WomenEntrepreneur.com: Eve Gumpel

Big Ad Idea for Small Business

Eve Gumpel — Wed, 18 Nov 2009 10:41:32

If you've ever wished your business could afford a radio, TV or print advertisement, now may be your chance.

Randy and Cindy Gunter of the Gunter Agency have created a new website called Ad Diner, offering professionally created ads--TV commercials, radio spots, billboards, direct-mail and print ads--at a fraction of the price a typical advertising agency would charge. They're even selling radio spots for the holiday season.

The Gunters say they've been thinking about this idea for quite a while. Randy speaks to chambers of commerce and other groups about marketing. "They talk to me afterward," he says. "They're intimidated by the ad agencies. They don't know the process. They assume it's really expensive, and they don't know what they're going to get."

With Ad Diner, on the other hand, business customers can see what they're getting before they buy. Ad Diner offers a menu of already created, ready-to-use ads that can be customized with a particular business's logo and information. The same ad can be sold to different businesses in different markets, spreading out the costs. Business owners pick the ads they want upfront, and know they'll get the finished ad back in a few days. Moreover, they can reuse the ad as many times as they like during the year.

"In the ad world, the agencies typically sell good, fast or cheap--pick any two," Randy says. "At Ad Diner, you get all three. That's what's unique about us. You get good advertising at a low price from creative resources, and fast service."

Ad Diner is also partnering with a media company that can buy local media for clients who want assistance.

The ads come from multiple sources: award-winning ad agencies, production companies and creative freelancers throughout the U.S. and Canada. "We don't care where it comes from," Randy says, noting that some small businesses create their own ads or purchase the rights to the ad when it's created. As long as you own the copyright, you can submit an ad to the site. Ad Diner pays a royalty every time your ad is sold.

The agencies that submit the ads set the price, but the Gunthers have told them they want the prices discounted. "We're telling them we'd like to see it about 70 percent to 90 percent off what they normally charge," he says. "That means if you see a $1,000 ad on the Ad Diner, it would probably cost $10,000 when all is said and done if you go hire a typical, medium-size ad agency."

Ad Diner "gives small businesses an opportunity to get good, creative advertising that they can afford," Cindy says. At the same time, she adds, "It's an opportunity to help advertising agencies create another revenue stream." That's important, she says, "because right now a lot of businesses with this economy are cutting their marketing budgets, so it's affecting the ad agency industry."

Incidentally, the Gunters advise against cutting marketing and advertising during a recession. "Advertising is selling, Randy says. "Nothing happens in a business until a sale is made. Unless," he adds facetiously, "you have a business that doesn't have to sell anything; then you don't need advertising."

Ad Diner will customize the ads as desired--that includes changing the copy or listing a special offer.

The website is still in its grand opening phase, with the Gunters getting new creative content nearly every day. As they start to get the word out to small business, they'll also be doing direct marketing to targeted industries "where we feel we have enough to offer right now." The first targets are jewelry stores and probably attorneys, he says.

Ad Diner is already gaining buzz: It was among the 26 semi-finalists in the Wisconsin Governor's Business Plan Contest, and it received second-place honors in Dotster's Next Big Small Business Contest.

As for the Gunthers, they're so confident they have a winner on their hands that they're aiming to phase out the Gunther Agency. "We haven't been going out and getting new business," Randy says. "We've been servicing the clients we have, but we're not actively pursuing new clients."

Nonprofit Entrepreneur Fights Modern Slavery

Eve Gumpel — Wed, 11 Nov 2009 09:28:07

Sarah Symon was a musician, writing and placing songs on TV and in films in 2002, when fate intervened.

A song she wrote was in a film, Nola, at the Tribeca Film Festival, so naturally, she went to the festival. She also--unwillingly--saw The Day My God Died, a film about human trafficking. Symon says it was the only film showing in the time frame she had available. So she watched what she thought would be a depressing film--and it profoundly changed her life.

While the movie was distressing, "it was also incredibly hopeful and inspiring because the survivors had created this underground railroad," Symon says, "and they were having the courage to go back into these brothels and into rug factories and other places to rescue other children from this experience."

Symon decided at that moment to change her life and dedicate it to helping end modern slavery. She began by volunteering with Friends of Maiti Nepal, the U.S. branch of an anti-trafficking organization featured in the film. Then she visited a Maiti Nepal shelter in Kathmandu, and her life changed even more dramatically.

