Female Small Business Owners: Where Are You?

We do hundreds of debt workouts for small business owners every year. One observation: most—make that almost all—are male-owned.

I have done the research and women are a driving force in new business start-ups. They are implementing more new business plans than men. Millions of small businesses are initiated and owned by women.

Here is a second observation: either they are infinitely better business leaders and experience little failure and, thus, do not require debt workout services, or they do not search the Internet for debt workout help, as I am getting very few inquiries from female small business owners. Almost none. Or, they simply do not want to call us.

Is this a form of prejudice? Female business owners do not want to ask male consultants to help them succeed? Is it possible that female business owners are uncomfortable asking men to help them work out their debt? They either want to do it themselves or ask other female professionals to support their debt workout issues? Could this be it? Is it possible that female business owners feel this would be demeaning, having to ask men for workout assistance? Do they not want to ask men to help bail them out of trouble?

I do not know the answer to these questions. I do, however, know that just as many female business owners are confronting the same eroding economy that male business owners are. After all, the economy has been melting down universally; every business is having to deal with these issues. It is universal.

I fear these reasons are preventing women from asking us for help. Businesses owned by women are failing just as businesses owned by men are. The issues are universal and not gender-based.

Unfortunately, I know of no female-owned workout companies capable of giving you the support you need. We are specialists and capable of removing debt from your business and reducing your personal guaranties to pennies on the dollar. You need to call us if you are in trouble. We care not what gender you may be, we only care about removing your debt so you can operate safely and remain in business. That’s all there is.

I have thought about hiring a powerful woman to deliver our message and may yet do that. However, first my plea to you: We can help, call us. We care about every small business owner facing the challenges of declining revenues with debt too large to service. We care about the huge losses you will experience. We care about your loss of home and assets. We care about the loss of jobs and the negative effect this will have on so many families if you go out of business.

Simply stated, we have a mission: to save America one business at a time… and female-owned businesses comprise a huge sector of our economy. So, where are you? Call us. We await the opportunity to support your success and emergence from this devastating economy. It can be done.

Call 413-584-2581. Norm will arrange a no-obligation teleconference for us to discuss your options. We do not care whether you are a man or a woman. We do care about your family, your jobs and your business… very much. We are here to help.

Beware of Irrational Behavior. There is No Defense Against It.

Yes, it does happen. People can be totally irrational. Against their own best self-interests and those of the deal, unwilling to compromise or do business, people act irrationally. It does happen, we just witnessed such a meltdown. Such irrational behavior is steeped in emotion and comes from pure ego. This behavior is impossible to deal with… rationally. There are no predictable, reliable, dependable strategies—offensive or defensive—against an irrational being. It is like negotiating with a suicide bomber. What’s the point?

There is no place for this in BUSINESS dispute resolution but it pops its ugly head up more frequently than one would ever imagine. It typically ends in disaster and frequently ends in legal proceedings. Unfortunately, this results in a situation with winners and losers; frequently the lawyers are the winners and the litigants are the losers, both of them, as irrational behavior produces bad results. Litigants end up being the losers as nothing is ever gained from irrational dispute.

Nonetheless, people act on their emotion and ego and in their minds, victory is all that counts. When this happens, the best advice I can give is to execute a rapid and orderly retreat. Find an exit and withdraw, otherwise all that will be gained is a huge legal bill and no sound resolution. It will be a war of attrition, and no one ever wins those.

It no longer is a case of Right vs. Wrong, it is a case of Ego vs. Ego. This is irrational behavior and no one ever wins this battle other than the lawyers.

Retreat is a valuable option and a viable strategy. Live to fight another day. Live to fight only honorable and righteous battles, battles worthy of fighting for.

Disaster loans are a disaster, debt workout, debt forgiveness is almost impossible.

It makes little sense, as the SBA has a definite Offer in Compromise program, we initiate it frequently and resolve defaulted loans  very effectively, There are procedures, guidelines, requirements and a resolution process. It works. It is frequently difficult to navigate, cumbersome to use, but since we understand the process well and are  very practiced at it, and very successful with it, we ge it done.

Not so with Katrina disaster loans or other disaster loans that go into default.

For some reason, they have not gotten the memo. They are unaware of any Offer in Compromise process and act as if they are not SBA guaranteed loans. They cannot be worked out. We know we have tried repeatedly and have gotten no where every  time.

Apparently te SBA has determined in its own infinite wisdom, that there is a significant difference between directly lending money given to them bu congress to support disaster situations, and guarantees of loans made through traditional banks. For some reason this is difference enough for their to be an Offer In Compromise procedure for guaranteed loans issues through banks and direct loans issues directly from the SBA.

Why there is a difference, I do not know. I cannot even fathom the logic behind such a demarcation, but there is.

A breached disaster loan goes right to the Department of Justice, US Treasury and is handled by an  Assistant US Attorney and prosecuted as if  the default was a crime.

Now we have actually taken the defense of such a situation all the way through the Federal District Court system and had it litigated before a Federal District Judge and achieved a huge forgiveness, our typical 90% forgiveness on a $1.2 million dollar loan, however the sad part of this is the enormous fee the borrowers had to pay for such justice. I took years and a small fortune for legal fees which could have been used to reduce the debt but instead was used to prove the point that the borrowers were broke and out of work and could not pay a dime more. In fact the payment was structured over a number of years.

Picture the scene, your home and business washed away, your entire community gone, and the SBA is on location working out of a mobile office, offering cash on the spot to rebuild. Rebuilding did not go well, did not bring the business or market back and revenues have disappeared for seemingly forever, and then the second disaster occurs, the SBA comes collecting their payback and even thought the borrower never recovered from the disaster, losing everything they had, the US treasury is going to collect no mater what.

