“Small Business” Does NOT Mean 500 Employees and $10 Million in Revenue.

There are many definitions of a small business. One standard definition is $10 million in sales and 500 employees. That’s not small business! That’s big!

So, what is small business? A small business may be the family business, or just a very small business—a dozen or so employees and maybe $1 million in revenue. Small retail shops, small service businesses, architects, contractors, tradesmen, lawn care… everything that America is all about, what our towns and cities are full of: micro small businesses. That’s America. That’s were the rubber meets the road. That’s small business, and these are the people I am talking to.

These are the people paying more than their fair share of taxes and getting a lot less in return. They’re the ones experiencing massively declining revenues and ever-increasing overhead and expenses. This is where the recession is grinding us to the bone, where debt is now so high compared to revenue that we cannot survive. This is where the recession lives, in reduced revenues, increased overhead and bone-crushing debt. Micro small businesses are our neighbors, our communities, our friends.

There is no revival at this level, just pain. The larger of the small businesses are beginning to rebound and that’s good, but the corner store, the local community businesses, the mom-and-pop stores, craft stores, coffee shops, ice cream shops, etc. are all suffering and going out of business rapidly and daily. The pain is intense and families are at risk. Families, homes, children… all innocent victims of this cold-blooded recession.

Yes, the “too-big-to-fail” businesses were bailed out by our government using our tax dollars. The micro small businesses were left to pick up the tab but get no benefits because they are small enough to fail without bothering anyone. Cold.

So, it is up to us to take care of ourselves, and that is our mission at Second Wind. Showing you how to survive and even prosper, to emerge successful, regain position, preserve jobs and add more. Something must be done and bankruptcy is not the answer as it eliminates the business, the jobs and the income for the owners and the families of the employees who have now lost their jobs and everything else they have built.

The answer is self-help. We must downsize our businesses if possible, reinvent ourselves and, yes, do the debt workouts because debt is killing us all. Without debt we can learn to survive and even prosper in this rough economy. Ask any small business owner—small as defined here—how things are going, and they will tell you: awful. They are being sacrificed at the altar of this recession while our government bails out big business (the “too-big-to-fail”) so they remain profitable.

Micro small business is where the help is needed most and there is none.

Call us, we have answers. We have strategies that work. Downsize, reinvent and work out your debt. This is the answer.

Call us at 413-584-2581. Norm will arrange a no-obligation teleconference to discuss your options. Help is on the way. There is no reason to fail, we can help.

Let’s Talk Business: Successfully Navigating the Recession. The Book Is On the Way!

First the blog, now the books, then… the movie?

Yes, my blog has been very successful. It’s been viewed by hundreds of thousands of anxious business owners wondering how to survive the downturn and resolve crushing debt in view of plummeting revenues, wondering what to do about businesses that are no longer profitable and how to survive and succeed in this horrendous business decline. I have been writing for a few years about exactly what to do and how to do it. Many have paid close attention and have followed my strategies… and many have survived because of it.

But, as we can all agree, a blog is a slightly more disorganized and difficult medium to navigate than a book. No real contents or organization, just daily posts on relevant topics. A hodgepodge of ideas.

Given how important these subjects are—your business survival, your financial survival and the survival of your family and your employees and their families—I have converted this blog into my first book: Let’s Talk Business… Successfully Navigating the Recession. This book explores what one must do to survive the economic downturn, including chapters on debt workouts. These are lessons learned in the front lines of small business hand-to-hand combat, what works and what doesn’t work.

My second book (in the works), also based on my blog, is about SBA loan debt forgiveness and workouts. My third book (also in the works) is called: Now What? Explaining What the Business Owner Must Do to Survive and Emerge Successful and Profitable. Both will be out later this year. (Available soon in ebook and hard copy versions.)

I believe these books will become field guides for small business owners trapped in a downturned economy and looking for answers as to how a business owner can manage survival and emergence, and ultimately return to profitability.

My vision is to help save America, one business at a time. My goal is to help small business owners survive, protecting the jobs and commerce that their families—and the families of at-risk employees—depend upon.

If You Borrow Money From Your Family, You Need To Do it Right… For Reasons You Are Not Even Considering.

Many small business owners borrow money from their family to support a business endeavor. It is natural and occurs all the time. Unfortunately, because it is family, it tends to be a looser, less formal transaction than if money is borrowed in the normal course of business, and loans of this type rarely carry a note or UCC filing, or even a written agreement.