She learned how difficult it was for the rescued women to reintegrate into society. Many live in the shelters for years, unable to secure employment. The shelter itself provided the answer when Symon discovered a treasure trove of purses and beaded jewelry made by the residents as part of their therapy. There was no market for the items in Nepal, but Symon was confident she could sell them in the U.S.

Symon took $300 worth of goods home, sold them to women she knew, and then set up TEN Charities, a nonprofit that operates the business aspects of its program through The Emancipation Network Inc. The handcrafted items are sold at home parties under the Made by Survivors brand. TEN has also expanded to projects beyond handicrafts. It's building a biodiesel plant in Boisar, India, to teach renewable energy management to survivors

Today, TEN works with 10 core groups in eight countries: Nepal, India, Cambodia, Thailand, Uganda, Ukraine, the U.S. and Bangladesh. The organization's holistic support includes job training; educational sponsorships for children, teens and adults; and funds for emergency needs, rescue and aftercare.

The handicrafts have also expanded beyond the shelters. TEN has created a production center in Calcutta, India, where survivors work. Two staff members--one Indian, one American--manage the process. Symon plans to set up more such reintegration centers throughout Asia in 2010.

Made by Survivors products are typically sold through home parties. Some people do it as a one-time event for friends. TEN also offers "ambassadors" an opportunity to run their own business. "It's the perfect thing for a certain kind of woman," Symon says. "But you have to be very entrepreneurial." The program was inaugurated three months ago, but it's garnering a tremendous amount of interest from women who "want to be doing something that not only feeds their family but helps another woman feed her family," Symon says.

Symon began the business in 2005. In 2006, husband John Berger left his career in investment banking to join her. They initially invested their own money in the nonprofit. But they've since obtained a grant from Humanity United that pays their salaries and that of their three employees, including the pair in India.

Symon admits that the road hasn't been easy. She had no experience importing or running a retail operation. She also admits to a long learning curve when it came to figuring out customs and shipping. Symon says she also lost a lot of money because she ignored advice from more experienced people suggesting how much she needed to mark up her products.

But it's the organization's messaging that's been one of the hardest elements to master. "When you go on our website, you don't see a lot of horror stories, because we've found that to be counterproductive," she says.

She's learned that she can't motivate by horrifying potential clients. "That was a huge learning curve," she says, "in trying to figure out what is the info that you share that gets people on board and helping and becoming involved, rather than so horrified and distressed that they go home and block it out of their mind."

Messaging is still a work in progress, she says. "We're doing some research around that with a team from Harvard to try to learn more about what motivates people to take action around fair trade products and vulnerable populations."

After surviving all the growing pains, Symon says she feels the burden of the business more heavily now that she knows the survivors so much better. "You want to make sure that your efforts and the money you spend and the time you spend are really being the absolute most effective use of time and money toward ending slavery and helping survivors," she says. But while the responsibility is a burden, there are also the joy and satisfaction of seeing lives transformed.

"I've seen it not because of what I did but because of what they did. I just helped it along and gave them an opportunity, and they did the work. They appreciate it and pay it forward in their communities in helping other girls and raising safe, slavery-free children."

And what about her music? Symon freely admits that she misses it. For the moment, however, "Between raising two kids and trying to end modern slavery, I pretty much have my hands full."

FailCon: Entrepreneurs Explain Where They Went Wrong

Eve Gumpel — Tue, 03 Nov 2009 22:00:00

"You aren't a real entrepreneur until you've had to deal with failure," says the website describing FailCon. It goes on to characterize FailCon as "the first conference ever to ask successful founders, investors, designers and developers 'What's gone wrong and how did you fix it?' "

FailCon drew well over 300 attendees to the Kabuki Hotel in San Francisco on Oct. 27 to hear entrepreneurs and venture capitalists talk about their failed companies. Among them was PayPal co-founder Max Levchin--now CEO of Slide, a Facebook app maker--who talked about his first four failed companies. Mark Pinkus, who runs the popular social gaming site Zynga, described his troubles with Tribe.net. The failed site was one of the web's original social networks. Sixteen startups offered website demonstrations, and attendees picked the two they thought "least likely to fail."

