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Options to Confront and Manage Business Debt

Half of all small businesses fail within their first five years because of insufficient capital, poor credit arrangements, and business debts. The difference between a successful business and a struggling business is taking on the right amount of debt at the right time. When dealing with business debt, there are a few options to change a struggling business to a successful one.

Borrowing in business makes sense in order to create a cash flow, financial growth, or expand. However, there is a fine line and it is easy for small businesses to overextend themselves by borrowing too much without the capacity to make back what is owed.

There are two main ways to deal with debt. First is to save the business while settling debt. Second is to allow the business to fail, but with a well constructed exit strategy. This means financial consequences will be less.

In order to save the business, it may require taking money out of pocket to put into the debt payoffs. This is considered a calculated risk that could fail as easily as succeed. This option should only be done if it can be justified as a short term tactic that promises a long term payoff.

If private funds do not work, then areas need to be identified where costs can be reduced. An unused space could be subleases. Unused equipment could be sold off. The workforce could be reduced, although this is not attractive and has other consequences that come with it.

Talk to customers often to figure out how to increase exposure and improve the business model to earn more revenue. Offer best customers markdowns if they pay quicker. Contact suppliers to arrange discounts or deferred payments.

Creditors should be contacted and informed of the current debt situation. Ignoring lenders will make the situation worse. Tackling a debt problem in the early stages will make the process easier to resolve. It is in everyone’s best interest to find a solution, so lenders should work with businesses to lower interest rates, increase the credit line, and restructure repayment options.

Dealing with multiple creditors or collection agencies can take away from the important responsibility of running the business. If this is the case, debt problems should be outsourced to a professional debt settlement consulting company. Reputable consultants can negotiate with creditors on behalf of the business to settle debts for less than what is owed.

Loans can be consolidated into one payment that can be reduced into monthly costs without negatively affecting credit. Business debt consolidation loans allow owners to deal with a single creditor as opposed to many. This could allow for a loan with a lower interest rate.

This process works best when using a debt consultation company. They will negotiate a new loan, collect payments from the business, and pay off previous creditors. The loan can be unsecured or secured with business assets.

The last resort option is a Chapter 11 bankruptcy. This route is only used to salvage a company for parts. Do not choose this option is the business debt is temporary and the company is otherwise viable.

Bankruptcy is an expensive and complicated process that requires services of an experienced bankruptcy attorney. This is not an option for simply reducing debt burden. If the business assets are worth less than the debt, bankruptcy allows owners to pay only what the assets are worth and not the entire balance due.

If a business is on life support with unmanageable debt, shutting the business down may be the best option. Do not just close the business without settling debt or else creditors can sue owners or go after personal assets. There are a few options for failing a business.

Sell the business to pay off lenders. Liquidate assets and negotiate with creditors for distribution of assets. Declare a Chapter 7 business bankruptcy to turn over the business to the bankruptcy trustee. In a Chapter 7, assets will be sold, outstanding accounts receivable will be emptied, owed taxes will be paid, and remaining funds to creditors will be distributed.

Designers Don’t Build A Web Business Part 1

Who makes your business?
Does the builder of your office make your business work? Does the sign company make your business work? We would never suggest that any business is successful except for the efforts of the owner/entrepreneur, but when it comes to web sites we think differently.

Why would we think that a web designer will build us an online business? Just because they say they will make your site stand out in a crowd? Just because they say they will drive traffic to your web site?

Maybe.

Maybe we believe the marketing hype because we want to, and we want to because we don’t have the technical know-how to make our own web site. Well, we don’t have the building skills to construct our own office either and that never stopped us from building our business.

The lack of technical know-how is no reason to hand over control to a web designer who knows nothing about our business or the market we serve. In fact it is downright dangerous and costly to follow a web designers ideas about building a web business.

What does a web designer know?
A web designer, having graduated from a college course in web design, knows how to build a web site. They do not know how to build a business. And this is where most of us get off track. We think that once the web site is designed then we are in business.

Compare this to buying an automotive repair shop with the hydraulic lifts and compressor, the work bench and office, and we would call this a working auto repair shop – but it is not an auto repair business until WE make it so.

We accept the recommendations of web designers and web marketing people and then believe that that is all there is to running a web business. The experts sold us a working web site, not a working web business. In fact, they didn’t sell us much of anything at all.

A custom web design in the digital virtual reality is something of a laugh because nobody starts from scratch, at least not for us small business guys. And that is not going to change, but maybe we will realize when we are paying too much for recycled ideas and copied code.

You are the business
After our web design has been built the biggest part of making it a business is yet to come. After the web experts have been paid all we have is a shell, just like the auto repair shop. Everything works and functions just fine, but there’s still no business for our new web site.

Unfortunately, if we had listened to the web designers we would have filled our web pages with filler and not real content. Filler is just a bunch of talk about our products or services and what a great business we are and why everyone should buy from us.

Who really believes what a company says about itself? Why would anyone, even in the market, care about filler that is very suspect?

We have been tricked
While we have been following the logic of web designers we have missed the shear genius of our own information. We have been tricked into thinking only about ourselves instead of thinking about our market. And it is not just the web industry that tricked us this way – it is old school offline marketing & advertising that tricked us first.

Putting the focus on our market is both the heart and brains of a business web site. We must first put our knowledge and experience for solving problems into the business and then we must talk to our web market as though we know them by name. And we do know them by name when we address them as a group of like minded people.

