Shel Horowitz: I founded my own business in 1981 with a total investment of $200, of which $12 went for initial marketing. I am still in that business, although it has morphed several times and bears no relation to its original incarnation. These days, I break down the bulk of my work into these areas:

  • Marketing consulting, strategic planning, social media/PR strategy and copywriting emphasizing frugal, ethical, green approaches. My clients are primarily authors and publishers, small or micro-businesses, and nonprofits.
  • Helping unpublished writers become published authors.
  • Writing and speaking about frugal, ethical and green marketing and/or book publishing and marketing.

DDB: You describe yourself as an ethical/green-marketing expert. How does ethical/green marketing differ from ordinary marketing?

Horowitz: Ethical marketing does not overhype or mislead. I help companies find and harness the marketing value in the green initiatives they’ve undertaken [or] could undertake.

DDB: People tend to think of “green” anything as being more expensive and more complicated. Is that the case when it comes to marketing?

Horowitz: Nope. Done right, green and ethical marketing can cost less, build customer loyalty, open doors to strategic partnerships, and even turn marketing from a cost that brings in income only from its results into an actual revenue stream that brings in income through both the marketing itself and its results. For instance, you can get paid for speaking and writing, and those activities can lead directly to attracting more clients or customers.

DDB: One of your boldest arguments is that companies shouldn’t worry about marketshare because “marketshare doesn’t matter.” How can you say this? Shouldn’t small-business people be focused on becoming major players in their market? Or is this a comforting message for small-business people who generally don’t have the lion’s share of their markets, anyway?

Horowitz: Look at it this way. There are millions of people who need quality copywriting or who are trying to organize their thoughts into a published book. I can only serve the tiniest portion of them, anyway. If my calendar is full, what does it matter how much marketshare I have? This is true for all service businesses and many product businesses. The former CEO of Southwest Airlines criticized his competitors for chasing marketshare at the expense of profitability. Maybe it’s not a surprise that his was the only airline to stay profitable in the aftermath of 9/11. And yes, I think small businesses can take comfort from that.

DDB: Next year, you have a book coming out called Guerrilla Marketing Goes Green. First of all, please explain a bit about the definition and history of guerrilla marketing. Next, what does green guerrilla marketing look like?

Horowitz: Guerrilla Marketing is a concept invented by my co-author, Jay Conrad Levinson, in the mid-1980s. It’s the idea of being nimble in our thinking and our actions, seizing opportunities that are not open to big, cumbersome organizations that lack the agility to move fast. Guerrilla marketing is cheaper, more efficient, and makes it easier to build relationships with customers.

For instance, I can demonstrate guerrilla marketing in action by seizing this opportunity to tell your readers that they can get notified when the book is available by leaving their e-mail address at guerrillamarketinggoesgreen.com.

Green guerrilla marketing takes it a step farther: as consumers become more aware of issues like climate change, buying local and so forth, they want to patronize companies that understand these green priorities. The new book shows a whole lot of ways to use green principles and commitment to ethics in order to place your company front and center in the prospect’s mind, so when that prospect is ready to become a customer, you’re the company that gets seen as green. If the customer knows your company is concerned about doing the right thing, you are well-positioned to get the sale.

DDB: You claim that businesspeople can slash their advertising costs while seeing better results. How?

Horowitz: I discuss many, many ways to do this in the book and in my individual consulting. Here’s one of my favorites: find a company or organization that already reaches your perfect audience, and show that company why they will benefit from exposing that audience to your message.

DDB: Let’s say I am a small-business person who wants to try something green in my marketing efforts, but I don’t where to begin. Where should I start, and how can I get my customers to notice and to care?

Horowitz: Start with an initiative that not only wins your customers’ hearts and minds, but also saves you money. For example, the hotel industry has successfully positioned their don’t-change-the-towels initiative as a green move, but it also gave them enormous savings on energy, water and labor costs.

Small-business Advice: Getting Exposure Through Blogs

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Sure, it would be fantastic if your small business was featured on “Good Morning America” or in the pages of People magazine.

But let’s be realistic—the odds of getting covered in such a mass-market publication are low simply because of the massive level of competition for scarce pages or airtime. “Good Morning America”‘s producers need to attract the maximum number of viewers, and if it comes down to a decision between an interview with you or Brad Pitt, well, let’s just say that the bookies won’t be taking bets in your favor.

But, these days, there are lots of other ways to get exposure for your business, especially online, where more and more people are turning to business blogs for information, news and advice.

John Jantsch from Duct Tape Marketing has put together a good article for American Express’s Open Forum called “5 Tips for Getting More Exposure from Bloggers, Tweeters and Fans.”

John shows that with a bit of effort, your odds are good of getting covered in a respected, well-read business blog. One of his best ideas involves using sites like Digg, Stumbleupon and delicious to try to find up-and-coming blogs that aren’t yet inundated with pitches.