Winners of the FailCon Success Contest were FidoFactor.com, a sort of Yelp! for the dog community, and YourVersion.com, a site that finds new web content based on your interests, and lets you bookmark and share that content with friends.

Attendees included everyone from entrepreneurs to MBA students, venture capitalists, angel investors and C-level executives.

The event was arranged by Cassie Phillipps, an event coordinator, and Diane Loviglio, herself a startup entrepreneur. Loviglio is currently beta testing Wattbot.com, a site designed to match interested consumers with clean-energy providers. Aready, Phillipps and Loviglio are making plans for FailCon 2010. For example, they'd like to have roundtables over lunch, where an experienced entrepreneur could mentor other attendees at the table. "You'd get fed lunch and get to ask and brainstorm and go around the table and have a really intimate conversation. You could really learn from each other," Phillipps says.

"This is a topic that almost everyone's wanted to talk about and wanted an excuse to talk about and didn't feel like they were supposed to," Phillipps says. "A lot of investors I've talked to say, 'We won't trust you until we've seen how you handle a failure.' I hope this conference helped people learn this is something not to shy away from," she concludes.

Despite her experience coordinating conferences, Phillipps doesn't consider herself an entrepreneur. Real entrepreneurs, she says, want to change the world. As she told the audience at the conference: "I'm not trying to change the world with what I'm doing: I'm trying to help you change the world."

That's what FailCon was all about. After arranging last year's SNAP Summit, Phillipps felt there was something missing. She describes it as "just blasÃ©. Nothing went wrong, but nothing stood out as impressive." The wow factor was missing, she says.

Loviglio, who'd been attending events in order to get to know people and learn more about being a first-time entrepreneur, had a similar reaction to the many conventions she was attending. "They're all 'AwesomeCon,' " she says, with speakers who try to exude coolness. She wanted to hear from the opposite perspective.

Thus the idea of FailCon was born. Phillipps and Loviglio began working on the project in May. Their goal was not simply to offer a dozen stories of failure, but to create a structure for the day by offering the key points in developing a company where entrepreneurs can take a misstep. It started with early team development, moved on to product design and then investment capital. The day ended with a talk on "The Future of Failure."

Phillipps' closing remarks presented a challenge to the entrepreneurs attending: "How many of you are going to walk away from this and stop doing what you're doing--knowing that nine out of 10 of you will leave this room losing everything? Knowing all the areas in a company where you can fail?" she asked.They laughed, says Phillipps, but no one raised a hand.

"That's so what wonderful about this industry," Phillipps says. "There's this spirit--whether it's being stubborn or tenacious--we stick it out."

She hopes attendees walked away with this lesson: "We can't be afraid of failure; let's just embrace it and support each other through it."

FailCon lessons learned:

You need to go through several iterations before you settle on your company design. "People are usually happy with the third or fourth iteration, but you have to go through all six," Loviglio says. On the other hand, "you can't iterate forever." At some point, you have to launch.
"If you want to get VC funding, you need to get out there and start pitching the idea before the product's finished," Loviglio says. "You need to make sure you get out there before all the VCs have that slot filled in their playbook."
On the other hand, says Phillipps, you don't want to be the first, either. If you're too far in front of the field, no one will understand what you're proposing. That might be why Tribe.net didn't make it. "If Pincus had come one step after Myspace and one step before Facebook, he could have been Facebook," Phillipps says.

'Branding Like the Big Boys'

Eve Gumpel — Tue, 27 Oct 2009 10:09:50

Branding is everybody's business these days. Everywhere you look, there's a book or a business owner promising to build your brand, reinvent your brand or add buzz to your brand. It's clear that any business bound for success has to understand branding and all that branding entails in today's world. That's why I'm turning my blog over to branding expert Lynn Parker today. She's recommending a branding book she says will help you outdo your competition, "Branding Like the Big Boys." Here's what she has to say about it:

Martin Thoma's new book--Branding Like the Big Boys--performs a neat trick: It's both sophisticated and simple. It's sophisticated in how it knows that branding is about walking your talk; it's simple in how it spells out how every organization--including the smallest businesses--can understand and apply branding principles.

In 157 breezy pages, Thoma covers Why Brand? What is Branding? How to Define Your Brand Promise, Naming, Logos, Taglines, Advertising, PR, Web, Measurement and Brand Leadership. Although that may seem like a lot of topics to fit into a small package, there is actionable insight on every page.

