small business

Small Business Government Loans – A Letter to the President

Dear President Obama:

I’m pleased to hear that you took time out of your busy schedule yesterday to meet with 20 CEO’s of some of the top businesses in the country. I hope the CEO’s of  General Electric, Google, Intel, Comcast, Dow Chemical, Cisco, Honeywell, PepsiCo, Motorola, Eli Lilly, DuPont, Boeing, Duke Energy, UPS, Pritzker, and Amex offered up some good economic solutions.

I read where you stated, “This morning I hope to elicit ideas from these business leaders that will help us not only climb out of recession but seize the promise of this moment.”

I’m not exactly sure what that means but I’m going to assume it means you believe that this point in time offers an opportunity to get the economy going. I hope that’s what you mean, sir, and with that in mind I’m going to make a couple of my own suggestions. First may I offer some information and statistics about small business.

I think you should know that the group of 20 companies you met with employs less than 3,000,000 people. According to an agency of the United States Government (Small Business Administration) small businesses employ approximately 60,000,000 people. There are about 23 million small businesses in the US so I don’t expect you’ll find time to meet with all of us. But maybe some of us?

The truth is we’re a very diverse group and you can’t count on us to agree on all things. Pretty much all of us are proud to be small business owners. We’re proud to be able to support ourselves, our families and our employees and their families. Oh, and just in case you’re thinking that we might employ a whole lot more people than big business but it is big business that is the major contributor to our Gross Domestic Product, I wouldn’t blame you. I figured the same thing before I looked it up. The SBA says that small business contributes more than 50 percent of the GDP. Pretty much all these numbers are in here.

We also make up 97 percent of exporters and produce 29 percent of all export value. How’s that for contributing to the balance of trade?

One last statistic that I find interesting – the latest figures show that small business creates 75 percent of the net new jobs in our economy. Kind of makes you proud of us, doesn’t it?

So here is my suggestion to help get this economy really going again. It’s based on talking to clients, customers and friends of mine who own small businesses.

Get the banks to lend them money again.

These big companies are sitting on trillions. Banks won’t lend to small business without making them jump through processes that make loan sharks look downright tempting. I know owners who need more equipment in order to expand and hire more people. They have the sales but they can’t accept them without expansion. And, the same banks that used to come to two of these particular companies begging for their business now won’t let them get to second base.

Besides meeting with these CEO’s yesterday, you also made an announcement that you are going to help get small business government loans into the hands of small business owners. That was right after the SBA quietly announced that the agency will end its existing Community Express loan program on April 30th.

Then according to the SBA’s announcement, it will replace Community Express with two new programs on March 15. One is called “Small Loan Advantage and the other is “Community Advantage.” Both programs will go up to $250,000 and carry SBA’s basic 7(a) program guaranty structure — 85 percent for loans up to $150,000 and 75 percent for those greater than $150,000. But the loan application process will be more streamlined than basic 7(a).

Then I read that Small Loan Advantage will only be made by the nation’s largest banks that are in the agency’s “Preferred Lender Program.” These banks have historically made larger loans that are 50 percent guaranteed up to $350,000 under the Express Loan Program, and 75 percent guaranteed up $5 million with basic 7(a).

From both personal and anecdotal experience, these big banks only want to make big loans. In over 40 years experience I have never met a small – small business owner who actually ever got an SBA loan. I do know quite a few people who have tried only to be turned down or turned off by the process and red tape.

Maybe you are familiar with Jerry Chautin, Mr. President. He is a volunteer SCORE business counselor, business columnist and SBA’s 2006 national “Journalist of the Year” award winner. He has a good article about the new programs and the death of the old one here.

He also says that “Small-business owners have reason to be a bit less merry this holiday season,” as a result of these changes that you

I don’t know who is getting these loans, Mr. President. But, I do know who isn’t getting them and they are business that have been around for years with good financial histories. The SBA programs aren’t getting out to everyone.

I think you need to spend some time with small business owners. And, please not only the larger ones. Home-based businesses now make up over 52 percent of all small business. It would be beneficial if you talk with some of them too.

One last thing, Mr. President, red tape is a big problem for small business. The Small Business Administration states that it costs us annually $1.75 trillion to meet federal regulatory compliance. We could create a lot of stimulus just by eliminating some of the federal regulations we have to live with. Let’s start with the 132,000 new ones that were added just since 1982.

