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As a tidal wave of business and consumer bankruptcies continues to drown our economy, those who have taken (or are considering) the bankruptcy plunge should at least know that they are not alone. In fact, since the turn of the century the U.S. has seen some of the biggest corporate bankruptcies ever. The following is a brief rundown of several high-profile and influential bankruptcies, all of which occurred over the past 8 years. The businesses are listed in the order of filing.

1. Pacific Gas & Electric Co.- April 2001

With soaring wholesale power costs outpacing retail prices as a result of California’s 1996 deregulation law, which prevents the higher costs from being passed on to customers, the Pacific Gas & Electric Co. filed for chapter 11 bankruptcy in April 2001. Pacific Gas & Electric Co., is a subsidiary of the nation’s largest utility holding company, PG&E Corp which provides power and natural gas to northern and central California. At the time of filing, Pacific Gas & Electric Co. had accumulated $12 billion in debt and $36 billion in assets.

2. Enron- December 2001

With $63.4 billion in assets, the Enron filing was the biggest bankruptcy in U.S. history until it was eclipsed by WorldCom the next year and Lehman Bros in 2008. Immersed in obscure accounting practices that concealed loses worth billions of dollars, Enron’s downfall will certainly be remembered as one of the most notorious scandals in history. In the end, Enron’s stock plummeted from a high of $90 per share in mid 2000, to just $0.10 a little over a year later causing stock holders to lose some $11 billion.

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3. Global Crossing Ltd.- January 2002

Plagued by a combination of waning demand for telecommunications services in addition to reckless corporate and executive spending, the fiber-optic network operator Global Crossing Ltd, filed for bankruptcy protection in January 2002. At the time of its filing, Global Crossing had assets of $25.5 billion and liabilities of $14.6 billion, making it one of the biggest bankruptcy cases in U.S. history.

4. Adelphia Communications- June 2002

At its height, Adelphia Communications was the fifth largest cable provider in the United States. But that came to a pitiful end when founder John Rigas and his son Timothy were convicted for embezzling millions of dollars from the company, hiding $2.3 billion in debt, and deceiving investors about Adelphia’s profit and subscriber growth. Father and son received prison sentences of 15 and 20 years, respectively, and the company’s assets were later snapped up by Comcast and Time Warner in bankruptcy court.

5. WorldCom- July 2002

Just before filing for bankruptcy, WorldCom was considered one of the biggest long-distance companies in the U.S. With approximately $107 billion dollars in assets, its case was the second largest bankruptcy in history. WorldCom’s financial decline revolved around a massive accounting scandal in which the company’s total assets had been inflated by an estimated $11 billion.

6. Tyco International Ltd.- July 2002

In yet another example of executive scandal and corporate excess, former CEO Dennis Kozlowski and CFO Mark Swartz of the electronics giant Tyco International Ltd were found guilty of embezzling about $600 million from the company. Tyco filed for bankruptcy shortly thereafter.

7. US Airways- August 2002; September 2004

This troubled East-Coast airline filed for bankruptcy twice within a two year period. Though US Airways had a history of financial difficulty, the first bankruptcy filing was precipitated by September 11th terrorist attacks. The Reagan National Airport in Washington D.C., a major US Airways hub, stayed shut longer than any other airport. Even when the airport reopened, security delays mixed with a general reluctance to flying, adversely affected its profitable shuttle service between Washington, New York and Boston. Though it was able to get out of bankruptcy in 2003 after receiving a $1 billion loan from the Air Transportation Stabilization Board, it filed for bankruptcy again a year later after the airline was unable to secure $800 million in annual cost cuts from its workers’ unions.

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8. Conseco- December 2002

Struggling with a $6.5 billion debt load, Conseco Inc. a well-known finance and insurance company, filed for chapter 11 bankruptcy protection in December 2002. Much of its debt was attributed to a string of impetuous acquisitions made during the 1990’s, including the ill-fated $6 billion purchase of Green Tree, the nation’s largest lender to mobile-home buyers. The company is also known for its generous spending. Shortly after the Green Tree acquisition, Conseco offered a $75 million contract to former GE executive Gary C. Wendt in the hopes that he could turn the beleaguered company around.