One of the most valuable parts of the book is the section Why Bother with Branding? In it, Thoma clearly identifies the commodity trap most small businesses fall into, and how branding can help you out of that trap. Says Thoma: "America's small businesses tend to lack personality . . . What single woman or man, dressing for a night out, would fail to bathe, would choose a drab, uncoordinated outfit and put on worn-out shoes? . . . People have an innate drive to express themselves; businesses don't. People know they have to put on and put out to attract dates or mates--their 'customers.' Businesses tend to think that if they create a product or service and just show up at the dance, they've done all they need."

And the antidote to commoditization? The discipline of defining and articulating your absolute uniqueness.

Branding Like the Big Boys is a must-read for any organization looking for that edge over the competition and a way out of price-driven marketing.

Thanks for the insight, Lynn!

Help! We're Running Out of Water

Eve Gumpel — Wed, 21 Oct 2009 09:57:06

Looking for a new business trend?

Look no further than the water industry and water conservation, Susan J. Marks suggests.

Marks has just written the book Aqua Shock: The Water Crisis in America, and she's brimming with alarming facts and figures about the straits we're in and the solutions we're going to need so we don't run out of the precious liquid. "We use 408 billion gallons every day in the United States," she says. "Each of us uses 80 to 100 gallons for personal use each day. That's 152 tons of water per person per year."

Yes, the Earth is 70 percent water. But only 1 percent is the fresh water mankind needs to survive. "It's the new oil," she says. "There's a growing demand and a limited supply. But unlike oil, there's no alternative."

At least 36 states across the country expects water shortages of some kind by 2013, reports Marks, and 46 states are expected to be living under drought conditions by that time.

Shortages are caused by a variety of factors:

Climate change
Drought
Population shifts to arid climates
Overuse
Worn-out sewer systems that leach precious freshwater supplies out of aquifers and carry it away as wastewater
Outdated water-treatment plants that can't handle 21st century poisons
Natural and man-made pollution
Uncounted miles of pavement that keep water from soaking back into the ground to replenish our supplies.

"It's unfathomable that it can't be the great job generator," she adds. "Just factor in the 700,000 miles of pipe that have to be replaced underground.

"We often forget just how much water we use in this country. It's used for cooling, drilling and even creating electricity," Marks says. As she writes in Aqua Shock, "The United States has tapped into, sucked up and maxed out its once-abundant and replenishable supplies of freshwater on the surface and underground."

"Our infrastructure is crumbling," Marks says. "Try Googling 'water main break.' There are still pipes made out of brick and mortar. In Washington, there are pipes made out of wood. The big problem is not that they leak water," she says. "Instead, they pull fresh water out of the ground into the sewer system.

"Repairing infrastructure, saving water, using rain barrels to water your garden. All of this is ripe for entrepreneurship," Marks says.

New technologies are already coming into play. They include:

Liners for pipes that are less expensive than complete pipe replacement
Green roofs that absorb rainwater
Pervious pavement, which allows rainwater to seep into the ground, rather than run off to the ocean.
Dual-flush toilets that flush more or less water, depending on the amount of waste.
Water-recycling pumps that send cold water from the hot water tap back to the hot water heater until the water heats up, rather than send the water down the drain.

And, of course, there are plenty of opportunities for lawyers, as cities, states and individuals square off in court over water rights and water use.

In Aqua Shock, Marks quotes Mike Hightower of Sandia National Laboratories: "Our efficiencies and new sources of water won't be from new rivers, new aquifers or any new freshwater sources. Instead, they will be from better management, better coordination, more efficient use of the water we already have, and additional use of nontraditional or alternative water resources like reusing wastewater or desalination."

Adds Marks, "What we need are innovation, technology and ingenuity to come up with new ideas."

Trade in Your 'Clunker' of an Ad

Eve Gumpel — Mon, 12 Oct 2009 22:00:00

The government's Cash for Clunkers program has prompted a spate of copycat offerings from retailers and manufacturers.

Customers can trade in used furnishings at Ruby & Quiri in Johnstown, N.Y., or Pacific Manufacturing in Phoenix. There's Credit for Clunkers at 1-800-Mattress, Cash for Couches at Lillian August in Connecticut, and what some retailers are calling Cash for Teakettles, which Chantal Cookware Corp. will introduce next month.

