Where do I get a loan in times like these?

Many small business owners in need of loans feel they have been left out of the various government stimulus programs during this recession. The hard truth, of course, is that loans to small business are difficult to obtain in the best of times. Lenders are even more cautious and conservative during downturns.

Here are a couple of things to think about, however. First, a 2009 study by the Kauffman Foundation found that more than half of the Fortune 500 companies were launched during downturns. Perhaps that should be obvious… half during downturns and half during good times? The point, of course, is that good business concepts with good planning and good execution will find the financing needed, regardless of the economic environment.

Fortune Small Business magazine, September 2009, p.25, reports that this year’s American Recovery and Reinvestment Act added $50 million in loans to the SBA’s $21.4 million microloan program (for loans up to $35,000), as well as $24 million in technical assistance for these loans. Further, the senior vice president for commercial lending at the American Bankers Association reported, “Small businesses that go to small banks have higher loan-approval ratings.” Small, local, conservative banks are still generating funds that need to be placed in loans to approved businesses with demonstrated needs. That is the business they are in.

You are still going to have to demonstrate that you have the assets to use as collateral if you default on the loan. Also, you must demonstrate that you will have the cash flow to service the loan. This is standard practice. It just seems more onerous in “these times.” It is not. It is what commercial lending should be in order for financial institutions to be as successful as we each want to be.

Is your business prepared to meet these standards? If so, there is likely a financing source available for your business.

What are your thoughts? I'd really like to hear from you!

Dr. Bill - I love to share, I hope you do to! ;-)

Most overrated businesses... a new list

The Yahoo Small Business Answers Center sponsored by Bank of America has a recent article by Kelly K. Spors and Kevin Salwen titled: The 7 Most Overrated Businesses
It is a good update of what my business and university business school teaching has suggested to me, with some updates. What do you think?

In an earlier post, I mentioned that recessions can be a great time to start a business... but it must be a right business for you, and where you are. They mention this circumstance, as well. Here are their 7:

1. Restaurants - has always been my first, as well, along with bars. They quoted "60% of restaurants close in the first three years" (2003 study at Ohio State University) vs. roughly half of all start-ups in five years - the classic small business statistic.
2. Direct Sales - hasn't everybody tried this, at one time or another?
3. Online Retail - one of the "new" ones - by the way, there are millions of them...
4. High-End Retail - SBA notes they fail at much higher rate than non-specialty stores.
5. Independent Consulting - their quote: "A successful consulting firm needs people to find the work, grind out the work and mind the work. Unless you know you can do all three yourself, you potentially expose your business to great risk." I concur, from personal experience.
6. Franchise Ownership - a 1995 study by a researcher at Wayne State University found that 62% of franchises were open for business after four years, they note, and franchises were also found to be less profitable in those early years. I've been there, done that. True!
7. Traffic-Driven Web Sites - another new one. To have any chance of success, a $50 million investment is a minimum, one start-up consultant says. Does that, perhaps, eliminate most of us??

I enjoyed this update of one of my favorite subjects.

What are your thoughts? I'd love to hear from you!

Dr. Bill - I love to share, I hope you do to! ;-)

Are these words outdated for the office?

A recent article provided by Business Week, by Carolyn Duffy Marsan, suggests there are now:
"12 Words You Can Never Say in the Office" without looking out of date. What do you think?
[Ref: http://finance.yahoo.com/career-work/article/107602/12-words-you-can-never-say-in-the-office.html]

1. Intranet
2. Extranet
3. Web Surfing
4. Push Technology
5. Application Service Provider (ASP)
6. Personal Digital Assistant (PDA)
7. Internet Telephony
8. Weblog
9. Thin Client
10. Rboc
11. Long-Distance Call
12. World Wide Web

What are your thoughts? I'd love to hear from you!