So that’s about it for now. I appreciate you taking the time to read this. I’ve been a small business owner and entrepreneur most of my life. I’m 61 years old now and I still believe in the dream of owning your own business. At least 23 million other Americans agree with me.

Respectfully,

Bob Poole

If You Can’t Sell It – Forget It

There are a lot of great ideas floating around. Megan or Paul will even help you create new ideas. I bet you have a few of your own right now. Are you going to do something about it? Or, will you just let it simmer on the back burner for a while longer?

Whatever you do I want you to know one very important fact that will make all the difference as to whether that idea comes to fruition or not.

You ready? Here goes.

It might be the greatest idea in the world, but if you can’t sell it, you might as well forget it right now.

That might sound harsh but it is a fact. Think back to the last time you had what you thought was a great idea but didn’t pan out. I’ll bet you right now it didn’t work because you couldn’t sell it. You couldn’t attract others to follow you. Sure, people will tell you what a great idea it is but ask them to buy it. And, buy can stand for things like recommend you, help you, follow you, invest or actually purchase from you.

If they say “No” then you need to either rethink your idea or find out if you just don’t know how to sell it.

And, don’t forget – Listen First – Sell Later.

Fear of Flying Solo

“Stop the plane at the end of the runway. That last landing was a little hard and I want to check the tire.” With those words my flight instructor jumped out of the 1938 Luscombe 8A taildragger turned around and smiled at me and said, “Make three take-offs and landings. When you’re done pull it up to the pump.” He shut the door and walked away never looking back as he strolled back to the hanger.

If you to fly there comes a day when it is time for you to solo.

My day occurred nearly 34 years ago on November 11, 1976. My thoughts turn back each year to that day when the signs of fall appear with the squirrels around my house going crazy gathering acorns and leaves starting to swirl at  my feet as I walk along the creek.

So what does this have to do with business? Well, today a lot of people are considering or have already started up their own businesses and if my email is any indication – many of them are afraid. I was thinking about fears I’ve faced in my own life and pushing that throttle in and heading down that grass strip runway while knowing I was the only person in the plane could have been an extremely fearful experience for me.

But, I wasn’t afraid.

Oh, I’ll admit to a lot of feelings as I pulled back on the stick and watched the ground disappear. Euphoria and butterflies hit all at the same time – but not fear. I had been practicing for that moment and had put in twenty-hours of flight time with my teacher flying in all kinds of conditions, practicing stalls, emergency landings, and anything else I might face when I flew solo.

Running your own business is a lot of hard work and it is easy to get discouraged. You can start focusing on failure when things aren’t going according to your business plan. You might begin to think that you’ll never succeed – that it will never get off the ground.

But, you’ve been practicing to do this all your life.

Are you ready to solo? Are you ready to stop being afraid?

There is only one way to find out and that’s to do it. Activity is critical for you. Analytical processing, asking others for advice, planning, reading books, and studying the masters have their place but even more important is the doing.

You are ready.
Believe it.
Start doing.
No more fear.

Thriving on Responsibility and Freedom

Last week I wrote a blog post at The Water Cooler Blog expressing my opinion that having average employees is a recipe for failure for small companies. Actually, I think it holds true for all size companies but I’m more concerned about smaller business and start-ups like some of you might have or be contemplating.

I said:
Big businesses tolerate and cultivate average employees.

Small companies can’t afford to have average employees.

Everyone working in a small company must be exceptional leaning towards extraordinary.

Average in small business leads to failure.

Always.

Today, a friend sent me a link to a slide deck written by Netflix CEO Reed Hasting that reinforces my opinion. For example, Hasting says at Netflix “adequate performance gets a generous severance package.” They cannot tolerate average or adequate. I don’t think of Netflix as small as they are now a public company. But, if a public company can think this way, I can only imagine how this kind of progressive thinking might help a small company.

I’m going to give you the link to the slide deck. It very well may be the best expressed description of what a company expects from itself and its employees and what it is willing to do in return that I’ve ever read. He calls it a Reference Guide on Freedom and Responsibility Culture.

Take time to read it and see if it resonates with you. You might really enjoy reading about their vacation policy. Hint:  They don’t have one! In fact, they don’t have many corporate policies. I think you’ll find their thinking quite unlike what you may have
experienced in your careers. It doesn’t have to be that way.

One last thought from the deck just to convince you to take the time to read it.