9. Trump Entertainment Resorts- November 2004; February 2009

Citing high interest payments on financing that prevented the refurbishment and expansion of its gambling hotels, Trump Hotels and Casinos filed for bankruptcy protection in November 2004. Though the company emerged from bankruptcy a year later under the name Trump Entertainment and Resorts, its financial difficulties continued as the current recession took hold causing a slump in the gambling industry. In February of this year, the company sought bankruptcy protection again a few days after founder Donald Trump quit the board. At the time of filing, Trump Entertainment listed assets of $2.06 billion and debt of $1.74 billion.

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10. Delta Airlines- September 2005

After failing to post a profitable quarter since the year 2000, Delta Airlines, the nation’s third largest airline, could not sustain the sudden spike in fuel prices that came in the wake of Hurricane Katrina in addition to rising competition among low-fare carriers, such as Southwest Airlines. Another factor in Delta’s financial struggle included high labor costs, from which it was unable to secure concessions. Delta eventually exited bankruptcy in April 2007.

11. Northwest Airlines- September 2005

Just minutes after Delta Airlines announced that it was filing for bankruptcy, Northwest Airlines, the fourth largest carrier in the U.S., followed suit. Like Delta, Northwest was unable to sustain the increase in fuel prices and competition among low-cost carriers in addition to its high labor costs. The airline eventually emerged from bankruptcy in May 2007.

12. Delphi- October 2005

The bankruptcy case of Delphi, the largest auto parts maker in the U.S, has been shrouded in controversy. Delphi was originally established as a spin-off of GM, becoming a publicly-traded corporation in 1999. But it has since remained dependent upon GM for a significant portion of sales.

Many contend that the real purpose of Delphi’s creation was to prepare for a deep round of layoffs and wage cuts at both companies, and to shift pension obligations from the parent company to its spin-off. By filing for Chapter 11, Delphi was able to accomplish all this without union approval. Moreover, critics have been quick to harp on the fact that just a day before filing for bankruptcy in October 2005, Delphi increased the severance packages for 21 top executives claiming that it would be needed to keep them loyal to the company. The Delphi bankruptcy also paved the way for a series of sweeping rollbacks on auto workers at the Big Three in 2007, as well as the bankruptcies of GM and Chrysler.

13. Refco- October 2005

On October 17, 2005, just a mere three months after going public, Refco, a New York-based financial services company filed for Chapter 11 bankruptcy protection. The company’s financial downfall and eventual disintegration was attributed to a wide scale financial fraud in which Refco’s CEO and chairman, Phillip Bennett hid over $430 million in bad debt. At the time of filing, Refco posted assets of $33.3 billion and a debt that totaled $16.8 billion.

14. IndyMac Bancorp Inc.- July 2008

IndyMac Bancorp, based in Pasadena, California was at one time one of the largest mortgage lenders in the U.S. IndyMac once specialized in “Alt-A” home loans, those ubiquitous financial products that often did not require borrowers to fully document either their income or assets. As the rate of defaults increased, the lender eventually collapsed. Following comments made by U.S. Sen. Charles Schumer questioning IndyMac’s survival, customers scurried to withdraw more than $1.3 billion of deposits over 11 business days. Federal regulators seized the company, and less than three weeks later, it filed for Chapter 7 bankruptcy protection. At the time of filing, IndyMac’s assets totaled $32.7 billion, and its liabilities ranged between $100 million and $500 million.

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15. SemGroup- July 2008

SemGroup, a major U.S. oil marketing company, filed for bankruptcy protection in July of last year after succumbing to $3.2 billion in losses on energy futures and derivatives trades that were supposed to hedge its physical oil trading business. On the surface, the Tulsa, Oklahoma-based company suffered from a combination of record high crude oil prices ( up to $150 a barrel) and a volatile credit market. But some assert that a scandal was brewing behind the company’s outstandingly poor performance. At the time of filing Semgroup had $6.1 billion in assets and $7.5 billion in liabilities.

16. Lehman Brothers- September 2008

The announcement a year ago that Lehman Brothers that had filed for Chapter 11 bankruptcy protection is considered the biggest and most complex bankruptcy case in history with company assets totaling over $600 billion. But greater than that, the downfall of Lehman Brothers, a financial behemoth and seemingly invincible Wall Street icon, sent waves of shock and disbelief across the world in a way that no other prior bankruptcy was able to accomplish. As the news spread, financial stocks plummeted world-wide. Many cite Lehman’s cultivation of a culture of corporate excess and risk taking, while shunning accountability at the major cause of its financial decline.