It makes little sense to treat your family in such a shoddy manner as you are really sacrificing their protection if you ever get into financial trouble, and this happens every day. Most family lenders say, “I can trust so-and-so… I do not need a note or a UCC filing. My relative will pay me back.” It is not about trust between family members, it is about priority and payback, and protecting yourself and your family in a default situation.

Additionally, it is entirely possible (and even likely) that money may be borrowed from your family even before the bank lends. Thus, the family loan is on file in front of the bank’s, assuring your family priority in the case of default, which can be very helpful to the borrower for many reasons.

An astute banker or bank lawyer may require you to subordinate a family loan to a bank loan, thus removing the family from first position to collect. Though diluted, significant power remains if the loan is documented and publicly filed (and thus considered a legitimate obligation which must be respected and dealt with) and this can play an important role in the workout scenario. The bias of the lenders, bank and SBA is that a loan from a family member need not be respected or repaid, and can be ignored and rolled over for the benefit of the bank. Proper filing prevents such a cavalier attitude.

This is exactly what will happen unless the loan is documented, collateralized and publicly filed. This does not mean your family member will hard collect, or foreclose (or even collect at all), but it does create a barrier between the bank and your assets that may be very beneficial to your workout and survival, as well as making certain your relative’s money does get returned to them if possible.

The point being, if your parents’ loan for your new start-up is handled impeccably from the start, in default that will serve valid purpose as the terms are enforceable and thus it must be respected and dealt with. If not defined properly, it will be ignored, and not only will a loss occur, but you will have lost the protective benefit of such a filing.

There is No “Wait and See.” There is No “Neutral.” If You Are Not Moving Forward, You Are Moving Backward.

I have determined that there is a serious small business owner disease epidemic taking place all over America and it is deadly. No one ever recovers from it. No one. Once infected—unless the remedy is applied—you will perish.

What is this disease? The “wait-and-see-what-will-happen” disease, the “holding-your-own” disease, the “neutral” disease… it’s all an illusion, wishful thinking.

IF YOU ARE NOT GOING FORWARD YOU ARE GOING BACKWARD. It is that simple, and to go backward in this environment means death—financial and business death.

We have seen what will happen far too many times. Upon default, you will eventually be foreclosed on and the collateral liquidated. Your personal guaranty will also be pursued and all you have will be at risk to be liquidated. Disaster.

So, once again, you know exactly what will happen. Your only option is to take control of your destiny and pursue the following three remedies:

1. Reinvent your business based on today’s economic realities. Force profitability.

2. Downsize. Force profitability.

3. WORKOUT YOUR DEBT. The debt you took on before the recession cannot be paid back with your currently reduced revenue. It is a fact. Working it out is the only remedy.

Waiting to see what happens is like waiting for the hangman to pull the rope. Action is the language of success; waiting to see what happens is waiting to view your own business funeral. It is that simple, and even if it is not that simple, it must be done to survive.

There is a plan, however, and we have it. Call us. We will chart your course to survival, profitability, and success. Call 413-584-2581 and Norm will arrange a no-obligation teleconference. Do it.

You May be Throwing Out Valuable Revenue…

Consider the following…

You all know how bad things really are for you and your business. Revenues are way down and overhead continues to creep upwards despite your attempts to reduce payroll. Realistically, things are quite grim. You may have already stopped taking a paycheck, as if that will save the day.

You may, however, be perfecting the age-old art of avoidance, not recognizing the clear reality that you are losing money and there will be a point in time that you will cease to be able to operate. Then what? You know when you are at that point.

For most of you that point is now. Few will act, and those that do not stop and reconsider their plan are truly wasting valuable life-preserving money—money currently being spent on a note that will soon be in default. So, what’s the point? In fact, maybe the debt service money you are about to spend this month and for the next few, if invested in your turnaround or workout, would yield a far greater return. It may, in fact, save your business life.

If it is true that at some point you will default and be forced to do some sort of workout—or leave the bank with its loss—why spend one more dollar on one more payment? If you’re going to default, default now while you remain in control. Default now, while you still have the life force to reform and redirect  your business energies.

You may be throwing away valuable revenue if you are paying the bank when you know you will ultimately default. It makes no sense. Paying the bank one more payment to “keep things going” is a waste of the money. Hoping things will change and that you will be able to continue to pay the notes? Another waste of the precious funds.

The only thing that can, and must, change is you and how you handle this long-term downturn. Stop making payments on debt you can no longer afford and that you will eventually default on. Stop wasting precious capital when you could use it on your own business workout or turnaround.

You are throwing away valuable revenue; use it on yourself. This is called survival. Call us for help and direction. Norm will set up a no-obligation teleconference. Call 413-584-2581.