Hastings also says:
Responsible People
Thrive on Freedom,
and are Worthy of Freedom.

Maybe this is how you’d like to see your company.

Imagine the possibilities.

Recipe for Success When the World Is Falling Apart

Last week, I met with people at 6 companies who told me how well things are going in their businesses. Some of them are start-ups, one 5 years old and the rest have been in business at least 10 years. They are all very busy and making money. The only common problem I heard voiced is they are too busy and want to dial back the chaos a little bit.

What are they doing to stay both so busy and profitable? 
  • They know how to tell a prospect why they should do business with them versus all the other competition including doing nothing.
This, by the way, immediately separates them from almost all their competition.
  • They give exceptional customer service and have exceptional products and services.
  • They follow-up with customers proactively to make sure expectations weren't met. They all want to exceed the customers expectations and they work to make that happen.
  • The communicate with prospects and customers all the time using all types of media. All of them are using things like Skype video,
  • To a person they follow my advice of sending out cards, letters, and pictures just to say hello, thanks, happy day, etc.
  • They consistently blog and they engage their readers by asking them what they want to read.
  • They make it point to talk about customers and other people on social networks at least 6 times more than they talk about themselves.

IStock_000011756075XSmall And, most importantly, every single one of them said they do not pay any attention to main stream media's cry of doomsday, that the world is ending as we know it, and all the reasons they should be afraid.

Sales Isn’t Sexy

Business owners talk to me about marketing. They hardly ever mention the word sales. My experience is that we quite often need to discuss sales instead of marketing because it the selling process that is holding them back from reaching their goals – their sales goals.

These companies always tell me they have sales goals but that is the only time the word sales gets mentioned. Then it is back to marketing.

Why is that? Well, marketing is sexy sounding. Think Ad Men. And, besides, they went to college and got a degree in marketing – not sales.

Sales conjures up visuals of used car sales men wearing plaid or Danny De Vito in Tin Men. Not sexy at all.

Here are some other reasons many business people like to talk marketing instead of sales. 

  • Most people don't know how to sell. Even many people who call themselves salespeople don't do a very good job at it which is why there is so much turnover.
  • Selling means facing rejection which isn't something that comes naturally to most of us. 
  • There are lots of books and information about marketing much of which resonates with people.
  • On the other hand, sales books and education tends to focus on tactics which feel like (and are like) manipulation which then turns people off to the idea of selling.
  • Marketing isn't especially measurable.
  • Sales is measurable which means you can't hide behind smoke and mirrors.

So, how do you learn how to sell if you've never done it and you don't know where to start? First, forget about tactics. Start focusing on the customer and prospect. You need to focus on providing value while building trust. You can't do that if you make the sales process all about you. There are lots of ways to build value and trust. We'll talk about that tomorrow.

Thank you to all the people and friends who wrote or called over the last couple of weeks concerned about my health and the state of our home from the storm damage. My carpal tunnel problem is much better and I can resume typing. With contractors and painters all over the house, Joann and I took time off to visit family and friends in Pittsburgh and Ohio. I very much appreciate your kind thoughts and well wishes!

How To Stop From Getting Screwed In Your Small Business

A couple of days ago I wrote a post entitled – Insurance Companies Tell Small Business "You're Too Old and Expensive."

This is really serious and it is happening right now. After reading my post, one of my clients called to tell me his insurance company wants to raise his rates 34%. He is outraged and he should be. Of course, he is looking for a solution that isn't going to suck the profit from his small business so he can pay the insurance companies who are adding on rates like a loan shark charges interest. In fact, the comparison between our venerable banks, insurance companies and loan sharking is becoming more accurate every day.

At least the loan shark tells you he's going to screw you. The immoral and unethical managers who lead our financial services companies just raise your health care and interest rates and say take it or leave it – knowing that too often you have no other choice.

Well, there is another choice but that would require our elected representatives from the Oval Office on down to state and local government to grow some balls and do what they say they were going to do when they got elected and that's represent "we the people." Sadly most of them are so tied to the billions of dollars they receive from banking, insurance, legal, health care and pharmaceutical lobbyists that "we the people" don't stand a chance. 

But, there is one thing we can do. Besides increasing their personal wealth and power there is one other thing that politicians need and want even more. They want to be re-elected. One term is never enough. And, two terms is like being on crack to a bureaucrat. They've got to have more and more!