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17. Washington Mutual- September 2008

“The Power of Yes!” The financial implosion at Washington Mutual (WaMu) was one of the most telling examples of the reckless lending and fraud that has helped fuel the current economic crisis. Several former employees have come forward to offer disturbing accounts of high risk loans being approved with little or no oversight and of a corporate culture with a “sweat shop” mentality. In the end, J.P. Morgan Chase purchased the failed bank for $1.9 billion in a deal brokered by federal regulators.

18. Tribune Group- December 2008

At the end of last year, Tribune Group, the newspaper and television chain that publishes The Los Angeles Times and The Chicago Tribune, filed for Chapter 11 bankruptcy protection. Part of the company’s financial problems stemmed from a sharp drop in advertising revenue brought on by the recession as well as a general shift of advertising to the Internet. But Tribune’s financial position worsened significantly by an attempt made by the company’s CEO Sam Zell to take the company private and thus claim a tax-exempt status. The move resulted in an employee stock ownership plan, which was basically wiped out after the company declared bankruptcy.

Another bizarre twist to the troubled company’s case allegedly involved former Illinois governor Rod Blagojevich. According to a criminal complaint filed against Blagojevich, the former governor was upset with editorial pieces that were critical of his performance and devised a plan to get the editorial writers fired which included a threat that the governor would block money for renovations to Wrigley Field (one of Tribune Group’s assets).

19. General Growth Properties, Inc- April 2009

General Growth Properties (GGP), the second-largest real estate investment trust and mall operator in the nation, filed for bankruptcy earlier this year spearheading one of the biggest commercial real estate bankruptcies in U.S. history. Facing a tight credit market and a weak economy that dampened consumer spending and put many mall occupants out of business, the Chicago-based company was unable to support the $27 billion in debt it had amassed in previous years by buying up malls and shopping centers. A large portion of that debt came from GGP’s 2004 strategic acquisition of Rouse Co., a Columbia, Md.-based real estate development and management company. The bankruptcy filing made in New York included most of the GGP’s malls which will continue to operate.

20. Chrysler- April 2009

On April 30th of this year, Chrysler became the first of Detroit’s Big Three automakers to file for bankruptcy protection largely in response to a dramatic slump in sales that has plagued the company since last fall. Touted by President Obama as a “pillar” of the industrial economy, Chrysler has already received some $7 billion in tax payer bailout money ($4 billion of which was handed over during the Bush Administration). The Obama Administration rushed to move the ailing automaker into bankruptcy protection so that the company could close a strategic alliance with Italian automaker, Fiat. There has been much public outcry over Chrysler’s bankruptcy case, especially over its new ownership structure as well as the recent “revelation” that the bailout money will not be repaid.

21. General Motors- June 2009

Just one month after Chrysler filed for bankruptcy, General Motors (GM) followed, earning the “distinction” as the fourth largest bankruptcy case in U.S. history. Even $19.4 billion in federal help was not enough to keep the trouble automaker out of bankruptcy court, and the government has further pledged another $30 billion to help the company during its reorganization. A “new GM” is expected to emerge out of bankruptcy that will revolve around a mere four brands, Chevrolet, Cadillac, GMC and Buick, as well as a few of its overseas operations.

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In its wake, GM’s bankruptcy will have a major impact on a cross section of Americans. The move will result in the closure of numerous plants and dealerships, which means thousands of U.S. employees stand to lose their jobs. Moreover, approximately 650,000 retirees and their family members who rely on GM for health insurance will suffer cutbacks in their coverage. Investors holding $27 billion worth of GM bonds, stand to receive new stock in a reorganized GM worth a fraction of their original investment. Owners of current GM shares, will see their investments disappear.

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A few weeks ago, I posted this article offering a few tips on how small business owners can grow their businesses during the recession. As I noted in the post, even in this dismal economy some businesses are thriving.

But for the majority of smaller businesses the focus has become just trying to hunker down and survive the economic storm while remaining somewhat intact.