When you do find these blogs, John warns against simply firing off a press release and hoping for the best. The Internet is all about interactivity, participation and relationship-building. A far better approach would be to become a regular reader of the blog, subscribe to its RSS feed. If a blogger has a Facebook page, join [his or] her fan group. If a blogger uses Twitter, start following him [or her].

One of the best ways to show a blogger that you are an engaged reader is to make useful comments (not promotional fluff) and help stimulate conversation on [his or] her posts.

Finally, when you have established yourself as a credible and engaged reader, that’s the time to pounce and send along a brief pitch for a story, explaining why your idea would be a perfect fit for the blog and its readers.

Sure, such a strategy takes an investment of time and energy, but it could be worth it to establish yourself as a go-to source for a rising-star blogger. These days, the line is thinner than ever between traditional media and the blogosphere. Bloggers are invited to participate in White House news conferences and cover political campaigns. Blogs sometimes break major news stories that have offline papers scrambling to keep up. And since bloggers have an insatiable need for content, getting known as a valuable source of good story ideas could lead to extensive ongoing coverage for yourself and your business.

Also note that blog exposure can be especially valuable for companies that sell products or services direct to consumers via the Internet. A consumer reading a blog that mentions you or your company is just a few clicks away from making a purchase…

Have you had any luck getting exposure or sales through a blog? If so, what strategies did you employ to get noticed?

Small-business Expert Interview: Ray Silverstein, Author of “The Best Secrets of Great Small Businesses”

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DollarDays Blog is pleased to present the business expertise of Ray Silverstein, author of The Best Secrets of Great Small Businesses. Silverstein has also written a new book called The Small Business Survival Guide: How to Survive (and Thrive) During Tough Times. Silverstein also founded PRO: President’s Resource Organization, a network of peer advisory boards for entrepreneurs. As the founder of PRO, Silverstein has facilitated more than 1,200 “board meetings” over the last 16 years.

DollarDays Blog (DDB): Please provide a short bio and description of PRO.

Ray Silverstein: I created PRO in 1993 based on my success participating in peer advisory boards for larger companies. I wanted to help companies in the critical transition stage of doing to managing.

PRO provides the venue for small-business executives to obtain the experience, insight, imagination and critique of experienced small-business leaders. A monthly meeting with an experienced business facilitator and business leaders concentrates on issues of concern to the attendees in running a business on a daily basis. Emphasis is placed on working on the business and not only in the business. The discussion is candid, and a camaraderie is created between the participants to help each other. Survival and success are critical items of interest to peer advisory board members.

DDB: What are some of the key messages in your new book, “The Small Business Survival Guide”?

Silverstein: Cash is king. If a company is in a survival mode, the outlook is very short term—no survival, no long term. Survival requires the business owner to take action they ordinarily do not want to take but must if they want to stay in business. This may mean cutback of personnel, and only the best should be kept.

Management should have a complete understanding of break-even and the expenses that are necessary at break-even. This means an understanding of the different type of expenses involved in operating the business.

Remember that tough economic times are also opportunities. If a company is not in a survival mode, this is a great time to improve personnel, market position and take advantage of situations.

DDB: How can profit-and-loss statements mislead you about the financial health of your organization, and how can you protect yourself by projecting cash flow needs?

Silverstein: Again, the important point to remember is that cash is king. A company can make a profit and have cash go south due to increases in inventory, fixed assets and accounts receivable. Not being able to pay vendors, financial institutions or employees due to lack of money will put you out of business.

Financial institutions like positive cash flow and collateral. If you are in a service business, there is usually a lack of salable fixed assets—therefore, no collateral to support loans, [and], [t]herefore, only the cash flow of the business will support its ongoing activity.

DDB: You’ve suggested companies can write a “love poem” to their customers to get to the front of the receivables line on collections. Are you being serious?

Silverstein: The goal is to create a relationship and differentiate yourself from others with the accounts payable people. Everyone gets tired of being badgered for payment and may look with favor to someone who takes a different tack. This method has worked and was suggested by a PRO member. But, of course, a company can always take the “hard” line.

DDB: What is the best way to tell your banker if your business is in trouble—while still preserving a good business relationship?

Silverstein: A banking relationship is built on trust. You are better off being upfront and preserving the relationship. Bankers are more apt to work with those they trust.

But just saying you are having trouble is not enough. You must also propose an action plan that will resolve the situation. The plan must not be vague but as objective and quantitative as possible. You should also try to have measurable goals you will achieve, even if it is still a loss. The bank will want to know when you expect to have positive cash flow.

DDB: What are some of the most exciting opportunities that the recession and general economic turmoil offers for small-business owners?

Silverstein: The biggest asset a business has are its people. There are a lot of great people who are looking for work. Now is a time to upgrade your people. Companies that have the cash and fortitude are in a great position to enhance marketshare. In tough times, most companies cut back on marketing, but studies show that the companies that market now will grow faster after the economy turns around.

Times like these make businesses examine what they are doing and eliminate bad habits. This is a great opportunity to look at what your business is and, more importantly, what your business should be, then create the strategies to get where you need to be.

Does any of Silverstein’s advice ring true based on your own business experiences?