Even Leibler-Bronfman Lubalin Advertising in New York City has its own tongue-in-cheek version of the campaign. Called Cash for Creative Clunkers, it encourages companies and retailers to trade in their ad "lemons" for a new ad campaign at 50 percent off the normal sticker price for creative services.

The offer is a departure for the agency, which specializes in luxury brands and high-end retail accounts. One of the agency's staffers came up with the idea at a daily brainstorming session. "Everyone's complaining that they're concerned about spending money on advertising. And we see all those surveys that say that you need to be out there front and center," says Beth Bronfman, founder of LBL Advertising. "We thought it would be kind of cool if we could help people advertise." That's when one young art director said, "Why don't we do something like Cash for Clunkers for clients?"

Bronfman, not surprisingly, is a strong advocate for continuing to advertise during the recession. "If you're not out there advertising, the consumer doesn't think you're a viable brand," Bronfman says. Even worse, "Retailers may not buy your product because you're not driving business to their stores."

The campaign is also a departure for LBL Advertising because, like the shoemaker whose kids have no shoes, the agency typically doesn't advertise its own services. Bronfman says it's not so much a bid for business as a way to get the company's name "out there" in a fun way. And it's been working. "It's gotten a tremendous amount of exposure; there's a lot of buzz in the ad community." She's been interviewed on radio and various ad publications are picking up the story.

Says Bronfman, "This just shows people that, 'Wow--this is a clever idea. So if an agency can think of something like this, think of what they can do for me.'"

So what does Bronfman consider a clunker of an ad?

"A lot of people run ads that if the logo falls off the page, you've no idea whose ad it is. Everything we do, nothing looks the same because it's all what looks right for that client. We give each brand an image.

"What we're saying with Cash for Creative Clunkers is, if you're running ads and you're not getting a response, you should call us--it's a clunker. It's not working."

Bronfman's advice for would-be advertisers: "Be honest. If a consumer buys a product and it's not what they expect, you lose them. Be who you are. Really have an honesty about how you communicate what the product benefits are. You've got to be who you say."

Bronfman has weathered more than one downturn in 24 years of business. Her secrets of success include:

A lean, mean operation. In addition to her 12-person staff, Bronfman has a host of strategic alliances. If a client needs PR, a TV commercial or is planning an event, LBL has contacts to provide those services seamlessly--without having to maintain all those services in-house.
Being there for clients--and being nice. "We have really positioned ourselves to be a benefit for clients in good and bad times," she says. "You have to be with them and working with them all the time on growing their business. You have to be very resourceful and resilient and nice.
Be a cheerleader. "I always tell everybody, don't get frustrated. It's so unproductive to be down and dismayed, because you're wasting time. As entrepreneurs we have to be positive and look for ways to make things happen. You can't give up."
Join a women's organization. Bronfman serves on the board of the Women Presidents' Organization. "WPO is so phenomenal because it acts like a board of directors. I think it's really helped in my growth."

Give More Than You Receive

Eve Gumpel — Mon, 05 Oct 2009 22:00:00

Try not to become a man of success. Rather, become a man of value. A successful man takes out of life more than he puts in. A man of value will give more than he receives.
--Albert Einstein

That quote is the key tenet of Orville and Heidi Thompson's business, Scentsy, a company that sells wickless candles online and through Scentsy consultants nationwide.

It's also the central theme behind the Meridian, Idaho-based company's decision to give away $100,000 to 40 local businesses last July, to celebrate the company's fifth anniversary. The couple settled on $100,000 because it was matched their first-year sales.

Scentsy gave $50 apiece to approximately 1,000 employees, family members and vendors to spend in selected stores. It was quite an undertaking. Getting $100,000 worth of $50 bills from the bank took a couple of days, Orville says. Teams of 50 people went to 20 stores at a time, and then to a second set of 20 stores.

"We made them spend it all," Heidi says. "They bought gift certificates with the leftover money. They also spent $10,000 of their own money above and beyond what we gave them," she says.

Now the Thompsons have stepped up their efforts a notch. The original concept was limited to internal company employees (numbering about 300), vendors and family members. But there was such a flood of interest from Scentsy consultants across the country, the Thompsons created Contribute 2009. The campaign, with its separate website and special logo, calls on company consultants and the general public to pledge to spend $50 at a local small business on or around Oct. 12. The Thompsons' goal is 100,000 people spending $50 each, for a total of $5 million.