One of the best examples of small business survival has been in the restaurant industry. The restaurant industry as a whole has seen both ups and downs over the past two years. Price increases in products and supplies, lower consumer confidence, changes in consumer behavior and demand, and less available credit have all had their impact on food services businesses. Yet many are proving to be surprisingly resilient and are successfully weathering the storm.

What’s their secret?

Successful restaurant owners are paying close attention to changes in the market and then adapting to them, they are also focused on developing and defining their brand..

So what specifically are some restaurants doing? Here’s a brief rundown:

Paying attention to quality:

Many restauranteurs are focused on the quality of the experience their customers have when they come to their eateries. This translates into the quality of the food, the service, and the overall level of hospitality. By providing an enjoyable experience, restaurant owners are giving their customers the opportunity to break away from all the dreariness and are in the processing cashing in.

Creating the perception of value:

These days as people look for ways to save money, they need a lot more incentive to spend it on eating out. Put simply, customers are looking to stretch their hard-earned dollars as far as they will go. One successful strategy used by restaurant owners is to focus on their customers’ perception of value. 

But communicating to customers that they are getting a good value (in terms of food quality, portioning, or ambiance) while at the same time not cheapening the perception of the business is actually a delicate balancing act.  It requires sound pricing strategy, menu planning, and marketing. Several restaurants have begun bundling meals, increasing portion size, or adding extras, like a free dessert, to add value while avoiding the appearance of discounting.

Using promotions to draw customers:

Many restaurant owners are also trying to draw customers with a variety of promotions and specials. Some examples include: having a night where kids eat for free or for a small charge, having a theme night, or setting aside slower times of the day or week for special value deals or unique events. Other restaurant owners are experimenting with cooking classes, dietary workshops, or birthday promotions.

Using the Internet to advertise:

The Internet can be an effective and often cheap means of advertising a small business, and this has not gone unnoticed by many restaurant owners. Many restauranteurs rely on a conscientious email marketing campaign, are making sure their business is listed on the popular online directories, and are a maintaining a website.

Emphasizing their unique brand:

All of the previous points are included in this one. The most successful restaurant owners understand the experience and the occasions that their business (i.e. their brand) is positioned for and are focused on building up these areas.

In short, whether you run a foodservice business, or another kind of small business, there are definitely a few lessons to be learned.

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Securing a contract to supply goods or services to a big corporation could be godsend for a small business at a time when consumer confidence (and spending) has plummeted. Small business owners, especially minorities and women, should be aware that several big businesses have programs in place to actively reach out to and cultivate their network of small suppliers.

Not only do many of these corporations provide the potential for lucrative contracts, but some of them also offer mentoring programs. At IBM, for example, the corporation individually assigns executives to offer guidance to promising small suppliers for up to a year and a half.

To be considered by a corporation that seeks out minority suppliers, you must first certify your business as a minority business enterprise (MBE) or women business enterprise (WBE). The requirements for certification generally include:

• You must be from a specified ethnicity or a woman.
• You should have ownership of at least 51 percent of your business.
• You should have have solid business management practices in place and financial viability.

• You must be a U.S. citizen.

Be sure to check out the the Billion Dollar Round Table. Each member corporation spends at least $1 billion annually with minority- or women-owned suppliers.

Any potential small business supplier to big businesses- whether minority owned or not- should also take a look at the National Business Matchmaking Online Network. This organization helps bring corporate and government buyers together with small companies through a series of regional events and networking tools.

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There is a lot of difficult news out there these days. With all the talk about pension cuts, pay freezes, layoffs, bankruptcies, and government bailouts, the fact that some industries are not only surviving the recession, but thriving in it, may seem hard to believe. But the truth is that in the midst of all the economic turmoil, there are industries that are prospering. Some of these businesses are typical recession-busters, others are particular to the current recession.

1. Sweet Treats

When the going gets tough, the sweet tooth gets going. Inexpensive candies, snacks, and treats become the comfort of many as people try to deal with hard times. In addition to a number of candy manufacturers and distributors around the country reporting a significant increase in sales, Nestle and Cadbury have both reported profits. Ice cream sales are also up among independent parlors as well as name brands, such as Häagen-Dazs and Ben and Jerry’s.

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2. Entertainment

Hollywood is profiting from the recession enjoying one of its biggest years ever in box office sales to the tune of $10 billion. The video gaming industry is also are experiencing a surge in demand. Most notably, in the first week of sales Grand Theft Auto IV, produced by Rockstar Entertainment raked in some $500 million.

