Small Businesses Forgotten in Stimulus Distribution

This article was co-written with Lloyd Chapman, President of the American Small Business League. Lloyd will be on my weekly radio show this Monday at 4 PM. Please visit smallbusinesshour.com to listen.It is time for America's small businesses to unite and take ACTION!In a recent national address, President Barack Obama boldly proclaimed that his Administration's economic stimulus package was working. Meanwhile, small businesses in middle class America struggle to simply keep their doors open. Despite thousands of business closures during the last several months, the mainstream media has spent little time discussing the importance of small businesses to America's economic vitality. Our nation's political leaders routinely recognize small business as the backbone of our nation's economy, but to date small businesses have largely been left out of efforts to stimulate America's economy.

America's 27 million small businesses generate more than $6 trillion in annual revenue and collectively account for more than half of our nation's Gross Domestic Product. U.S. Census Bureau data indicates that companies with less than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of net new jobs.

When small businesses thrive, our economy grows. Yet today, millions of these businesses are being threatened by the very plan that was supposedly intended to help them. The president's stimulus package, rather than providing aid to small businesses is diverting resources to save mismanaged corporate giants.

Congress earmarked a mere 1.9 percent of the initial $789 billion stimulus package to assist small businesses. Worse yet, to date, less than one half of one percent has been distributed to small businesses. The irony of this is that in the long run small businesses will bear the burden of paying nearly the entire tab for this extravagant spending package and receive almost NOTHING in return.

The new administration is taking capital and revenue from the mouths of America's small business owners and feeding it to the big national banks, greedy Fortune 500 CEOs and Wall Street executives. This theory enraptures Wall Street, yet alienates Main Street. Even the Small Business Administration (SBA) is led by venture capital vipers who are licking their chops at a chance to infiltrate and dominate federal programs designed for small businesses.

The SBA was planning to guarantee $20 billion in loans during fiscal year (FY) 2009, yet it is currently on-track to reach half of that mark. Loan programs like the ARC [America's Recovery Capital] have been purposely structured so that few small businesses can qualify and banks literally have little motivation to lend. Even more disconcerting, every year, billions of dollars in federal contracts intended for small businesses are diverted to Fortune 500 corporations and other clearly large firms. Since 2003, more than 15 federal investigations found fraud, abuse, loopholes and a lack of oversight have led to widespread abuses in federal small business programs. The American Small Business League (ASBL) has estimated that every year up to $100 billion in federal small business contracts are diverted to corporate giants.

On top of this, small businesses are facing a hike in taxes for those earning more than $250,000, limits on itemized deductions, higher dividend taxes and shouldering more responsibility for worker health care.

While the Fortune 500 corporations have an army of lobbyists in Washington, small businesses are on their own. For this reason, it is more important than ever that small businesses unite. Regardless of political affiliation or industry association something needs to be done to stop this insane, wasteful spending spree. The ASBL and the Small Business Hour Radio Show are urging small business owners to make their voice heard. They collectively will be working together to shine a brighter light on issues facing America's 27 million small businesses, and to help the small business community organize a more powerful unified voice. To participate in this united movement towards change, please listen to the Small Business Hour with Mark Deo at smallbusinesshour.com and become a supporter of the ASBL by visiting http://www.asbl.com/joinasbl.html.by Lloyd Chapman and Mark Deo

Lloyd Chapman, President of the American Small Business League
A vocal crusader for the rights of small business, Mr. Chapman is a familiar figure at the Small Business Administration and in the United States Congress, where he has continued to work tirelessly during the last two presidential administrations to prevent federal small business contracts from being diverted to large corporations. He is regularly quoted by the media on small business contracting issues. He can be contacted at www.asbl.com

Mark Deo, Host of the Small Business Hour
Mark Deo is a small business advocate, author, journalist and business owner. For 12 years he has been the host of CBS radio's, "The Small Business Hour." He has been voted "Journalist of the Year" by the Small Business Administration; his weekly radio show can be heard at www.smallbusinesshour.com.
Thank you for your feedback, and have a great week!-Mark Deo

No interest, no payment for one year, $35,000 loans available from the SBA

loan_approved

The Small Business Administration released "lender guidelines" yesterday for the America’s Recovery Capital (ARC) Loan Program. While the program was announced back in May, details on the $35,000 interest-free, deferred-payment loans are only now available.