But the Thompsons' vision isn't intended simply to send individuals on a small buying spree. Anyone can go into a shoe store and spend $50 on a pair of running shoes, Orville says. Consultants in particular are being encouraged to combine their efforts to increase the event's impact. They are encouraging consultants to work with the public, friends, family and neighbors "and all do something meaningful together."

"If I put on a T-shirt [that says Contribute 2009] and 20 of my friends [do it, too] and we all go in and buy $50 worth of shoes at the same time, we give hope and inspiration--and publicity--to that store owner for the same pair of shoes. We've contributed more because we did it in a slightly different way than we otherwise would."

That's what happened in July. Shu's Idaho Running Co. in Boise, Idaho, was quoted in a story by Reuters. "So here's a tiny little shoe company that caters to runners in the north end of town that has national exposure," Orville says. Some owners were in tears. Others said they didn't think they would have survived the summer without Scentsy's help.

The event sent people to stores they had never frequented, including the Thompsons. The family bought a picture at a framing store and bird houses and a hummingbird feeder at another shop. "These were two stores I had never been in before," says Orville, adding that he's planning to go back to buy another bird feeder. "So now they've got a customer for life."

Orville acknowledges that publicity surrounding the campaign benefits Scentsy. "But that's not the point," he says. "The point is to contribute. We needed to use Scentsy's reach to make an impact." He says Scentsy created the separate Contribute 2009 website "to de-link it from our marketing efforts."

"We started in extremely humble circumstances and it was lonely and dark many times," Orville recalls. "But as we've emerged from that, the burden that gets lifted. It's nice to feel light. We hope Scentsy can be a light for hundreds of thousands if not millions of people." Adds Heidi, "That's what we want to spread."

A Rescue Plan That Saves Industry--and Jobs

Eve Gumpel — Mon, 28 Sep 2009 22:00:00

Don't read this post if you want to believe the government's assurances that the economy's turning around and all will soon be right with the world.

Lynn Tilton, CEO of private-equity fund Patriarch Partners, is here to tell you that things aren't nearly as rosy as Washington would like us to think. The problem is banks' failure to lend money to small and midsize businesses. "We're losing industry in this country every day--which means we're losing jobs--because they have no access to capital," she says. And that means permanent job losses for the men and women who were employed by those companies.

Concerned that American industry is in dire straits, Tilton created SMERescueLoans.com, dedicated to saving jobs in America by making loans to small and midsize enterprises. The Rescue Loans program is designed to take advantage of TARP funding intended for the Public Private Investment Partnership, in combination with private investment. That way, if there's a loss, the private investors will absorb it first, reducing taxpayer risk. Tilton says more than $100 billion in PPIP funds aren't being used. She hopes to use $30 billion of that total.

SME Rescue Loans extends the reach of Patriarch Partners. "What we do for a living here is, we try to save companies that other people would toss away, and we try to save jobs in America," Tilton says. "We've always done that since we started the business. It was always about proving that making money and making the world a better place were not mutually exclusive options."

But Tilton says her company can't solve the crisis on its own. That's why she created RescueLoans. It's also why she--a woman who usually stays under the radar--is speaking out in public about the problem: "I can't do this alone. I'm speaking out because I need help. I need other people to see it. I need other people to care.

"If people begin to support this and say, 'hey, we have a problem and we need a solution,' that's when Washington will respond,"she says.

Meanwhile, Tilton's been talking to senators and members of Congress in Washington and taking meetings with representatives from the Treasury Department to jumpstart RescueLoans. "We're really trying to get Washington to jump on the bandwagon. We'd like Treasury to take [the RescueLoans program] and set it up and try to get private investors that they will help finance and leverage to move forward."

Tilton has seen up-close the effects the economy is having on middle America. Her company has investments in 73 companies, many of them manufacturers. "I spend a lot of time out with my people," she says. "People are suffering. Outside [of Washington] in middle America, you're finding unemployment rates well above 20 percent."

According to Tilton, the kind of loans industry used to have--basic capital loans that allowed companies to finance the timing between buying materials and getting paid for the product they make--aren't available right now. And without everyday working capital loans, "These companies have no chance for existence," Tilton says.

Tilton's even looking into acquiring financial institutions to bring relationship lending back to American business.