 3. Technology

This one seems a bit counter-intuitive at first. As the recession drags on, one would expect the sales of consumer electronics to drop across the board. While there has been a slowdown in some areas, several companies are reporting a surge in sales. Sales of Apple’s iPhone 3GS out-performed analyst expectations by as much as 50%. Sales of netbooks have also been brisk.

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In general the IT sector is going strong specifically in areas of data storage, processing, and management as well as software design and development, networking and systems administration.

4. Life’s Little Pleasures

A little indulgence can go a long way. While high-end consumer products are having a hard time moving in the recession, a range of cheap, feel-good items are experiencing brisk sales. Low-cost cosmetic lines for products such as lipstick and lip balm, anti-aging creams, and self-tanning creams are predictably on the rise. Wholesale beer sales are also doing well. Most notably, Anheuser-Busch, the biggest brewer in the United States, has been reporting a profit despite concerns that rising costs for raw materials like glass, barley, wheat, and fuel would undermine any gains. Finally, tobacco sales across the nation going strong.

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5. Profiting from the Damage

As people across the nation try to get a grip on their mounting debt, it is no surprise that repossession firms, auctioneers of foreclosed homes, debt consolidation companies, debt consultants, collection agencies, and bankruptcy lawyers all have plenty of work these days to keep themselves busy. There have also been a surge in the creation of companies that handle the clean-up and refurbishing of foreclosed homes and their surrounding property. Though these industries may be looked upon as scavengers profiting from the downtrodden, who is going to argue with the fact that someone has to do it.

6. Payday Loan Industry

Call them loan sharks or predatory lenders… but they are still legal. And right now business is booming for the payday loan industry as consumers try to cover their cash shortfall with these high interest, short-term loans.

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7. Health Care

Though the health care industry as a whole is experiencing cutbacks, as the baby boomer generation gets older there has been an increased demand for home health care services and specialized medical procedures generally performed in small outpatient clinics and doctor’s offices. This has increased the need for qualified nurses and specialized doctors.

8. Discount and Second-Hand Retailers

As household budgets get tighter, consumers are flocking to discount retailers, such as Wal-Mart and Dollar General. Thrift stores and Goodwill stores across the country are also drumming up traffic even as sales among other retailers have plummeted .

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9. Re-education

The demand for online degrees, professional certification, and continuing educational programs have all increased. As more and more American workers are laid off (or fear being laid off), many are are seeking re-education opportunities. The trend is also likely due to the increasing cost of higher education that has out-paced inflation for several years in a row. Although quality online degrees still require a significant investment of money, when you factor in the savings from room and board as well as scheduling flexibility, in the end an online degree comes out much cheaper.

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This is the final post in a four-part series on employee theft.

If you suspect that theft or fraud has occurred in your business, then you should promptly follow up with a thorough investigation. When done properly, an investigation can help you limit your loses and quickly resolve the situation.

First you need to determine what is missing or which reports or systems seem inaccurate This will help you to get a handle on the extent of the loss. Take stock of your inventory and check your financial accounting system for any unusual entries or changes in cash flow.

Second, you should try to figure out approximately when the theft(s) occurred and by whom. Make a list of all employees who could have had access to the missing items or information. In some cases, if you have surveillance cameras, it may help to review the tape to get an idea of who was around when the theft occurred

Finally, your investigation should end with either an employee interview or survey. Basically, you are looking to gather information from two distinct groups of people: those who you suspect may have been involved in the theft or fraud and innocent co-workers who may have some knowledge or suspicions as to who committed the act.

The interview and/or survey should be confidential. Employees should be informed that no co-workers will know what was said about them and that there will be no repercussions for sharing information.

Some questions to consider asking:

1. Do you know any employee(s) has stolen something from the business? What was stolen? When?

2. How do you think the theft might have occurred?

3. Has any employee acted differently before or since this theft that makes you think he or she might be involved? Who? How did they act?

4. Are any employees reluctant to participate in this investigation or encouraging anyone else not to participate? Who?

5. Which employees do you think might have committed this theft? Why?

6. Which employees do you trust? Why?

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This is the third post in a four-part series on employee theft.