I was on the phone with Eric Zarnikow, Associate Administrator for Capital Access, the SBA department overseeing the ARC loan program, and he told me that, "Borrowers can begin applying for these loans beginning June 15, per the Administrator's May 18 comments. We estimate that the SBA, through our lenders, will be able to provide about 10,000 ARC loans to small businesses across the country."

You can read my article with more details on these loans on Entrepeneur.com.
What are ARC Loans?
ARC loans will be made for up to $35,000 and available to established, viable, for-profit small businesses suffering "immediate financial hardship" in order to provide some temporary financial relief so they can keep their doors open and put their cash flow back on track. It is intended for businesses that need short-term help to make their principal and interest payments on existing qualifying debt (including conventional loans, credit card obligations, notes owed to suppliers and utilities).

So what exactly is a "Viable business?"
Zarnikow says the SBA defines this as "a for-profit business with evidence of profitability or positive cash flow in at least one of the past two years."

How does the SBA define "immediate financial hardship"

The SBA is requiring businesses to show evidence of a "change in the financial condition" such as declining sales, frozen credit lines, difficulty meeting payroll, paying rent or difficulty making loan payments. The lender must analyze and confirm that a hardship exists.

How do ARC loans work?
The loans are 100 percent guaranteed by the SBA and made by existing SBA 7(a) lenders. They have no SBA or lender fees associated with them (unless the lender must secure collateral as part of the loan). The disbursement period (up to six months) is followed by a 12- month deferral period with no repayment of principal. After the deferral period, the borrower pays back only the ARC Loan principal over a five year period. ARC loans are available through SBA-approved lenders as long as funding is available or through September 30, 2010.

Mark Deo will help to guide you through the loan process
I have spent a great deal of time discussing these programs with officials at the SBA, as well as proving insight to some of the most influential business publications in America, including Entrepreneur Magazine. As a reader of my business update, I am more than happy to share this information with you- all I ask is that you purchase a copy of my new book, The Rules of Attraction. If you have a copy of my book, and you want to get my insight on how your business may be able to obtain an ARC loan, please send an e-mail to mark@markdeo.com and include your name and phone number. I will personally call you to help you assess your prospects of obtaining one of these loans.

Click here to purchase my book from Amazon.com. Remember that 100% of the profits from my book go to the charity Habitat for Humanity.

Thank you, and have a great week!

–Mark Deo

Building Loyalty by Thinking Small

Those of us that have lived in a small town know that loyalty is very
natural. People know each other and treat one another as neighbors. Companies
need to think small if they want to build greater loyalty. This works both
externally when trying to attract the right kind of customers as well as
internally when attempting to create greater teamwork and collaboration.
To apply this to improved marketing, I advise that business leaders isolate
several highly targeted audiences that all rally around the same type of
specific requirements. Then focus the ENTIRE message on their needs. This is one
way to become more important to fewer people. This can also be applied to
management by building a structure where people can work well in small teams.
When a small team accepts ownership of a daunting challenge for change, a
wonderful dynamic emerges. Everyone stops worrying about who will get credit or
the political factors. They step up and collectively perform.

Whether you are trying to create attraction externally in the marketplace or
internally in your organization I want to encourage people to get my new book
which is available at Amazon.com now.

You can get it here.
Remember that 100% of the proceeds go to the charity Habitat for Humanity.

Thoughts on the Stimulus Package

I am being asked to comment in a number of media outlets about the impact of
the President’s stimulus program on small businesses. Today I did an interview
for MSN Business. Later this week I will be talking to La Opinion. Here are some
of the typical questions I have been receiving and the answers I am giving. I
have done this in outline form so that you can read this very quickly. I’d love
to get some feedback from our readers.

How important is small business to the U.S. economy?