Despite the facts and despite the reality that the SBA has a debt forgiveness plan, the Disaster loans are not included within this process. Let’s beat the borrowers  up again, says the SBA, lets collect no matter what… and so they do…no mater what, and until you get to the US Federal District Court, there are no workouts available. We know. We are defending a handful and we are not winning.We are losing.

I am working with my bank and they are cooperating…forget it! Keep dreaming, it ain’t so.

I am working with my bank and they are cooperating…forget it! Keep dreaming, it ain’t so.

NO, THEY ARE NOT COOPERATING; THEY ARE SIZING YOU UP AND PREPARING FOR THE TAKE DOWN, THE LIQUIDATION, AS IT IS SURE TO COME.

You are fooling yourself. It is not going to work out for you. Stop this insanity and pay attention.

A simple fact: It is estimated by many bankers we speak to, that at least 95% of the loans that go into the Special Assets Department or the Workout Department or whatever it may be called, end up liquidated. That’s a fact. In fact that’s the plan, the pre-existing mindset, their context. It is their last opportunity to milk more payments, seize or perfect more collateral, gain additional collateral, gain additional guarantors, locate additional assets they will later seize. It’s all a preparation for what surely will come, liquidation. Improving their position, while they have you cooperating thinking you are truly gaining ground and effectively working your issues out.

Another fact, the bank will only do a few things such as:

a. Allow interest only payments for a short while – Big deal! What happens in a few months when full payment returns?

b. Extend amortization period, lowering monthly cash flow out – Great! Even longer payback period which is unaffordable in the long run and never a chance to build equity.

c. Reduce interest rates, reducing cash flow out – Will help a little but it is putting a band aid on a broken bone.

d. Possibly even allow a deferment, nonpayment, for a few months – Great until it’s over, then what?

None of these addresses the real problem: too much debt, not enough revenue.

In the end you will have only postponed the inevitable… failure, foreclosure, auction and the remaining unpaid debt falls to your personal guaranty and you will have lost your business and then be confronted with a huge debt you cannot repay. It is a very ugly situation and is happening every day all over the country.

Since I know very well, that most small business owners want to pay their bills, honor their debts and commitments, I understand your desire to cooperate with the bank when the bank sounds as if they want to do something positive that may work.

But when you took out the debt, borrowing money based on revenue and projections that warranted such debt and it was affordable; you had no idea that a deep and dark recession was about to engulf us all.

However, it did. Now you cannot possibly afford the level of debt you once could as now your revenue is deeply diminished and cannot cover large debt commitments. What to do?

There is only one option, one alternative, one plan of attack that works: debt forgiveness. It’s our strategy as it reduces and removes the principal debt, forever, including your personal guaranty. No bankruptcy, no legal process, a pure business strategy that ends with deep, debt forgiveness.

When so many people I speak with tell me the bank is working with them so they are ok, I know they are kidding themselves and not looking very far down the road when the relief is over and the demand for full payment returns.

Even if the restructure is long term, you will never enjoy any equity in your business as any sale of the business will result in a full payback to the bank… not you.

It is not the right conclusion. The bank entered into this deal with the same assumptions you made, current and projected revenue will remain in line with the debt owed so it can effectively be serviced. If the revenue is gone, and everyone made a mistake, why shouldn’t everyone who is in the deal suffer appropriately and share the losses together. It was a failing on both sides: bank and borrower, I do not understand why the bank believes and borrowers follow the need for borrowers to shoulder 100% of the loss and banks to enjoy 100% of the gain. It is not a moral issue; it is not a matter of keeping your word. The contract assumptions failed, both parties to the loan should share in the losses.

Do the workout we propose, with debt forgiveness. Working with the bank is fulfilling their goals, 100% payback, nothing for you.

Stop believing the bank is working with you, it is not so. They are working towards liquidating you in the most meaningful way for them and then chasing you for the shortfall on your personal guaranty. That’s what you are going to get… a stick in the eye.

Eight Often Overlooked Details That You Need to Know About Your Customers and Prospects to Sell to Them Effectively.

Eight details, often overlooked, that you need to know about your customers and prospects in order to sell to them effectively:

1. Age – You must adjust your message to be age-relevant. What you say—and how you say it—is always age-sensitive. Know your clients’ age profile.

2. Gender – Clearly, men and women have altogether different needs and should be communicated/sold to in a way that is appropriate to their gender. Not doing this, or trying to be gender neutral, is a huge mistake and a lost opportunity.

3. Location – Where your clients live has great impact on how they think. Know their location and adjust your message to their local interests and local bias. You may not want to talk to a Southerner in the same way you would to a New Yorker.

4. Education Level – A very important factor and knowing this will help you determine how to speak with your clients.

5. Income – Obviously, this is crucial information.

6. Marital Status -Marketing family messages to single persons (and vice versa) can lose the deal for you.

7. What Makes Your Prospect Tick – This is a tough one but it’s very important. What are the driving forces your prospect is dealing with? Figure this out and you have a sale in hand. Don’t consider it and you’re on a fishing expedition. Figure it out—do not skip this factor—and probe. You’ve got to know your prospect’s fears, worries, concerns, excitements, hopes and dreams. When you know the scenario inside your prospect’s head, you can enter it, speak to it, and build a relationship that leads to a customer.

8. One-Time Sale or Long-Term Repeat Business Prospect? – There should be a huge difference in approach dependent upon this factor. Know your business and your objectives and those of your prospect and sell accordingly. This is a must-know issue.

All of this may seem quite obvious, however, it is quite amazing to realize how few small business owners take the time and effort to find this information out and therefore miss out on better opportunities to close sales.

Figure out how to gather this information and you will increase your sales dramatically. Fail to do this and you’re shooting blind. It’s a hit or miss scenario.