I am beginning to notice an increase in new business openings. One might say at first blush they must be nuts. In this economy? Why would anyone want to open a new business?

No they are not crazy at all, in fact they will probably have a better chance for survival then those who are and have been in business for a while.

Seems strange you say…Think about it. Today’s issue are all about surviving this huge transition. Changing economy, changing customer habits, changing credit availability, changing everything.

Sometimes it is either very difficult to change or change is made too slowly, or not at all or incorrectly. Change is the issue. Downsizing, debt workout, redefining your market, all uphill battles.

Opening up a new business with a fresh start with no issues other then figuring out what and how to do it under today’s conditions may be an easier challenge then making the transition from old ways to new ways.

In fact with so many businesses going out of business, the market place is ripe for new replacement businesses prepared to move forward without the anchor of previous bad habits, too much debt and overhead weighing them down.

There are therefore two lessons to e learned here.

1. Change is a huge opportunity for fresh thinking and new business openings. Our changing economy will provide many new opportunities for fresh thinking and new start ups.

2. Existing businesses must act as if thy are a new start up and make all the changes required to succeed. This of course is very difficult, as it means reinventing yourself from what you are and have been to what you must become, and doing this with all the old systems and strategies in play and of course all the existing problems plaguing you… a very tough job.

In fact maybe you all ought to consider closing down and then re-opening as a new and different operation, designed for today’s economy and customer….as if you were starting a new business.

Change always brings opportunity with it…we are clearly in a changing time…embrace it and win. Fight it, or ignore it at your own peril.

It is a war! The casualties are very high….you need a plan. There are very few options. We have the way.

Unfortunately, the small business owners have been abandoned, left to  defend themselves on their own, with no defense and the battle front is very bloody, many casualties, with no help in sight.

That is the sad plight we are in.

The economy is melting down, revenue are drastically cut, overhead creeps up daily, yet debt service on your loans remains the same, choking any chance for survival.  After your businesses are destroyed, you then get to face the full force of your personal guaranties, further burying you and preventing any chance of rehabilitation.

There is a way to successfully navigate this bleak situation. Second Wind Consultants with thirty years of experience handling such issues, has been saving one  small business at a time, stripping of the debt from the business so it may run free of debt, and then reducing the personal guaranty to pennies on the dollar.

The only small business bail out program there is, and its success is phenomenal.

” We are on a mission, to save as many small businesses as we can.” says Don Todrin President, and to spread the word and save more businesses, we have created a field force to deliver our message door to door.”

We have identified a number of exceptional business workout strategists, and have launched a small field force in New England to save as many as possible with personal service.

Scattered throughout New England we can now visit you personally and explain our program.

Call us, we will come to your rescue, now with a field force ready to protect and preserve your valuable business assets and give you the opportunity to survive and emerge successful again.

Call us, we will be there quickly. We are now staffed in Connecticut, New Hampshire, Maine, Massachusetts, and Rhode Island.

There are no other options. This is a war….we are your cavalry.

Call us for help 413-584-2581

Three huge problems with SBA guaranteed loans,  they are now guaranteed up to 90%. In a word, the bankers who are lending, very few, even with a 90% guaranty, cannot  possibly lose any money and why aren’t they lending more under these guaranties? A rhetorical question, however those that are lending are motivated in two ways, both of which spell real trouble for the borrower.

1. They frequently lend you too much, upping your request, suggesting they could qualify you for more so why not take it, and who can say NO. So the happy new entrepreneur  enriched by a loan larger then he needs  and cannot pay back, happily goes into business, now more likely to fail because he borrowed too much and will eventually choke on debt service. A recipe for disaster, thank you Mr. banker for your wisdom and greed. It will not be long before you are enjoying your guaranty and your borrower is worrying about how to save his house.

2. Then there is the other end of the spectrum, the banker who decides he will be conservative and counter iffers  the borrowers request offering him far less then he asked for, which of course the borrower reluctantly accepts and then defaults because it is not enough… brilliant.

3. The third common sin I see, is the ridiculous business plan that has no chance of success yet because of the 90% guaranty, the banker is willing to fund it, after all he has limited or no risk.