Small businesses drive this economy

Employ about half of the nation’s 144 million private sector workers

Account for 60 to 80 percent of new private sector jobs

Generate more than $6 trillion in annual revenue

Account for more than half of the country’s GDP

What do small businesses possess that larger enterprises lack?

Personal passion: Personally invested rather than Wall Street dollars.

Customer-centric: Deep understanding of customer needs and opportunities.

Agility: Adapt quickly to changing market conditions and new business practices.

Experimentation: NOT afraid to improvise and accept failure as a path to success.

Limited resources: Adept at accomplishing more with less with little waste.

Collaboration: Rely on social networks, affiliates, alliances and information sharing.

What are the economic challenges for small businesses today?

Crushing debt due to asset devaluation

Lost 4 million jobs in the last year and more than half are small business jobs

A significant drop in sales and productivity in every industry except Washington

Lack of access to capital or affordable funding

TARP participating banks will likely not participate limiting the ability to fund loans

Wickedly fierce competition and price erosion

How might small business’s benefit from the President’s stimulus plan?

Obama earmarked $15 billion of the $789 billion stimulus package for small business

$730 mil to reduce small business lending fees

Increase SBA loans to 90%

Attempting to open-up secondary market credit

What are some of the problems with the plan?

Incorporates a HIKE in taxes for all households and businesses earning more than $250,000

Higher dividend taxes

Limits on itemized deductions

Small businesses will likely have to shoulder a more responsibility for worker health care.

SBA was planning to guarantee $20 billion in loans yet currently on-track for less than $10 billion!

The US government is not in-touch with the needs of small businesses – they are spending billions to save 250,000 auto-maker jobs while already 4 million small business jobs have been lost!

Summary

While I cannot place the complete blame for this conundrum at the feet of this
new administration I believe the outgrowth of this stimulus plan is like taking
capital and revenue from the mouth of America’s small business owners and
feeding it to the big National Banks, Wall Street financers and government
bureaucrats. This theory enraptures Wall Street and alienates Main Street. Don’t
expect help from the government. Small business leaders are on-their-own. That’s
good for those willing to roll-up their sleeves. This is how our country became
great – on that backs of small business leaders!
We all have to answer the question: Do we have a fighting chance or just a
chance to fight? I believe the former.
Recommendations for small businesses:

Business attraction is more critical than ever:

Become a bigger fish in a smaller pond by shrinking your audience.

Create standards and systems to leverage efficiency and accommodate growth.

Be willing to destroy and rebuild your business or re-invent yourself especially NOW!

Innovate or die! It’s time to launch your most creative products, services and marketing.

Take advantage of all the great talent on the street.

This is the time to enter into collaborative alliances, affiliate relationships and joint ventures to consolidate costs and spread risk.

Localize or globalize! There is no center ground today.

Invest wisely. This is the time to buy – learn how to identify devalued assets.

Sources:

U.S. Department of Commerce, Small Business Administration, Intuit Future of
Small Business Report, Institute for the Future, Huffington Post, MarkDeo.com
–Mark Deo

To Twitter, or not to Twitter: That is the Question!

From time to time I like to share tips and articles from other business experts, and this week I’m sending an article written by my friend Corey Perlman. Corey is an Internet Marketing expert, and author of the book eBoot Camp: Proven Internet Marketing Techniques to Grow Your Business. I highly recommend that you pick up a copy of his book, and if you do so now he’s offering over $2500 in bonuses for FREE. Find out more at: http://www.ebootcampbook.com

-Mark Deo

If you haven’t heard the buzz going around about the micro-blogging site Twitter.com, you soon will. It’s by far the hottest social networking application in the ever-evolving world of Internet marketing. But, should you join the cyber-party?

Before I answer that question, let’s define what Twitter is. Twitter is a Web site where you can follow what people are saying and they can follow what you are saying. The unique thing about Twitter is that they only allow you to write your “tweet” (or written message) in 140 characters or less. Yep, in the ‘more is less’ world of Internet communication, they have the audacity to make us be short and to the point with everything we write. The nerve!

