10 Things Small Businesses Can Do During a Financial Crisis

If you have invested in stocks, chances are like me, you'd be having a heart attack when looking at your portfolio. My cure is simple: just don't look at it right now. When things go down, it always go up -- maybe not next month, but next year or so. Hopefully.

Congress has just rejected the $700 billion financial bailout package and the stock market plunged 777 points, the worst sell off since 9/11 attacks. WashingtonPost.com has a breakdown of the final bailout bill while the Heritage Foundation has a good initial review of the bailout agreement. It's a scary world out there, moreso for those who have been hit hard by this housing and financial crisis. President Bush's address to the nation regarding the bailout package was the first time I listened to him in a very long time without switching the TV to home makeover shows on HGTV instead.

As a small business owner, what are you supposed to do during this time of financial crisis? Here are some thoughts:

• Hold on tight. Breathe. Keep calm and be positive. And if I may repeat my point above: while things look bleak today, things will be better tomorrow.
  
• More importantly, hold on to your cash. With banks tumbling one after the other, credits are tightening everywhere. To get any type of credit, you need more equity, assets, collateral and downpayment. Keep a close eye on your cashflow and preserve your cash. As the failed giant companies have shown, liquidity is important and if you run out of cash, then you'd be in big trouble. For example, if you have the option to lease, lease instead of buying. You need to have cash now.
  
• Improve your balance sheet. Decrease your receivables and go aggressively to collect on those non-payers. Assess your inventory and plan how to turn them into cash if you cannot sell them. If you will need financing, consider alternative sources of financing instead of commercial credit.
  
• Reduce your fixed costs. Now is the time to review your expenses and cut on unnecessary spending. Find deals everywhere -- barter, negotiate, ask for a discount and don't pay for the full price. Run as lean as you can.
  
• Keep a close eye on opportunities for this market. In a depression, it's an entirely different world, but it doesn't mean that there are no opportunities out there.
  
• Take note how this downturn is affecting your customers -- and determine what can you provide them. You may have some products that you can repackage or market differently to suit the current market conditions.
  
• Review your business model. Is the market for your existing products shrinking? Or are there products that may be needed when the market starts to rebound? Revisit your business plan (if any) and take this time to reassess the direction of your business.
  
• Market, market and market your business. Now is the time to pump up the marketing. Use guerrila marketing techniques to save on your resources and grow at a fraction of the cost. Find ways you can advertise your business without going bankrupt yourself. Find cobranding partners. And yes, market to your existing customers by giving top quality service so they can spread the word about your business.
  
• Develop multiple streams of revenue. Like stock portfolios, diversification can help you weather downturns in the economy. Determine if there are opportunities to earn from referrals, advertising, product sales, leads for traditional follow-up, and information. If you have a retail store, think of what else can you sell in your store that customers would want.
  
• Start preparing for the turnaround. Keep an eye for the future. Things will be better, and when it does, you need to think how you can take advantage of the better economic environment. You need to be prepared NOW when the market is still in the doldrums; instead of thinking how to take advantage of the opportunities when the market is already starting to recover (you'd be left behind).

Entrepreneurship and Work-Life Balance

I've been reading the book "How We Lead Matters: Reflection on a Life of Leadership" by Marilyn Carlson Nelson, Chairman and former CEO of Carlson. Carlson is one of the largest family owned businesses today and includes a wide variety of travel and entertainment businesses such as Radisson, Country Inns & Suites, Regent, Carlson Wagonlit Travel and T.G.I. Friday’s restaurant chain.

The book is a collection of stories, thoughts and reflections of Ms. Nelson. Forbes magazine has regularly named Marilyn Carlson Nelson one of “The World’s Most Powerful Women It is not the this-is-why-I-am-great book, but rather, the book is a collection of stories and reflections in life of Ms. Carlson.

One of the topics Ms. Nelson talked about in the book is work-life balance. Whether you are a solo home-based entrepreneur or Chairman of a billion dollar conglomerate, balancing family life and work will always be a constant struggle. There will always be an email to send, a paper to write, a customer to call, and a decision to make. It can be tough juggling work, career and family, more so if you have little kids.

I agree with what Ms. Nelson had to say about achieving work/life balance. She admits that she's not particularly successful at balance, but she is conscious of the choices she is making and rationalized it over time

As Ms. Nelson wrote,

The fact is that home life isn't balanced ... life itself is almost always unbalanced. But you try to keep your priorities. The trick is to make sure you have some ability to know when you and your family are seriously out of balance and be willing to adjust.

Sometimes we say we want balance but we don't want to pay for it. A man who
worked for Carlson very successfully for several years turned down a promotion because it required travel which would have meant that he would have to give up
coaching his kid's team. Now, that's a realistic approach to balance.

Life is long, and in the end, you may be able to have it all ... just not all on the same day.

