Too much gloom and despair…it does not do us any good.

I make it a habit to ask business owners how they are doing where ever I go, as an interested  consumer. I is always amazing to me how willing business owners are to talk about their business to anyone who is interested enough to ask. When I go to a restaurant, or shop, at any store I am constantly checking the attitude barometer. Almost universally everyone is in he dumps, singing the blues, reporting and  projecting negativity, gloom and despair …

IT DOES NOT WORK!

It will create a self fulfilling result. If you think your business is in the dumps you will lead it into the dumps most assuredly because the following will occur.

The demeanor of your employees will be depressed and negative , taking  a cue from the owners and leaders. Your customers will sense the stench of defeat and will not want to shop or purchase services from you and your deepest fears will materialize…failure will breed in this environment, following your attitude.

Alternatively, I was at a great restaurant I frequent often last evening and noticed it felt a little less busy then normal for a Friday evening and I asked the owner how it was going. He reported ‘better then this time of the year last year’… He further said has beaten last years January numbers and again February was on track for a better month. He was confident, happy and projected success. It made me happy and  I felt more comfortable knowing the restaurant was doing well. It was a positive experience.

I have also been in restaurants recently that were a little less busy then usual and when asking the manager and hearing his report of despair, I did not want to eat there and had a poor experience.

Was it attitude? Was it a catchy thing like a disease spreading throughout the establishment projecting failure? YES!

So I say to you all, project success and it will come to you. Lead by action, and start with your employees. Even if revenues are down which you cannot hide from your employees as they know, you can still project an upbeat attitude, making all the changes you require to keep the business flowing and even if it means downsizing and overcoming some barriers and issues you can still  maintain a positive upbeat successful attitude which everyone around you will adopt be it positive or negative…your choice.

I say make it positive and reap the benefits. Project success and everyone will be attracted to the aura and come to your store. People want to go were the success is. They want to go to the party that is rocking not the one that is dead. They want to go to the place were they have fun and can forget the pressures of the downturn, they want to shop were people are enjoying themselves and high on the experience not were its one day away from closing the doors.

Financial reality can be bone crushing but attitude can change reality from bad to good.

Its the context you hold that will influence your demeanor and the ensuing effects it has on everyone around you. If the context is one of success…you will win, if it’s failure you will lose.

Tell the world you are doing well. experiencing little pain, making the adjustments required and growing through this recession and the market will respond accordingly and carry you to your goals.

Be the only one in your market claiming to be doing better and you will…do better.

Enough with the law suits, there are better ways to resolve issues.

We all know the old ‘saw’ that: ‘The only one who wins in a lawsuit is the lawyer.’

Expand that to include bankruptcy proceedings, as the only ones who win in bankruptcy filings are the lawyers and secured parties, and certainly not the bankrupt petitioner.  So if this is all true, why do so many business owners end up in lawyers offices, and waste enormous amounts of time and money relying on the courts to resolve issues that we should be able to resolve ourselves?  A question worthy of consideration.

Let me start by saying that some issues do require court intervention and resolution, some…very few…a rarity, but occasionally the facts are such that it requires the legal process to resolve the problem…rarely.

Frankly resorting to lawyers is typically an emotional response to resolving a problem.  It avoids direct confrontation which many are adverse to, and it is hiring a fighter to fight for your rights, hardly a path to meaningful resolution.

Resolving a problem requires compromise.

Another truth about this issue is that a great conclusion is reached when both parties feel they got beaten.  When both parties compromise adequately and are both unhappy with the resolution but willing to accept it, then the resolution was fair; that’s a sure sign of a good job at resolving a problem.

Resolving a problem is not about which party is right, but what compromise can be made to resolve the issue quickly, with the least expense and with the least interference with ongoing business.  The best answer has fairness for both sides not a lopsided victory and a devastating loss for one or the other.  Typically both sides have some merit to their position.

The legal process takes time, money, and little direct communication between the parties.  The nature of hiring lawyers imposes a combative process which costs a fortune and takes forever…whats the real point here?  What will be resolved?

