In these trying economic times what can I do?

We are currently undergoing some major change to our economic system, with bailouts of finance, insurance and Wall Street businesses the talk of the day. We speak daily of recession, yet the economists have yet to declare one, and the economy has yet to report negative growth. With this financial crisis, why should you care and what can you do about it?

I have been speaking daily with small businesses about their concerns, and have done some research to address some of these concerns. I have spoken with small business lenders and the District Director of the U.S. Small Business Administration, who assure me that credit is available for small businesses. Granted, right now the lending standards will be tougher than ever, but, the fact remains that borrowing for projects that make economic sense for small businesses with good equity and risk are still being done.

Rhonda Abrams, a Nationally recognized small business advocate and trainer, has authored a piece entitled "Bailout, Small Business and You" which is included in this e-newsletter below. She has some great advice, as always, for small businesses.

Finally, remaining calm and not making hasty decisions seems to be the best advice out there. At this stage there is not much to be done about that 401.K plan that has lost value. In doing an assessment of your situation, make decisions based on facts, not emotions. One of your best bets may just be to focus on your customers, providing the product or service that they need and want, and wait out the pending storm.

If you're like me, you watch the daily financial news with trepidation. With so much at stake, I'm devoting this issue to the economic crisis: What does it mean for you? What about small businesses as a whole? What should YOU do NOW to protect your company?

Remember those mailings from credit card companies pleading with you to take their low- interest, "don't pay til next August" offers? Your banker asking if you'd like to increase your line-of-credit? The vendor who's willing to extend a bit more time on your outstanding balance? Expect all of that to change. Even if you have good credit, it's going to get tougher to get money-and you'll pay higher interest rates. Some of your best customers-including huge corporations-are going to have tougher times getting credit, too. Expect many of them to cut back on their purchasing-or even go bankrupt. Consumers are going to be scared, and they'll cut back too. All that can mean lower sales for you and your business.

What should you do to protect your small company:

A. Talk to your lenders and vendors. If you run a healthy business, and have good relations with your lenders and vendors, make sure they know you're doing just fine. People who extend you credit are under pressure-they're going to start calling in loans and lowering credit lines. You want to make sure you have good relations with them, so yours is one of the businesses they leave alone.

B. Move your money. If you have more than the FDIC insurance amount (currently more than $100,000, although there's bi-partisan proposal to increase the FDIC insurance to $250,000) in any one bank, it's time to move it. Remember, that's between ALL accounts, personal and business accounts (if your business is not a separate corporation). Even if your business is a separate corporation, you might feel more comfortable if you spread your money to a few different-FDIC insured-banks.

C. If you know you'll need money, get it now. Loans- especially home equity loans and lines of credit-are likely to become harder to qualify for. If you absolutely need the money, get it now. But be sure to read the fine print-they may be able to increase interest rates or even "call" the loan (require you to pay it back immediately).

D. Get out there and make sales. The best way to finance your business is to increase your income. Although many customers will be more careful, they're not going to stop buying altogether-they might as well be buying from you.

E. Look for customers who can pay you NOW. There's going to be a rash of bankruptcies-primarily large corporations. If they go bankrupt, you can basically kiss the money they owe you goodbye. So be careful about giving credit to big corporations, and if you have large companies that owe you money, collect.

F. Save. If you've got extra money-or as you make money-put some away. You'll always sleep better with money saved. (I was going to say, "You'll sleep better with money in the bank," but that now depends on which bank, right?) So spend your money carefully. So don't cancel exhibiting at the trade show, but stay at a less expensive hotel and eat at cheaper restaurants.

G. Stay hopeful. I know it's hard to do. But entrepreneurs know how to roll with the punches and bounce back. I know you will ride out this storm too!

The Upside of Recession? September 12, 2008 - Kimberly Palmer

Trend-spotter Faith Popcorn says all the financial pressure consumers are facing during this down economy is driving many of us to wilder behavior. One in five adult Americans report drinking more, 17 percent say they are smoking more, and 19 percent report increased sexual activity. Popcorn, chief executive of her eponymous consultancy, says, "In the face of adversity, many people, especially young adults, propose to 'cut loose,' have some fun and worry about the consequences, financial or otherwise, later." For those following that trend, an economic recovery might be something of a letdown.

Unemployment Rate Is Political, but Not Necessarily Recessionary September 05, 2008 - Liz Wolgemuth

The percentage of Americans who are out of work and looking for jobs hit a much higher than expected 6.1 percent in August, up 0.4 percentage points from July, the Bureau of Labor Statistics reported today. This is nearly a five-year high-the last time unemployment was at 6.1 percent was September 2003. Then, a couple of years into an economic recovery, a New York Times editorial began: "Unemployment in America is high, and elections are on the horizon." Sound familiar? Today, elections are more like at the next stoplight, but unemployment has clambered up and is again a ballot-box issue.The politics: From Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission: Hidden unemployment and wages lagging inflation make the economy the most important issue dogging Republican presidential nominee John McCain. Quite simply, ordinary Americans have not benefited from the strong GDP growth accomplished in recent years, and this gives Democratic candidate Barack Obama's proposals to redistribute income a lot of traction. These will not much help ordinary workers two years from now, but, in the heat of a campaign, populist policies and promises enjoy strong appeal. Daniel Clifton, head of policy research for New York- based Strategas Research Partners, also said the jobs report "hurts McCain," according to Bloomberg. The details: The U.S. economy has lost 605,000 nonfarm jobs since the start of the year. Jobs in auto- related manufacturing have decreased by 128,000 over the past 12 months. Last month, while jobs were added in computer and electronic products manufacturing, home-building-related jobs in furniture and wood products manufacturing dropped by 7,000. Employment services lost 53,000 jobs last month. Healthcare and mining jobs were added.

A conference for Forestry Entrepreneurs? That's right...and this November marks the third year in a row that this conference will be offered for forestry businesses in Arizona and New Mexico. This annual event brings together small businesses from throughout the region to network and hear from industry experts.

This years conference features presentations from Nationally recognized experts like Bob Rummer of the US Forest Service Research Lab in Auburn, Alabama, who will be presenting information on the latest harvesting technology and techniques. Dr. Lloyd Irland, Economist with Yale University School of Forestry is presenting Value Added Marketing techniques, and will do a half day school for businesses to develop a short Strategic Plan for their own products, called "Streetwise Marketing".

This conference is capped off by tours of forestry businesses, and this year there are two separate tours; the first showing local Flagstaff area businesses and projects, and the second featuring a tour of the new Renegy Co-Gen Electrical Generating Plant and harvesting on Pinon-Juniper fuel for the facility.