How to Position Your Online Retail Business When the Economy is Down

I was just listening to the late night news, and they reported that the upcoming Holloween, Thanksgiving and Christmas seasons may not be merry holiday seasons for retailers. As the financial markets crisis deepen, there are fears that people will not spend as much this year for gifts, holiday preparations and other items (worse, they may not have anything to spend at all).

So how do you position your online retail store to ride out this tide of bad news and emerge with strong sales during the holiday season? It's a tough ordeal but here are some suggestions:

• Emphasize the convenience and savings in gas, time and money for shopping in your online store instead of driving to the mall. There are no lines, no parking hassles, no parking fees, and no crowd. Plus, no waiting for the store to open because your ecommerce store is open 24/7. Use this pitch in your email campaigns and in the copy of your website
• Depending on what you sell, present yourself as a one stop shop where customers can get most (if not all) of the gifts for their list. If you have not done so, invest in technology that will allow your online store to include gift recommendations and guides as well as gift finders.
• Consider free shipping -- with conditions. You may choose to give free shipping only to those who spend a certain amount (e.g. $75 worth of items) or to your email subscribers or to your best customers (assuming of course you are tracking who your best customers are)
• Give free gift cards or discounted offers on the next purchase. In lieu of free shipping, you can offer a discount for repeat purchases within a certain timeframe. Since the customer has bought gifts for the people in their list, why not entice them with discounts so they can buy gifts for themselves instead?
• Promote gift cards. Gift cards have become the gift of choice of many gift givers. It is so convenient, and ensures that the recipients will actually love their gifts.
• Review your sales copy. Make sure you clarify your store's value proposition. The last thing you'd want is for the customer to check out your product -- and then buy it from another store. Put yourself in the shoes of the customers and ask, "Why should I buy from you?"

And if you haven't done so already, start marketing your holiday sales now.

Randy Pausch’s Lecture on Time Management

Randy Pausch, author of the best seller The Last Lecture, gave a very inspiring lecture at the University of Virginia on time management. A computer science professor, there are definitely more famous time management gurus than him. But what makes this lecture special is the fact that this is a man dying of cancer, yet he is talking about time management.

Randy broke into the scene, so to speak, when he was asked to participate in the last lecture series at the Carnegie Mellon University. His last lecture was called “Really Achieving Your Childhood Dreams." Unlike other lecturers who was asked to pretend that the lecture is their last, Randy knew that he was living on borrowed time. He was diagnosed with pancreatic cancer, and given only 3-6 months of "good health". His lecture was turned into a book.

Randy died on July 25, 2008. Be inspired and learn from this special man. Watch the
Time Management lecture video

10 Critical Elements to a Successful Google Adwords Campaign

Search engine marketing company MoreVisibility.com has released an informative white paper on how to achieve your desired return on investment using Google Adwords.

If you are using Google Adwords, or would like to have some ideas on how to do pay per click marketing without busting your budgets, here are their 10 tips:

1. Keep your campaigns and ad groups tightly themed, as this will allow you tailor your ad copy more accurately. Also, this could also help Google determine the context of your groups, particularly if you have opted in the Content Network.
2. Use analytics and conversion tracking tools, including the tools offered by Google. These tools can help you optimize your ads and make bidding decisions.
3. Test, test and test. You can only know if you are employing the best strategy if you compare it with something else. Google Website Optimizer tool , for example, helps you test the effectiveness of your landing pages.
4. Monitor and improve your quality score. The quality score can impact your visibility and ad costs in Google.
5. Have a good mix of short and long tail terms in your campaign. The more generic or broad keywords are more costly and tend to generate less qualified visitors. Use the Keyword Research Tool.
6. Use the campaign options Adwords offer such as Geographic Targeting. Break your keywords or ad groups into separate campaigns if you are going to target some specific areas vis-a-vis your country or world.
7. Use Day Parting/Ad Scheduler option if you offer users the option of calling you but you are not available 24/7. Also consider this option if you have an idea regarding traffic patterns of your site.
8. Consider using staggered budget delivery if you are running timed promotions or offline marketing efforts so your ads achieve the maximum exposure when you need it most. However, be careful when using this option.
9. Consider Google options beyond traditional Adwords, including TV, print, mobile, radio, display and video ads. Also consider placement targeting. Also, consider Google Ad Planner http://www.google.com/adplanner to allow you to research the sites associated with your target audience.
10. Analyze competitive sites and user behavior with Google Trends http://www.google.com/trends . The Trends for Website feature allow you to view and export data on how popular your site is compared with your competitors.

Book Review: How to Succeed in Business Using LinkeIn

I was excited to get the book "How to Succeed in Business Using LinkedIn" by Eric Butow and Kathleen Taylor. I think I am one of the few remaining business people who do not have a LinkedIn profile as yet, and I was hoping this book would give me the reason why I should use it and how I should use it to further my business goals.