I frequently hear plaintiffs claim they won the battle but lost the war, due to the cost in time, money and PROGRESS, as the litigants focused more on the litigation than on business development.

Can you do it alone without help?  Possibly not, but does that mean that the only help you can get is from litigation lawyers who will reduce the resolution to  a fist fight -or litigation?

Some lawyers will make every effort to negotiate a resolution.  Many are more committed to winning the most possible for his client…believing that it to be is his job and mission and thus the ‘all for me and nothing for you’ attitude, which does not work.

The additional problem with lawyers is that it removes the two who HAVE the issue from the discussion and replaces them with two professionals, trained gladiators who are charged with beating each other to a pulp -all done with billable hours.  They have nothing to lose and everything to gain from prolonged battle.  I am not suggesting that they intentionally waste your time and money for their own gain, but I AM saying that such a system promotes needless expensive time consuming battle, and prevents meaningful compromise.

We all know that this is true, yet far too many resort to their lawyer when problems occur.  We must find alternative methods for resolution including direct discussion to resolve the issues.  It can be done.

Get help if you need to, but help to compromise -not to litigate. Call me, Norm will arrange a no obligation tele-conference.

Social Media works in the business arena….get with it, ask your kids about it.

We have spoken about the power of the internet and its use as a business tool before. We all have web sites and many are enjoying the benefits of bloggs and video attached to our web sites. The next wave being promoted as a viable business tool is the use of social media. Its allot more subtle a tool, as it resists direct marketing efforts but if used effectively it can provide huge impact on the marketplace. Below is a chart compiled by MarketingSherpa. Check it out. It is screaming ‘use me…’

Though Vertical Response reported a few months ago that 85% of start ups and 75% of established businesses use social media tools, many business are still slow to adopt social media marketing strategies.

MarketingSherpa has now released an interesting chart, see below,  looking at where businesses find social media to be most effective. This is based on a survey fielded in December.

These are some interesting stats. Clearly the effectiveness of social media far outweighs ineffectiveness. Over 90% of companies believe social media is most effective in building brand reputation and awareness as opposed to direct marketing strategies.

“You might expect the revenue-producing goals of direct marketing to rank higher than branding during a recession,” says MarketingSherpa. “The conversational and relationship-building nature of social media, however, is more synonymous with PR, which is more likely to help accomplish branding goals.”

Still, the direct marketing potential is nothing to shake a stick at. The chart illustrates wonderfully that there are a variety of ways your business can benefit by using social media.

The major point here is irrespective of what your specific goals may be in utilizing social media tools like Facebook or YouTube, Twitter, Linkedin etc, as a business tool,  they apparently reach the market very effectively and influence your customers  actions and opinions.

Check it out, if you are unsure of what this is all abut ask your teenage son or daughter they will explain it to you…

Data compiled from online articles, by Chris Crum.

Renegotiate your lease….you have no choice, nor does your lessor.

I recently posted a blog entry suggesting that everything you do is subject to renegotiation. Today’s economic and business conditions are so radically changed from the point in time previous agreements were entered into, that a  re-negotiation is not only prudent but absolutely necessary for most of us to weather this economic downturn. Payroll, supply contracts, loans, and  yes leases amongst a few likely targets must all be reconsidered.

Leases are particularly sensitive to this issue as what was reasonable yesterday may be completely impossible today. With revenues plummeting all over the country, rents must follow suit. The landlords are aware of this and the tennants are lining up demanding relief or alternatively being forced out of business. The landlords are faced with the difficult decision to reduce rents or look at vacancies they will not be able to fill for a long time. They are renegotiating lowewr rents to keep  tenants in business and paying something rather then receiving nothing at all.

A quick scan over the national business scene reveals some leading examples such as the following:( From Mish’s Global economic trends, a blog).

For example, Pier 1 Imports, Inc. (PIR) on Feb. 3 announced a plan it described as designed to “meet the challenges of the current environment and to position itself for optimum performance in a post-recession economy.” The furniture and home accessories retailer said it has already begun, via the services of Melville, NY-based DJM Realty, to open talks with landlords to “achieve rental reductions across the chain.” The company then warned that if such rental reduction negotiations were unsuccessful, it would terminate the leases of up to 125 stores.