Since there is little likelihood that some bankers will overcome these bad practices, and since in the end it is the borrower who will pay the price with his personal guaranty, it is the borrower who must be aware of these issues and employ the following protective strategies.

a. Borrow only exactly what you really believe you will need, too much will cause too high a debt service   and will erode your cash.

b. Walk away from a loan that is too little, underfunding is guaranteed failure as it will prevent                       you from implementing your strategies and will force you into failure.

c. A poorly constructed  business plan that is unlikely to succeed  is built in disaster. Have                   someone with business experience check it out, make you defend your assumptions and projections, make certain there is a chance for success. Of course make certain your cash flo pro-forma is realistic.

Your loan and the success of your business is your responsibility not the bankers. In fact the banker may have a different set of objectives to fulfill. He is renting you money with a 90% guaranty from the SBA. Be careful, his opinion may not be in your best interest. Do not sow the seeds for tomorrows workout.

I hear it every day. People complaining. They complain when it rains, complain when it snows, complain when its cold, complain when it’s hot. Complain about  the price of gas, complain about aches and pains, complain about everything imaginable. It is as if it is our national past time.

It is Thanksgiving. A time to give thanks for what we have, a time to stop complaining for one moment and re-acquaint ourselves with  all our blessings, as they are too numerous to even count.

If we look back into the not to distant past, we can recount countless acts of bravery, selfless sacrifice and outright personal devastation, and even death  by many of our forefathers, for the general benefit of our country and way of life.

Consider the signors of the Declaration of  Independence, committing a defiant act of treason against the British Empire, with the greatest  most formidable Army and Navy in the worlds history, knowing full well, that if this ragtag band of farmers failed to defeat this enormous armed force, they would all swing from the nearest trees. Yet this did not stop them for one moment as they valued the way of life they dreamed worthy of their dieing for. A country, a culture, a society based on freedom and ‘the pursuit of happiness’.

Not only did they not complain, they  were willing to sacrifice their wealth and power in many cases their lives, so you and I could enjoy the freedoms they won for us.

How did it work out? A few hundred years later, we evolved into the highest standard of living the world has ever known.

Yes, we enjoy the best and most  of anything this world has ever seen.

Yet we complain about the most nonsensical issues imaginable. How silly we can be.

So I challenge all my readers, consider our blessings, they are too numerous to count. Consider the enormous sacrifice so many have endured to allow us to enjoy what we have today…and give thanks.

We are the most fortunate people in the worlds history…give thanks, and maybe even carry this gratitude with us when we re-enter our daily routine, fighting our battles, remembering the signors of the Constitution, and realizing, our battles may not be all that bad after all…and maybe we should not be complaining about anything at all.

Peace my friends, have a very happy Thanksgiving….and think for a moment about all the blessings we enjoy.

A catered party at a country club…very nice, very expensive.

A rented room at a function hall again with a catered dinner…very nice, very expensive.

Cocktails at an open bar event……nice, expensive, and dangerous.

No, none of the above, not that they do not work, they do as any gesture of goodwill and a willingness to spend money is perceived as respectful and yes, very nice. But is this the best you have to offer?

You are missing a golden opportunity to make a presentation that will last all year long and will positively affect your employees, meaningfully, dramatically, with great impact.

Simple, direct and inspirational….

Entertain your employees in your home. If possible cook the meal for them, yourself or with the help of your spouse. If impossible then have it catered, but the best of all is for you to cook, slice and serve…even with help but the vision is with rolled up sleeves and an apron on giving to your employees, meaningfully, respectfully and sincerely.

That works. That spells out I care, that says I respect you, I thank you and I care about you.

Inviting your workers into your home is a very symbolic representation of respect and personal giving, It is true a man’s home is his castle, is his fortress, is his most personal of all representations…it is your home.

Caring enough to invite your employees in represents a very meaningful and personal gesture. It is not about how much money you spend, it is about how sincere the demonstration of respect and thanks it is. If it’s just about a dinner at a restaurant, then it is really only about the fact you spent some money. If you bring your people into your home and cook for them it demonstrates how much you care about them and it will have enormous impact, long lasting enormous impact. You are opening up your personal life to them and bringing them in embracing them with your hospitality and personal effort…for them.