Industry is where the largest number of losses are occurring, Tilton says. "Unless we've made the decision that we don't need to be the maker of things ... then we're making a huge mistake. Not to mention that if we've decided that we don't need to be the maker of things, we've made even a bigger mistake. Because every great empire has been built upon the manufacturing economy. And the fall of every great empire has been the failure to remember that fundamental fact."

Tilton points out the irony of government funding: "We can go to Washington and get money from the IFC [International Finance Corp.] or OPEC to go build manufacturing facilities on the other side of the world to create a developing economy and put people to work so they can make money and provide for their families with dignity," she says. "But you couldn't get money from the government to save companies and provide jobs for Americans."

Tilton says America can't sit around waiting for banks to begin lending again. "It's too late. Most of these companies are already in deep distress by not having had access to capital, and everybody's lost revenue. So if you've had no access to capital, chances are you're not going to survive.

"What people don't realize is, a lot of these jobs have been lost forever. Day after day our industry in America is liquidating. And so there's no place to hire back."

It's Never Too Early to Learn About Back Care

Eve Gumpel — Mon, 21 Sep 2009 22:00:00

Like many mom entrepreneurs, Lisa Habermehl came up with a business idea when she realized her daughter had a need that wasn't being addressed.

But Habermehl's entrepreneurial effort isn't a product in the usual sense. Instead, it's information about back care, produced in a format children can understand. Her website is IPositionMe.com.

Habermehl notes that children learn about calling 911 in an emergency. They're taught dental hygiene. They're told about staying at a healthy weight and eating well. But no one mentions preventive measures for the back.

The idea started as a volunteer project, when her daughter came home from kindergarten complaining that her back hurt. About the same time, the school notified parents that they were expected to do 10 hours of volunteer work at the school. Habermehl--a kinesiologist who suffers from back pain herself--decided to focus on back care for kids.

"It started off with just putting some rhymes and friendly characters pulled out of the air to help the kids learn some things," she says. She created Backasorus Rek--"I thought I could reach the boys with that"--and Dottie Goodback for the girls.

Her first presentation was for the after-school program, which included kids from kindergarten through middle school, so she added some crossword puzzles for the older kids.

She got such a great reception that she decided to expand on it. "And before you know it, I have a 20-page booklet here," Habermehl says. She placed a cold call to orthopedic surgeon Stephane Lavoie, who applauded her efforts and agreed to write a quote for the back cover of the "backtivity book," titled I Position Me: Back Care for the Growing Spine.

HTML clipboardShe created I Position Me LLC, registered the company with the state and copyrighted all the materials and characters in her book.

Her resolve to create a business hardened after her own back problems began to worsen. "That fueled me even more to get to the doctors and the pediatricians because there is nothing done for back pain prevention or any education on it. It's an area that's not even discussed at all," she says.

Habermehl is convinced that early education could prevent or at least minimize the back pain so many adults encounter as they get older.

Still, Habermehl recalls that it took the combined efforts of parents, caregivers, teachers and physicians talking about the 911 emergency response telephone number to get the message across. Her business is still in its initial stages. She knows it will take patience and persistence, but she hopes to galvanize schools, physicians and even the business community behind her efforts.

The Florida Department of Education has included her book in its health program's lending library and--because children learn to read through rhyme--the "Just Read, Florida" program. The Florida chapter of the American Academy of Pediatricians is considering her materials.

She's even approached businesses, figuring they might want to invest in training the youngsters who will become their future employees.

Habermehl is determined to succeed. "There's hope there," she says. An orthopedic surgeon in Arkansas plans to order the books for a children's group he works with. In addition, a preschool in Atlanta wants to incorporate the program into the curriculum, she says.

"Respecting what the spine does and its function for the body as a whole, that's all I want to do," Habermehl says. "I'm glad I've done it for a few kids already. If I can get what I've put into it back and make money out of it, that's icing on the cake. That's not what I got into it for."

Proper back care is simply the sensible thing to do, Habermehl believes. "We teach kids really young about dental flossing and brushing. It's the same thing; we just can't see the spine. It seems common sense it should be part of the basics of growing up."

Buy Your Future Now

Eve Gumpel — Mon, 14 Sep 2009 22:00:00

It's a good time to buy a business--but only if the business you're buying is profitable, even in these recessionary times.