Standing apart
If we were to put our clients first and speak to them about their problems and how we can help to solve those problems then we would be one of the first small business web sites to do so. Our web content would be very different from any of our competitors. Our keywords would be more specific to the problems we solve. We would be giving our market what they really want and our web marketing costs would drop like a stone.

If we were to ignore all the experts in the web industry and paid full attention to our market there would be a big shift in how we did business. This much is pretty obvious and it’s hard for us to deny the value of communicating directly to our market with what they want to know. But, it’s hard not to shake with a little fear about wandering away from the comfort of doing what everyone else is doing.

2 Considerations
#1) If our web designer didn’t build us a web business, then they haven’t build anyone else a web business. What this means is that by being true to our business we have no competition.

#2) The risk in financial costs of attracting our real web market is tiny and the time it takes to build this into a business is less than the time we have already spent spinning our wheels and listening to others.

To make a web business happen we need to be engaged with our market and not expect anyone else to make it happen for us. We can look for help and learn from others, but if we expect designers to build our web business for us it will just another cookie cutter web site as they do what they have been trained to do.

To take control of our web business we need to know what our web market wants and what they need from us. This is not so difficult to do. To understand any web market, and our market specifically, you can find insights in the article in this series titled “Designers Don’t Build A Web Business Part 2″

Top 10 Marketing Books for Small Business Owners

Unlike big business owners, small business owners have the burden of taking care of every single aspect of their business – recruitment, marketing, finance, accounts, managing employees to managing vendors, and so forth. But here we focused only on books that can help you gain marketing knowledge and skills. Here are the top 10 books on marketing which we believe are helpful for new as well as established small business owners.

Book # 1: The New Rules of Marketing & PR – David Meerman Scott

In the new marketing scenario, the methods such as ad copy, etc. do not bring results for your business. With the popularity of smartphones and other devices and proliferation of the Internet, new methods, rules, etc. of marketing have evolved. This book discusses the importance and benefits of using such techniques.

David M Scott provides fresh examples of success from various industries and businesses across the world. He highlights the new tools and techniques that marketers should use to communicate with their buyers directly – Twitter, Facebook, LinkedIn and YouTube. In short, this book is a guide that offers actionable strategies and insider tips that can be implemented immediately.

Book # 2: Word of Mouth Marketing: How Smart Companies Get People Talking – Andy Sernovitz

This book by Andy Sernovitz emphasizes the use of word of mouth marketing for businesses. The book elaborates purpose of blogs, social media, viral emails, etc. – when to use them and how to make them work.

Word of mouth is an effective tool to share information quickly and easily to promote businesses. It is an effective tool that can promote your business via your customers, friends and relations.

Book # 3: Guerrilla Marketing: Easy and Inexpensive Strategies for Making Big Profits from Your Small Business – Jay Conrad Levinson

This book furnishes strategies for Internet marketing, tips on using technology like pod-casting and automated marketing, programs for targeting prospects, cultivating repeat, referral business, management lessons in the age of telecommuting and freelance employees, etc. – exclusively for small businesses.

Book # 4: Duct Tape Marketing: The World’s Most Practical Small Business Marketing Guide – John Jantsch

John Jantsch is a well-known expert in small business marketing. In the book, he discusses all the proven tools and tactics together in a step-by-step marketing system. This road map helps small business owners in knowing what they need to do to market their businesses.

Book # 5: Smarter, Faster, Cheaper: Non-Boring, Fluff-Free Strategies for Marketing and Promoting Your Business – David Siteman Garland

This book provides strategies for building, marketing and promoting businesses. These techniques are smarter, faster, cheaper and therefore save your time and money. The book is equally helpful for start-ups as well as those who are already in the market for sometime.

Book # 6: Marketing Shortcuts for the Self-Employed: Leverage Resources, Establish Online Credibility and Crush Your Competition – Patrick Schwerdtfeger

This book provides effective practical strategies and tactics – a complete tool kit to use resources sensibly, to establish online credibility. If you apply these strategies, you can get good results for your business within a brief span of time.

Book # 7: Ultimate Small Business Marketing Guide – James Stephenson

This book is an essential guide for every business owner. James Stephenson presents in this book 1500 great marketing ideas that are sure to boost your sales revenue, profits and customer loyalty and also to help you stay ahead of your competitors.

Book # 8: Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth – Stephanie Diamond

Marketing for small businesses was difficult in the past. But today, it is not the case. Web marketing enables small businesses to take advantage of marketing opportunities and win new customers.

The book ‘Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth’ focuses on different ways of marketing with a detailed strategy to put them into action. The main content of the book comprises checklists – niche, brand, story, search, content, social media tactics, traditional tactics and results. This book helps you implement web marketing strategies.

Book # 9: Likeable Social Media: How to Delight Your Customers, Create an Irresistible Brand, and Be Generally Amazing on Facebook – Dave Kerpen

This book is a key to unlock the door to new opportunities. It tells you about how to build brand awareness by engaging customers in social networking sites like Facebook, Twitter and other social media networking sites.

Book # 10: 500 Social Media Marketing Tips: Essential Advice, Hints and Strategy for Business: Facebook, Twitter, Pinterest, Google+, YouTube, Instagram, LinkedIn, and More! – Andrew Macarthy

This book is a guide to small businesses. It provides 500 social media marketing tips covering all the web’s biggest players like Facebook, Twitter, Pinterest, Google+, YouTube and others. These tips will help you build brand awareness in social media networks, attract and engage your customers and ultimately help you increase sales.