It is a huge demonstration of sincerity, and for one evening, the roles are reversed, the boss serves the employees.

It is beautiful gestures…..do it if you can.

It is called web 2.0, combining, blogs, video, Twitter, Facebook, Youtube, all integrated producing one knock out presentation to your market, and getting a terrific response.

I said I was going to do it. It took a long time to get it all together, and now I have done it. 17 videos posted on my web site, 583 to go. Watch a few, they are addictive and pretty good, I am very pleased with the results. I was easy; it was my fear of it that prevented earlier follow through, but after doing a few it became very easy to do.

Each one tells a story, a story associated with a blog post, a story which delivers a punch, a reminder, information, a story you can benefit from today.

Here is the point:

This works, it drives viewers to me and my site. It works…very well. It helps overcome internet barriers by creating relationship and letting your viewer get to know you, the videographer, on a more personal level. This is critical. First, creating a relationship and then, ultimately, a sale. This helps break down the barriers that are frequently encountered in a web site marketing effort, especially if you are marketing a service.

Not only does it allow you to reveal yourself for your viewers’ inspection and consideration. It is very effective in increasing your viewing audience. It is the difference between a TV show and reading a book. Both work well together they work very well, but video far outworks blog reading by a huge factor. People would much prefer to watch and listen than read. It’s easier, more fun, and far more effective.

Watch, learn, then duplicate what I am doing, it’s easy, you know your product, company, and vision very well, better than anyone else, now tell the world in your videos.

It works, do it.

Minimum Viable Product, a new phrase, a new idea, but it makes a lot of sense. It works like this.

Historically, the release of a new product occurred after a significant investment in expensive development and then a heavy investment in actual production, usually all behind closed doors. A big secret until the day of release and the big announcement, hoping, betting the company’s future and possibly the company itself, that it will be well received and will bring back the return expected and projected….and if it doesn’t, then what?

It has certainly happened enough times.

Now the idea is to meaningfully test without making the huge investment in development and production. Finding out if it will really sell or not.

In the past market researchers and small business owners would ask around to customers, distributors, whomever, if they would buy this new product. Just as frequently they would get positive feedback supporting the go ahead decision, and thus dive into this major investment as every new product or service release requires.

The operative question being “would you buy this?”

The important point is that frequently despite a person saying he would buy, businesses learned this opinion may not actually transfer to a real purchase.

Now with the economy being as depressed as it is, small business owners cannot afford to launch failures and the cost of development is too high to speculate on.

So we use the Minimum Viable Product development process as follows:

With the advent of the Internet, smart small business owners have figured out that a web site page can be made for very few dollars and ideas can be marketed for sale without any investment in development or production at all…yet. If enough purchasers are willing to buy as indicated by a purchase request, an actual order then make it and ship away, knowing in advance it is a winner.

No sales, drop the idea or product.

With this concept you no longer ask for opinions. You can count the orders and determine if interest is high enough to warrant the investment.

You can also figure out price points, and valuable features all by what is offered and what is purchased.

Clearly there is the issue of the time involved from order to shipping, if you have not yet manufactured, but presumably you have it all figured out.

No expensive mistakes, very low cost to test, and very reliable results. Makes sense. Since new product and services are the lifeblood of business, this concept has much value and power.

Use it.

Your revenues are dropping like a rock, yet your overhead is always increasing. The debt you previously took was supportable with yesterday’s revenue…but no longer, not with today’s significantly reduced revenues. It is crushing you.

We understand……
Yes, we get it.

We feel your fear and your frustration.
We know you want to pay your loans and bills.

We understand how hard it is to not take a paycheck home.
We know how hard it is to tell your wife she cannot use the credit card anymore.
We know how difficult it is to fire your loyal workers who have become part of your family and depend on this job for their families’ survival.

We know how angry you are with this situation.

We understand that you are being forced to your knees by forces not in your control, and caused by other’s greed, and you are really pissed off about this.
We get it.

The greedy bastards that sold us out pulled the rug out of the small business world by causing the tanking of the economy, forcing us all to face our worst nightmare…failure.

I have this to tell you: It’s not your fault!!! You have done nothing wrong, you have made no mistake. Lose the emotion and take action.