Gap isn’t just trying to reduce rent paid for its stores, it’s trying to do so by reducing its store square footage by 10% to 15%, which also results in additional vacant space for landlords. In its most recent quarterly conference call with analysts, Gap Chairman and CEO Glenn Murphy, commented on the casual apparel retailer’s progress in negotiating with landlords.

In a Jan. 15 management presentation, women’s apparel retailer Chico’s FAS announced a formal real estate strategy to “pursue occupancy cost reductions” in order to increase profitability and productivity. Management is conducting a store-by-store review of the chain’s lease portfolio, ranking opportunities based on the level of success it expects it could have in rent relief.

Sports footwear and apparel retailer, The Finish Line, issued a warning in its January conference call that it is “willing to close unprofitable stores in cases where it can’t mutually agree” on terms with its landlords. Like others, Finish Line has commenced negotiations with landlords to downsize some larger stores, as well as “negotiate terms that work for both us and our landlord,” said Steve Schneider, president and COO.  ”In those cases, we’ve been batting a pretty high percentage…of getting the landlord to come up with the minimal lease terms that make sense for both of us. In many of these cases, what may happen is that we push the kick out clause one, two or three years and go to some kind of alternative rent,” — usually percentage rent or a lower number, he said.

Schneider said that Finish Line planned to close 20 to 30 stores over the next five quarters, but warned, “If the landlords get really difficult then that number could go up some.”

While these chains have significant economic clout and thus strong negotiating positions, I believe the principle remains intact for every business. The landlords must face reality as must the retailers and oher service providers. Bringing the overhead equation in line with revenue expectations is neccesary for everyones survival.

Call your landlord, re-negotiate your lease or break the contract and leave.  You have no option. Call me if you want some help. Call Norm, 413-584-2581. He will arrange a no obligation tele-coference.

Your relationship with your banker with a defaulted SBA guaranteed loan.

It is very important.

Your relationship with your banker must be understood and worked effectively for your own best interests. In a defaulting situation with an SBA guaranty, you will at some point be making an Offer in Compromise to the SBA to workout your guaranty. They have he right to attempt tpo collect more themselves on your guaranty before they send you to the SBA, sort of double dipping as it is about your personal guaranty.

The application is delivered to the SBA through your banker and while your banker does not make final workout decisions, the SBA will ask for information and the bankers opinion regarding the entire matter as well a some detail.

It is my belief, based on many experiences that this opinion is very important and has great weight. Thus it behooves you to understand this and in the light of a very difficult situation, default and liquidation of your  business assets, it is necessary to manage this relationship as best as possible. This does not mean or require submission to the bankers every whim or order. In fact you may be best advised to resist his directions and do what is best for you.

However it does require you to communicate clearly and effectively but what you communicate and when you communicate will certainly be controlled by what is in your own best interest.

The important point is you must be pro-active with your communication, polite and honest, even if you disagree, but you sill must maintain the best relationship possible under the strained circumstances of default and liquidation.

Remember the bank has agreed to ‘exhaust its legal remedies to liquidate the collateral’ and the bank has no wiggle room here at all or it jeopardises its guaranty from the SBA, which the banker will not want to do.

In fact I find that in its effort to honor this directive, the bankers tend to be quite exuberant and usually over reacts to make certain it satisfies this requirement. Thus they appear to be unreasonably quite aggressive, and can raise your ire from their apparent unreasonableness resulting in an unworkable relationship which is not to your advantage.

Also remember if you are a reader of this blog you will know that there are effective workout strategies we can employ to protect your assets and reduce your debt and thus there is no need to ‘fight fire with fire’ instead we will intelligently work the matter out to everyone’s satisfaction as we ignore the bankers demands and implement a better result while maintaining a great relationship with the banker as this serves your needs well.

This is a very tricky negotiation, call Norm he will arrange a no obligation tele-conference for us. 413-584-2581.