When you follow someone, each of their tweets shows up on your personal Web page. And when you tweet, each of your messages shows up on their Twitter page. One of the distinct differences between Twitter and other social communities such as Facebook or Linkedin is the more liberal screening process people seem to have on Twitter when deciding who to connect with. It’s not uncommon to follow complete strangers based on knowing very little about them. You can blink and have hundreds of people following you or vice versa. For an even clearer definition of Twitter, go to www.twitter.com and watch the video in the top right-hand corner of the page.

So, on to the question of if you should add Twitter as part of your Internet marketing repertoire. My answer is Yes and No. 🙂 Let me explain. My answer is no if you’re simply looking for a tool to sell more of your products or services. In my opinion, it’s just not being used that way and people frown upon heavy promoting and selling. However, if you are looking to create more online relationships, expand your brand, or stay on the bleeding edge of information in your industry, then I wholeheartedly recommend that you jump on Twitter right away.

A colleague of mine, Perry Belcher, had a great analogy of how to view Twitter. It’s like hosting a huge party. You wouldn’t invite someone to your party and immediately try and sell them the second you opened the door. Instead, you’d greet them, invite them in, have a conversation and potentially engage in business if the opportunity presents itself. This is exactly how Twitter works as well.
Twitter can be a great opportunity for you to engage people with similar interests in an incredibly fast and effective way. So here are the steps to create your Twitter account:

Go to Twitter.com and register for an account. It’s free!
Take some time and fill out your profile. The more thought out your profile is, the more likely people will follow you.
Write your first tweet. Let everyone know you are new to the site and find a fun way to introduce yourself.
Look for some of your friends on Twitter. You have a friend in me! Just go to www.twitter.com/coreyperlman and www.twitter.com/ebootcamp and click “follow” and you will then be following me. You’ll be able to see all the people that I follow and can follow them as well if you choose.

For the next few weeks, tweet at least once a day. It takes all of about 2-3 minutes, so don’t worry about finding the time. You can also write your tweets via your cell phone. See Twitter.com for instructions on how to do that.

A couple of final notes about Twitter:

Try not to just tweet about what you are doing. Although that is the theme of Twitter.com, most people like to offer some value in some of their tweets. For example, did you see a really good article (maybe like the one you’re reading 🙂 and want to share it with your followers? Simply highlight the article link and add it as a tweet.
You don’t have to be too picky on who you follow. It’s easy to un-follow someone if they are tweeting too much or for any other reason.
On occasion, it is ok to promote your products or services. Just remember the party analogy – don’t overdue it and annoy people. Communicate on a personal level with people and build trust. There will be plenty of opportunity down the road to conduct business if the opportunity presents itself naturally.
Write a tweet at least twice a week. That should take all of about 5 minutes total!

Ok my friends, enough with the analysis paralysis, get out there and start TWEETING!

See you in Twitterville!

Corey

This article was provided by SBA Network partner Corey Perlman, find out more at: http://www.ebootcampbook.com

Take Your Foot Off the Brake!

Have you ever driven your car on an icy road?
What happens when you jam-on the brakes?
That’s right, you slide off the road and maybe end-up in a ditch or worse.

That is exactly what is happening to many people today. They are spending entirely too much time watching, reading, listening and talking about how BAD things are in this economy. They are focusing on blaming Bush or Obama or the Fortune 100 CEOS or whoever. As a result, they can’t help but react with fear by jamming-on the brakes.

My winters in Chicago taught me that when I was driving on icy roads and I would hit the brake it would not “prevent” an accident but rather “cause” one to occur. When we blithely slash expenses, lay-off our best and often highest paid people, discontinue investment in technology, marketing, training or improvement programs we are actually RE-ENFORCING our worse fears and jamming on the brakes. I can assure you that this will cause us to end-up in the ditch. Getting out of the ditch will not be easy and in many cases will end-up costing us more than we save.