There is an option. We have a plan.
We will strip the debt of your business and preserve the assets so the business survives… and drastically reduce your personal guaranty.
This works, for most upside down businesses.

Take back control, turn defeat into victory!

We spend an enormous amount of time, energy and effort fighting the battles to save our clients’ businesses, their homes and their lives, and an honorable battle it is.

Our belief and experience, based on enormous contact with many small business owners, is that none of our clients would like anything better than to be able to pay their bills and loans, work hard and provide for their families and support the jobs they provide.

No one wants to downsize, lay off their people, and workout their loans. No one. But you must in order to survive. We are perhaps one of the few businesses in the country that concerning our clients through this huge workout transformation, but it is our clients that are the real heroes, tenacious, committed and willing to do whatever it takes to succeed.

Today, on the 600th post I have written on this subject I want to pay tribute to the brave men and women who asked us for help and then trusted us as we instructed them to jump off the cliff….and believed we will catch them and bring them to safety.

These business owners are now successful, their business being saved, their families and the families of their employees now enjoying a sense of security and well being. Hoo-hah! It is a worthy and honorable battle we fight.

One business at a time, giving them the second chance they deserve. There are no other bailouts, there are no other options, there is no other opportunity…one business at a time, and we will save as many as we can.

I tip my hat to these warriors; they are the backbone of our country.

We are deeply satisfied and honored to lead the way and demonstrate to all those small business owners in the same distressed position as my clients once were, how to succeed in this down turned economy.

Hoo-hah! There is light if you know where to look. We have the plan.

Hold harmless and indemnification agreement: a phrase we have all heard of but probably have little idea of what it really means. Why should we be aware of it, use it when appropriate, and challenge it when added to an agreement, especially, when it is not to your best interest?

In many situations a partnership, or co-owners in an LLC or corporation enter into an agreement with a third party, could be the bank, an investor, a landlord, a vendor, any one to whom you are financially obligated.

Then one of the two or more guarantors, choose to leave the entity, exiting the partnership, corporation, or LLC. The problem is the third party to whom you have both signed personal guarantees is unwilling to release the exiting partner, co-guarantor, so what can that person do to remove the continuing obligation?

Not a lot, as the third party has any incentive to let the guarantor out of his guaranty.

In this situation, lawyers have come up with a reasonable alternative to resolve this matter, and it is a hold harmless and indemnification agreement.

What it means is the remaining partner, co-guarantor, agrees with the exiting partner to “hold him harmless”. In other words, remove his responsibility from him for this obligation, by “indemnifying” him, or paying him back for any losses he may incur because of this debt.

The intent of this agreement is to circumvent the reality that the exiting partner cannot exit an agreement he made with a third party but the remaining partner can cover his losses should they occur. Thus if the bank, or landlord or whomever experiences a loss from this relationship, and claims are made on both guarantors, the remaining partner will pay for and cover any expenses incurred by the exiting partner.

The reality is the exiting partner is still responsible and could be forced to pay on his guaranty, but then the remaining partner would be obligated to cover his costs and expenses.

Of course, the real problem and issue is that while it all sounds good, in all reality if a guaranty is called, the likelihood that the remaining partner has the cash to cover the exiting partner is very low. If he had the cash the debt would have been paid before the guaranty was called in, thus it really is usually an empty promise that cannot be implemented. It may have been well meaning but usually impossible to enforce.

In the end the eating partner has a cause of action, a law suit against his partner for breaching his hold harmless and indemnification agreement but really that is a lost cause at the time it is being considered as clearly the remaining partner is out of cash.

All too often I see this clause snuck in by cagey lawyers to unsuspecting partners who are dissolving their relationship, without the remaining partner really understanding what he is committing to and if he did understand would certainly not agree to it. When you see this phrase, and are on either side of the deal, remaining partner or exiting partner, be cautious, inquire as to its meaning and make certain it is what you want to do. If you are the exiting partner, be aware it is usually an empty promise and if called on is unlikely to be paid on.

Thus in all reality, if you signed a guaranty, and want to exit the relationship, chances are very good that someday you will have to answer to your guaranty and will NOT find success in your ex-partners promise.

Call your lawyer when this happens.