So says Ted Leverette, president of Partner On-Call Network LLC, a franchise that helps buyers purchase small and midsize businesses that owners quietly put up for sale.

Leverette advises against buying a mediocre business at a bargain price with the intent of fixing whatever's wrong with it and making a killing. "The only businesses worthwhile are the ones that have been profitable--and I say for a minimum of five years, including right up till now." About 20 percent of businesses fit that description, Leverette says.

Leverette lists three reasons a profitable business would be on the block right now: the owner is dead, dying or disabled; in debt; or has to sell the business because of a divorce.

Leverette acknowledges that many buyers are willing to settle for mediocre businesses or even losers. "They think they're buying cheap and therefore they'll make a better return once they fix the business." But even turnaround experts have an 85 percent failure rate, Leverette says, adding, "If the pros fail 85 percent of the time, good luck to the typical person."

The best buyers are people who've worked in a career for 10, 20 or even 30 years and want to buy a business that fits right into their resume. They know the players and the customers; they understand the culture.

"They understand the field and, once they get in, they're back in their environment," he says.

Buyers also benefit from the fact that sellers typically stay around and train the buyer for a period from three months to a year. "The seller has a big incentive since that seller is financing part of the deal," Leverette says. "You've got an owner willing to tell you everything necessary, because that's how he gets paid the rest of the purchase price."

Even better than an industry insider, says Leverette, is a small or midsize business that opts to purchase a competitor. "That's where the opportunity is today," Leverette says. "Banks as well as investors will pony up money when a business is buying another business in its industry." When two businesses combine, he explains, they can reduce duplication of overhead, purchase goods at lower prices, hire and keep better employees and sell to larger customers.

"We say to small midsized businesses, 'If you've been doing well, especially in this economy, now's a good time to feast. Go pick off at least one competitor.' Banks and investors like this. It's not some former employee looking to buy a job. It's another business in motion that's already profitable, so the probability of the transition going smoothly and there being a bigger, more profitable company is much higher."

Typically, small and midsize businesses sell for two to five times their annual adjusted net cash flow, Leverette says. That's the business profit plus the owner's salary.

If you do plan to buy a business, you'll have to have some cash on hand. Leverette says you need enough to make a down payment of no less than a third of the purchase price. According to Leverette, tax law allows people to take money out of their 401(k) tax-free to purchase a small or midsize business.

Financing options are limited for business buyers in 2009, Leverette says. Today, banks expect sellers to finance up to 50 percent of the purchase price. In the past, sellers might finance up to a third of the purchase price or--if it was a really great business--the buyer would make a down payment and the bank would pick up the rest.

Leverette also notes that the price of a business goes up--typically about a third--if the seller is going to finance. On the other hand, he points out, sellers of mediocre businesses are reluctant to provide financing. "The seller is thinking, 'If the business I'm running is already in trouble and I can't fix it--now I'm going to hand it to some stranger. And if he can't fix it, I don't get paid and I don't have a business.'

"In real estate if somebody doesn't pay, there's something to get back," Leverette says. "In business, it's not like a piece of real estate. There's nothing to repossess."

Another type of financing is called an "earn out." In an earn out, the seller negotiates for a share of any increase in profit after the buyer purchases the business. If the profit doesn't materialize, the seller doesn't get the contingent payment.

Who should buy a business? There are three criteria, says Leverette:

You know how to manage employees.
You can make a down payment of about a third of the purchase price.
You're either unemployed or underemployed--that is, you won't be able to accumulate enough money to retire.

Among those who qualify are unemployed executives, Leverette says. "What if you used to be a $150,000 executive and you're unemployed? You're not going to get a $150,000 job in the next year. That person can go buy a business," Leverette suggests.

If you do plan to buy a business, don't waste time--seal the deal as quickly as possible. "This is the best lesson I've learned in my business career making deals: If a buyer finds a business worth buying, do not [mess] around with the seller negotiating nitpicky items that really aren't significant, and don't think the seller is going to have unlimited patience," Leverette says. "Move as fast as you can with reasonable advice from expert advisors."

Otherwise, Leverette says, another buyer will swoop in while you're dragging your feet.

He offers the same advice to sellers who put off a sale, thinking they'll get a better price down the line. "Don't [mess] around thinking, 'what better deal might exist?' Sell to the right buyer or buy the right business, and move on."