Instead, I want to encourage entrepreneurs to certainly drive carefully and more diligently. To continue the analogy, we may need to slip into low gear but maintain that steady forward motion. This challenging economic environment is presenting new opportunities (devalued technologies and businesses), the opening of new markets (Green and sustainable areas) and allowing us to access resources which have not been as readily available when times were good (there’s more great talent on the street). This is a fabulous time for small businesses to grow and prosper. My most successful clients are now investing more into growth and expansion opportunities than ever before! We are taking our own advice and investing in the release of my new book, The Rules of Attraction, the release of our new Small Business Radio weekly show and in hiring several new consultants!

Just like navigating a treacherous stretch of icy road, it requires careful planning, quick reaction time, precise execution and a healthy risk tolerance. I plan on safely arriving at my destination on time and ensuring our clients do as well. Our positive mindset, practical skills, and sharp wits will permit us to do so. Won’t you join me?

Your action plan for this week:
Turn-off the news!
Cancel the daily paper!
Stop talking about how bad things are!
Don’t buy-in to the FEAR mentality!

I predict just 18 months from today, you will look back and be happy that you did.
Have a great week!
–Mark Deo

The Power of Combined Training and Coaching

Before I go on with our business update this week let me just take a moment to welcome a new member to out consulting staff. His name is Sean Griffith and he is a new Senior Business Consultant with the SBA Network. Sean is also an attorney and Financial Consultant. Don’t hold that against him. With over 10 years of experience he has been helping clients to achieve their goals. Send him an e-mail and introduce yourself.

Companies spend over $375 billion every year on training and even more on coaching. Yet according to the American Society for Training and Development about “42 percent of the knowledge that professionals use to get their jobs done actually comes from their co-workers. This is called prairie-dogging–workers pop out of their cubicles to solicit information from the local expert. When a worker is consulting another worker, both workers lose productivity.”

We won’t even address the fact that many of these “company experts” are actually spreading the incorrect methods or techniques and that just adds to the dysfunctions that permeate many organizations today.

What if you could provide the skills that workers need to increase their performance without adversely impacting productivity?

There is. It can be accomplished by combining training with coaching.

It is easy to confuse the purpose of training and coaching. I suppose misconceptions arise due to the need for change in performance and the fact that each of these disciplines can discretely increase performance. To demonstrate the difference in a more concrete way, let’s take a look at the intent of training vs. coaching in most applications:

Training

Satisfies the knowledge gap

Typically performed in a group setting

Learning can occur from other participants

A forum for harnessing enthusiasm and team motivation

Content is based on a specified single topic

Delivers instruction of methods and techniques

Established period of time

Classroom-based

Pre-established pacing

Coaching

Satisfies the skills gap

One-to-one interactivity

Typically Learning cannot occur from other participants

A forum for harnessing enthusiasm and team motivation

Content can be based on varying topics

Assists participant to put methods and techniques into action

Varying period of time

On-the-job

Flexible pacing

There are probably many other advantages of training or coaching when viewed as separate disciplines, yet consider the combination of providing training with coaching. When these forces are combined we are able to create an environment where habits can be changed much more rapidly.

We deliver the methods and techniques in a training environment and then ensure that they are put into practice with on-going coaching. The coaching allows team members to adapt their training experience to their specific challenges on the job. This supports effective skill-building, increases confidence and solidifies habitual change.

I am proud to say that our organization has been associated with Dale Carnegie Training for over 15 years and we have seen first-hand what combined training and coaching can do to increase the performance within an organization. You can find out more about our coaching programs at http://www.sbanetwork.org
Have a great week!
–Mark Deo

No Time to Plan

It is not often that I find myself without words. I usually have plenty to say about any topic imaginable. But recently when speaking with a CEO who had asked my advice about how to deal with a particular challenge in his business, I was rendered speechless. This CEO had recently lost a key supplier to the competition thereby disrupting his supply chain and causing production and delivery problems.

As we discussed his challenges, the CEO seemed forthright and was open to hearing ideas of how to handle this. So I told him about several other clients that had experienced the same problem and how they created a foolproof method for avoiding such circumstances in the future. I suggested he engage in some planning to create a network of suppliers with contingencies for those that fail to maintain loyalty. I suggested that in the future, he should try to avoid depending too much on any one supplier unless there was an exclusive arrangement in place. I told him that the key was doing some careful planning to identify competitive suppliers and play one against another.