But I was turned off by its technical formatting ala books such as "Microsoft Powerpoint Step by Step." The book focuses too much on explaining each and every button and feature of LinkedIn -- from discussing the elements of the LinkedIn homepage to inviting contacts to connect to how to search for possible contacts. It feels like the Customer Service section of LinkedIn in book format. If you want a step by step guide to using LinkedIn, this is the book for you.

For example, the book lays out the various account options of LinkedIn including the paid ones. But it fails to tell me which plan is suitable given my possible objectives for joining. Or even why I should pay for the upgraded account and not just use the free option. Instead, the book tells me that

"If you're unsure which plan suits your needs, click the Help and FAQ link in the Company area at the bottom of the LinkedIn homepage."

Then the authors write:

"If you have a promotional code, which acts as a coupon for a discount on LinkedIn services, type the code in the Add a Promotional Code box."

Duh. I don't need to buy a book to know that.

My frustration stems from my expectations given the title "How to Succeed in Busines Using LinkedIn" and then the book turns out to focus more on "How to Use LinkedIn" with very few sections devoted to the "How to Succeed in Business" part.

There are great tips -- but they are few and far between and buried in the explanations on how each button or link works in LinkedIn. I like the examples of how to write a compelling message to contact another member and how to decline invitations to connect. I wish there are more of these tips so the book can live up to its title.

In fact, I find the press materials sent to me by the publisher better than book in explaining why I should have LinkedIn profile. Here's what the publisher sent me:

How Your Small Business Can Succeed Using LinkedIn

1. Set your company apart. Keep a detailed company profile to present a clear vision of your company to the world.

2. Showcase your expertise. Answer questions in your subject area and encourage your employees to do so also. Prospective clients will love to see who is the thought leader in your area and when your answers are highly rated, they know who to call for the next job.

3. Keep your connections strong. Utilize your new, current, and past connections. LinkedIn was designed to network, so utilize those connections to find new clients, search for new talent, and get business in unexpected ways.

4. Stay on top of the latest in your industry. What better way to keep a pulse on the ideas and trends in your industry than in a discussion group? Learn about events and conferences, leads and prospects, new products and services, and other information to keep you ahead of the curve.

5. Find great service providers. Utilize LinkedIn's service providers page to find people who come highly recommended from people you respect.

6. Discover new talent. Comb through your network to find great new talent or utilize the Jobs page to recruit new people to your organizations.

If the book was only organized based on the above, I think it will live up to its title well. As it is, the book is a more of a technical guide to using LinkedIn and not a guide to help you succeed in business using LinkedIn.

Hurray for September!

I am so relieved that it is finally September.

While I love summer -- daily swim in the pool with the kids and all that sun -- I am just excited to see my favorite TV shows come back with their new seasons.

TV viewing during summer is torture. After the season of "So You Think You Can Dance" ended, I felt there's nothing to watch on TV anymore. I had to switch back to my default channel -- HGTV --where I can just let the TV drone in the background and all I need to do is to glance at the decorated space at the show's ending.

This Monday, I was so pumped up to watch the new season of the campy Gossip Girl. For some reason, I am hooked on this show. Maybe it's the Dynasty vibe (how I loved Joan Collin's Alexis Carrington character!) or the drama of the rich and beautiful. That's why I am also looking forward to the new season of Dirty, Sexy Money.

Then of course, there's the sci-fi shows. I can't wait to see Heroes , as well as my ultra-favorite, the perplexing Lost. Also the dramas - Grey's Anatomy, Eli Stone, among others. I am also looking forward to see some new shows such as Fringe, Robinson's Crusoe and the Christian Slater action drama.

Just like me, entrepreneurs need to relax as well. So what's your guilty pleasure?

How to Protect a Trade Secret

Trade secrets are anything that is not known in the industry or not revealed in public that can give your business a competitive advantage. Some of the most famous trade secrets include the formula for Coke and the recipe of Kentucky Fried Chicken.

Trade secrets are commonly not patented because doing so will force you to reveal the trade secret in your patent application. If your busines has a trade secret, the main question is how do you protect it?

Leonard DuBoff in his book "The Law (In Plain English) for Small Business" gives several ways you can protect your trade secret:

1. Physical security = restrict access to the area where your trade secret is used. Employee access should be on a need to know basis and carefully review the credentials of workers who deals with processes that require knowing and handling the trade secret. Don't give automatic free access to workers, and be very careful in terms of data handling and storage (e.g. you don't want a laptop that contains your trade secret to get lost).

2. Employee access = establish procedures to control employee access to the documents. Clearly label all documents, pictures or sketches containing trade secrets

3. Fragmenting information = Prevent employees to knowing all parts of your trade secret. Fragment the information where one person handles one part and another person handles another part. That way, a single person cannot hurt you.

4. Confidentiality agreements = Always have employees sign non disclosure and confidentiality agreements. Get the help of a lawyer to draw up confidentiality agreements, including outsiders who need to know the trade secret (e.g. a person thinking of engaging in a licensing agreement with you to further develop your trade secrets).