Dr. Bill - I love to share, I hope you do to! ;-)

Getting Down to Business

The students in my online Entrepreneurship class were recently asked the following questions, that I took from the text, noted below:

“Getting Down to Business”
1) Can you handle uncertainty?
2) Are you energetic?
3) Do you believe in yourself and your abilities?
4) Can you handle reversals and failures well?
5) Are you passionate about your goals and vision?
6) Are you good with other people?
7) Are you adaptable?
8) Are you willing to take risks or leaps of faith?

[From page 32-33 of the text: entrepreneurship: A Process Perspective, 2e; by Robert A. Baron and Scott A. Shane; 2008; Thomson*South-Western Publishers; ISBN 0-324-36558-6]

How would you respond to these questions?
Do the answers help you evaluate whether or not you might be good at starting a new business? Why or why not?

What are your thoughts? I'd love to hear from you!

Dr. Bill - I love to share, I hope you do to! ;-)

Entrepreneurship

As I prepare to teach my fall on-line class on Entrepreneurship I cannot help but wonder if the current economic environment will again be a natural incubator for entrepreneurship - or will the severity and indeterminate length of this downturn be more of a deterrent to the formation of new ventures? Only time will tell, of course, but speculation is a worthwhile activity to assist in monitoring the upcoming activities.

My first thought would be that many start-ups have been delayed, but as the recession continues, with the signs of the end we are beginning to see... even though down the road a bit, we will begin to see a sharp upward increase in new ventures. There is built-up desire and need; will there be some particular "event" that will trigger the final decision? Are financial institutions ready to support new business; business expansion? Are customers prepared to "take a chance" on new businesses?

What are your thoughts? I'd love to hear from you!

Dr. Bill - I love to share, I hope you do to! ;-)

The Real Secret to Success

Watching Roger Federer and Tiger Woods compete in their chosen endeavors at the highest level over the weekend reminded me of the great advise I got from an audio tape, nearly fifty years, it seems (paraphrased): "Successful people do what unsuccessful people are either unwilling or unable to do." During the tournament Tiger was competing in, with Anthony Kim at his side on Sunday, the announcers kept referring to "things" that AK had not yet learned - that he would have to if he is to become anywhere near comparable to some of the things Tiger does today. He has the natural talent. It is the, what I call, "work ethic" that is missing. The willingness to do all the practice, to identify and adopt changes, to make most of the activities "second nature" through commitment and adoption. It is the pre-game and post-game routine - relentlessly, without fail. On Sunday, this one day, Tiger could have chosen to watch the end of the Federer-Roddick tennis match, and shorten his pre-game routine. There was never such a thought. When it was time to do what he was supposed to do to be successful, he did it. Did all the others? Good question. I'll bet not a s faithfully - if my theory holds.

The week before, at that golf tournament, David Duvall, a #1 a number of years ago, talked of how he had taken his "talent" for granted. He just assumed that would take him where he wanted to go. Actually, it did - but it was not enough to keep him there, to sustain the success he believed he deserved because of his "talent." He had failed to recognize the many other things that go into "success." He had not yet been willing to do what the "sustained successful" person must do. He is now coming back, trying to do more of those things.

This does not just apply to sports. It applies to everything we do - however you define success. Give it some thought. I'd love to hear your thinking, and your examples.

Dr. Bill - I love to share, I hope you do to! ;-)

Do these phrases kill resumes?

Liz Ryan writing as The Savvy Networker says the following 10 "boilerplate phrases" will kill a resume in today's market. What do you think?

• Results-oriented profession
• Cross-functional teams
• More than (x) years of progressively responsible experience
• Superior (or excellent) communication skills
• Strong work ethic
• Met or exceeded expectations
• Proven track record of success
• Works well with all levels of staff
• Team player
• Bottom-line orientation

She says this marks you as uncreative and "vocabulary challenged" to use these "boring corporate-speak phrases - rather than using "language... that people like you and me would actually say." I'm really interested in feedback on this topic.

Dr. Bill - I love to share, I hope you do to! ;-)