His response both stunned and surprised me. He said. “Wow, that sounds like it would take a LOT of time. I don’t have time for planning!” I asked him if he now had time to find a new supplier. He answered a sheepish, NO and went on to tell me about how he was working 60+ hours per week just trying to manage all of the details of his business.

I think this is a fairly common problem with business leaders today. We spend so much time working IN our business that we fail to work ON the business. Peter Drucker said that on the average one hour spent planning is worth 5 hours of execution. Are you spending enough time planning? Do you need to take a step back and look at the big picture and identify some contingencies?

This might be the very time to do just that. For more information on planning and planning resources, check out our library of articles.

Mark Deo and Cory Halbardier, as well as other SBA Network consultants are available for keynote presentations and other type of speaking engagements. Contact Cory Halbardier at 310-320-8190 to ask about availability.
-Mark Deo
mark@markdeo.com

Global Business

I want to make everyone aware of an upcoming radio show that we are doing this Friday at 4pm – PST with one of the most interesting business authors I have spoken with in a while.
His name is James Hemerling and his book is called GLOBALITY: Competing with Everyone from Everywhere for Everything. Hemerling states that the old global business model (centralized, top-down, process-driven, with influence running from West to East) will recede, perhaps vanish. It is inadequate for a world in which every global company is forced to compete: in every market, with everyone, from everywhere, all the time, for resources and market share.
Unlike developed-market leaders, emerging-market challengers have evolved new management and governance structures that are ideally suited to this new competitive landscape. In addition, it has enabled them to undercut, outthink, outwork, out-innovate, and generally outfox some of the biggest, most powerful names in global industry. What are these upstart challengers doing? How are they winning?
Imagine companies that:

Innovate at the rate of one new product development every 12 hours.

Give up the notion of “headquarters” in a drive toward global expansion.

Do away with titles and committees in an effort to improve staff development.

Expand into 50 countries by satisfying global demand that no one else could see – at the lowest, cheapest end of the market.

Hire thousands of people to staff assembly lines, instead of automating, to be more efficient, flexible, and profitable.

Achieve such high efficiency that they can give away 60% of their services and still make a profit.

Retrain workers by the tens of thousands to build a world-class capability, in less than a decade.

Again, listen to my interview with James Hemerling this Friday at 4pm – PDT. Just go to www.markdeo.com and turn-up the sound. It’s that easy!
-Mark Deo
mark@markdeo.com

Fuel for the Economy

I remember my 1966 Mustang. I sold it for $600 in 1976 before going to grad school and I’m still kicking myself over that! Everyone loved Ford in those days. But it’s not easy to believe in Ford these days. The auto giant has lost over $15 billion, closed factories, shed tens of thousands of jobs, sold-off Jaguar, Land Rover and given-up the No. 2 position in sales to Toyota!
Their new Chief Marketing Officer, James Farley, formerly with Toyota, was rehearsing for his speech to dealers, stockholders and company leaders. As the lights dimmed, Mr. Farley didn’t calmly announce his future plans or quote statistics. Instead, he spoke from the heart, revealing a depth of passion for Ford that turned the room dead silent. He became swept up in the emotional power of the moment. “I believe, in many ways, the future of Ford is the future of our country,” he said. “The work here is simply more important than the work I was doing at Toyota.” When he finished, the dealers rose for a standing ovation that left Mr. Farley momentarily stunned. After the applause died down, he savored the reaction. They were waiting for someone to believe in.
Computers, automation and mobile connectedness has had a strange impact on people today. It has caused a desensitization of emotional response. We want to quantify and analyze everything. It is draining the passion and heart from all that we do. I would like to encourage business leaders today to let their true emotions show. Cry real tears, quake with true laughter and shake with anger if you must. Don’t downplay the power of REAL EMOTION. Your team is depending on your genuine emotional display to motivate them. It is the fuel for their continued belief and a precursor to talking action!

Have a great week!
–Mark Deo