Interest Free? No Thanks

President Barack Obama's proposal to increase small-business lending is "an interesting idea" but does not take into account signs that small businesses do not want to increase their debt, Catherine Rampell writes. "Just increasing the supply of credit available to businesses won't be enough to jump start lending. Businesses have to want that credit, too," Rampell writes.

Having recently completed a series of focus groups with small business owners, I can attest that this is very true. Most businesses are looking for payback in 18 months or less and do not want any long term debt obligations regardless of the attractiveness of the offer.

The Enthusiastic Business Owner

USA TODAY is launching a six-month series that will follow the progress of several entrepreneurs who are starting new businesses. Experts say the entrepreneurs behind the wine business, peanut sellers, home inspector, Botox provider and high-end property rental firm that were selected from among 1,800 applicants to the Small Business Challenge have one thing in common: enthusiasm.

If you want to be a successful business owner, enthusiasm is a must. I would also add patience, a thick skin, and determination as a few other necessities.

Sun Belt Small Business Growth

According to a new study from Portfolio.com and American City Business Journals, Austin Texas is the best metropolitan area in the U.S. for starting a small business. The city's population growth, employment rate and burgeoning small-business growth helped it earn the No. 1 spot. It was followed by Baton Rouge, La., Raleigh, N.C., Charleston, S.C., and Portland, Maine.

Last place… Detroit.

Sad to see that my hometown of Nashville came in at #28, but that is an improvement over last year’s ranking of 33.

I Am The “IT” Department

Technology makes this a great time to be a small business. Rapid advances of technology have made it easier for small business owners to compete with the "big boys" on a newly leveled playing field.

From online postage to inexpensive accounting programs to easy web hosting and development, small businesses can operate nimbly, effectively and on par with larger competitors.

Want a great example? Barbara Heinrich, owner of Local Motion in Minneapolis, built her own mobile-phone application through BuildAnApp to display her hours, location and pictures of new arrivals. Several services have cropped up recently to help small businesses develop iPhone applications so that they can participate in the mobile market including:

• Swebapps.com
• Mobileroadie.com
• Kanchoo.com

If you are looking for a tool to maintain regular contact with customers that are on the go, you should probably check out one of these tools. Remember, you don’t have to be Southwest, CNBC or Amazon to have your own iPhone app.

Eating What You Kill

Chris Brogan, president of New Marketing Labs and the co-author of Trust Agents, offers up some great advice for new business owners.

• Focus on what you need to drive the business, not the “trappings” of a company.
• Keep your metrics simple, and focus on value.
• Use sweat instead of credit.

In business for just one year, New Marketing Labs is not only profitable, they are growing. These three key are definitely part of their winning formula. For me, working within your means and staying very lean are keys for success.  It’s nice to see that others agree.

Do You Know What’s Around The Corner?

"Regardless of how you go about innovating, make sure you're continually pursuing the next thing, because a company's commitment to staying relevant must never cease," writes Steve McKee, president of McKee Wallwork Cleveland Advertising.

As McKee notes in the article, you must understand how customers view and interact with your brand or service to understand what’s next for your business. And knowing what’s next is the only way you can stay ahead of the competition.

Customers and markets are always changing and staying ahead of the curve is imperative if you want to stay in business.

Many businesses start out as innovators, win awards, and over time fall behind.

Just like mutual funds, past performance does not guarantee future results. Even if you have customers tied up in long term contracts, you will eventually have to convince them to renew. Will you have something new and innovative to share or will you be relying on your previous service and relationship?

Continually innovating and growing will not only keep a business relevant; it will also give customers another reason to stay.

Saying Goodbye Is Never Easy, But It Can Be Profitable

Letting someone go is one of the most dreaded and difficult tasks that a small business owner will encounter.

Firing a customer is doubly difficult.

In this tough market, many small businesses are cutting loose demanding, resource-draining customers who want deep discounts or pay their bills late.

Dropping these "high-maintenance" clients reduces frustration and allows entrepreneurs to devote their time to more profitable clients.

So how do you know if you need to fire a customer?

If you have customers that don't get the value that you are adding, don't appreciate your service, or have unreasonable demands, you should think long and hard about continuing the relationship. 

Not only do these types of customers eat up a lot of time, they do not create any positive word of mouth for your business. They also frustrate your staff. By forcing your employees to deal with these people, you are sending them a message that their professionalism, values or sense of quality don’t matter.

Letting a customer go is never easy, but sometimes it just has to be done.

Hope, prayer and a charge card

Credit cards have always been a source of credit for startups, but other options are disappearing as banks withhold traditional loans and fail to buy into the Small Business Administration's loan-guarantee program. The 22 big banks that received government-bailout funds have cut their lending to small businesses by $8 billion since April when the government made them start reporting it.

Almost 60% of small business owners have used a credit card in the past year for business capital, according to a recent survey by the National Small Business Association (NSBA). In contrast, 45% of those polled had a bank loan. As traditional loans dry up and lenders such as JPMorgan Chase hoard cash and build reserves or just file bankruptcy, business owners are doing what they always do. They are finding another to way to succeed and to make things work.

On Demand (Free Agent Society)

Face it, we are all free agents.

iTunes and iPods forever changed the music industry. You can use Shazam to recognize a song playing on XM in a restaurant and download it immediately.

We can go to Hulu and watch 30 Rock or Family Guy whenever we want.

We can download movies to our DVR from Direct TV anytime we desire.

Thanks to the Kindle, books are now on-demand and Apple’s tablet PC will only fuel the market for digital readers and book downloads.

And now, like Major League Baseball players, workers are now realizing that they too are free agents and on-demand.

The New York Times small business blog offers up some great advice on managing a career. In short, manage it like a small business. With so many people unemployed or fearful of being laid off, human resources experts are recommending that workers think of their careers as small businesses because the market for temporary and contract work has picked up.

Social-networking sites, "cloud computing" and mobile communications likely will produce a "surge of entrepreneurs," says Jim Jonassen, head of Jim Jonassen & Associates Venture Search.

Just like a baseball team in need of a left-handed hitter who can hit with power, employers in need of PHP programmer with banking experience or a sales team that needs a specialist in selling to government agencies are signing players who fit their needs for a finite amount of time and just when they need it.

In the new world order, growing and cultivating employees for the long-term is going the way of AOL. Developing your personal brand and product, is now the new norm.

For baseball players, salaries and revenues exploded especially for those with exceptional or specialized talents. The new job market along with everything we buy or consume is quickly becoming on-demand and at the whim of buyer.

It will be interesting to see if salaries increase and how much movement occurs as the economy improves. I’m betting it will for workers who find their niche and realize their true value.

Create Your Own Space

Two leading schools of thought on how to handle competition involve rallying to crush a rival or joining forces to combat a bigger threat. But this BusinessWeek post considers a softer approach: owning a small, but narrowly defined, unique place and, by definition, negating competition.

Creating your own niche, creates your own market and definitely limits the competition. It also allows you to own your market.