So here's the only chance you have. Small business makes up over 50% of the Gross Domestic Product. Over 70% of all the businesses in the US are classified as small business. Organized you have an opportunity to say enough is enough to your elected representatives. Organized you represent enough votes to keep them out of office.

There are over 25 Million small businesses in the country. And yet, an organization that calls itself the oldest small business advocacy association only has 150K members. That's not even one percent of the potential. What if an organization formed that really represented small business and was able to get 5% of the potential small businesses to join? That would be 1,250,000. And, what if the members paid $25 a month in dues? You'd have $375,000,000 to run what should be a small organization and to make your views known to the politicians.

You can do the math and see what would happen with modest growth of this organization. And, these 25 Million small businesses represent approximately 60 Million potential votes. In 2008, approximately 122 Million people voted.

That means that small business represents a potential of almost half the voters who voted in one of the most turned-out elections in our history. Do you think that might get someone's attention who wants to get elected and re-elected?

Are you an entrepreneur that knows something about non-profit organizations? Here's an opportunity to lead one of the greatest groups of people in the country. We're ready for someone to lead us. Are you the one?

Insurance Companies Tell Small Business “You’re Too Old and Expensive.”

First it was banks ripping off small business by raising credit rates and fees in advance of laws going into effect that Congress passed against the unethical and probably criminal practices the law was to prevent happening. The big banks thumbed their noses at Congress and the President and did it anyway while the politicians continued to look the other way at billions in lobbying and donations from these same houses of finance.

Now it seems that the insurance companies have decided to follow the same plan. An article by Reed Abelson in Sunday's New York Times reports that "as Congress nears votes on legislation that would overhaul the health care system, many small businesses say they are facing the steepest rise in insurance premiums they have seen in recent years."

Ms. Reed states that small businesses are seeing their premiums rise and average of 15% for the coming year which is double the rate of last years increases. Because big companies have more negotiating clout, their increases are generally not as steep.

So, what do you think? Are these double digit, double rate increases the result of rising medical costs. Or, do you think like I do and like many medical insurance experts think?

Insurance companies are playing the same game as the banks. They see that their feeding at the trough is going to be curtailed so they are simply bowing to Wall Street pressure and and raising premiums to get ahead of any legislative changes that may curtail their profits.

Illegal – no.

Unethical – you're damn right!

So, are you going to do something about it? Google the contact information for your Representative and Senators. Call or write them and tell them that the backbone of American business is being slowly squeezed to death by Wall St. bankers and insurer and that we've had enough. 

Or,you might be hearing the news that Walter Rowen, who owns Susquehanna Glass in Columbia, PA was told by the insurance companies. Since small companies can't join a large pool for their insurance, they are at the mercy of the companies for pricing. Mr. Rowen was told his two dozen employees were getting too old and very expensive.

They demanded a 160 percent rate increase. He ended up having to get less of a plan than they had enjoyed before and pay a 44 percent increase.

You and your company could be next.

Read Ms. Abelson's entire article here.

Inbreeding

Look up “banks and shuffle” on Google and you get over half-a-million hits. I checked it out today when I saw a news article about Bank of America shuffling executives. I wasn't surprised because as long as I can remember banking executives have either been shuffled from one position to another or from one bank to another. I can't think of any top banking position that has been filled by a C-Level executive from a different industry. I'm sure it has happened but not often. Most other industries will hire talented people from other sectors in order to gain from their diverse experience. Banks hire bankers.

It seems to me that the financial services executive shuffle is kind of incestuous in nature.

The result may very well be that all the shuffling does is continue business as usual. If you're experiencing the problems that Citi or Bank of America are right now does it make sense to keep hiring the same people or moving them around the executive suite? Isn't one of the definitions of insanity to continue doing the same thing over and over again and expect different results?

I like to think that small business owners understand this better. We have to hire the most talented people we can find. There aren't too many old boy's clubs in small business. If you're not hiring the best people your business will suffer – and it will show up quickly on the bottom line. 

There are a lot of very talented people available right now – all ages, experience, and backgrounds who could bring a wealth of new ideas to your company. 

Someone should let the banks know.

Learn How to Recognize and Sell to the Four Personality Types

People do business with people that they know, like, and trust. Since we can’t pick or choose the “type” of person we are most likely to trust and like right away, we need to learn how to effectively with everyone’s personality style.” Learn how in this report and start increasing your sales right away!

Selling To The Four Personality Types

Close