The Association of Certified Fraud Examiners (ACFE) in its Report to the Nation on Occupational Fraud & Abuse recently estimated that the typical business will lose an average of six percent of revenues from employee theft, and according to the U.S. Chamber of Commerce employee theft is major factor behind one-third of business bankruptcies.

The bottom line is that employee theft is serious business, and making a conscientious effort to prevent it deserves the attention of any small business owner who hires employees.

The following are a few tips to help you prevent employee theft in your small business:

Create an anti-theft policy.

Your business’ anti-theft policy should include several key elements. First, you should establish clear guidelines and procedures for handling inventory, supplies, equipment, cash, receipts, and any sensitive information. Describe what happens when employees are caught stealing from the company, including the process of warnings, firing, and pressing charges.

Keep in mind that your policy should address the most common forms of employee theft including stealing cash, inventory, equipment, or supplies, conducting shipping and billing scams, forging receipts, faking an injury and claiming compensation, and putting fictitious employees on the payroll.

You should also mention any internal controls your business has in place (such as installing cameras or conducting random audits) to prevent theft.

Make sure your employees understand the rules.

The most well thought out and comprehensive anti-theft policy will be limited in its effect if employees are unaware of the consequences of stealing from the company. All employees should receive the business’ anti-theft policy in writing, and every employee should be required to sign a form to verifying receipt of this information.

Screen your employees.

Running background checks on potential new hires may seem like a time consuming or costly process, but it will save you a lot of time and money in the long run should you hire someone who later proves to be problematic. Though you can never be completely sure that the people you are hiring will be trust worthy, by screening any new hires you can effectively reduce the number of dishonest employees that you bring into the business.

When conducting a background check be sure to look for any criminal records and involvement in lawsuits You should also verify their stated level of education and degrees at accredited institutions as well as an employment verification of positions, length of employment, and reasons for leaving.

Keep in mind that there are several companies that can run background checks for you. But you should still check the candidate’s references and talk to previous employers.

Monitor operations.

Keeping a watchful eye on your business’ operations will help you both prevent theft and spot any suspicious activity. You should also being setting up a system of internal controls with a focus on financial reporting and your business’ precious assets. Here are some common ideas:

• Set up surveillance cameras, do a random walk-through in your business, and conduct unannounced audits and spot inspections.

• Access to physical and financial assets as well as sensitive information and accounting systems, should be restricted to the employees you trust.

• Establish an anonymous or confidential reporting system for employees, vendors, and customers to report any violations of policies and procedures without fear of repercussion.

Create a positive work environment.

Incidents of theft often go hand-in-hand with financial or emotional stress. As stress levels increase, so does crime. Make sure your employees feel valued and that the lines of communication are open- even if you have had to make reductions in employee bonuses and benefits. When employees trust their employers they are more likely to act in the best interests of the business.

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This is the second post in a four-part series on employee theft.

As the economic recession churns on and countless Americans struggle to get some control over their mounting debt, incidents of employee theft and fraud are becoming more and more common. The FBI even calls employee theft “the fastest growing crime in America,” and this trend is having a devastating effect on small businesses.

Although employee theft may immediately be associated with pilfering inventory or stealing cash, there are actually several ways that employees can steal from their employers. The Boston Globe and Denver Post recently reported that U.S. companies lose nearly $400 Billion per year in lost productivity due to loafing (”time theft”). Some of the more sophisticated examples of employee theft include: conducting shipping and billing scams, forging receipts, faking an injury and claiming compensation, and putting fictitious employees on the payroll.

The Association of Certified Fraud Examiners (ACFE) in its Report to the Nation on Occupational Fraud & Abuse recently estimated that the typical business will lose an average of six percent of revenues from employee theft. The report also indicates that small businesses are especially vulnerable to occupational fraud since they generally have the limited resources to devote towards crime detection. The average loss suffered by businesses with fewer than 100 employees was $200,000, which was significantly higher than the average loss in any other category, including the largest businesses.

Moreover, a U.S. Chamber of Commerce survey recently reported that a staggering one-third of business bankruptcies are attributed to employee theft.

Employee theft often goes beyond loses in time, money, and resources, it can also tarnish a business’ reputation as a provider of quality products and service. At a time when every dollar, and every customer counts, the way a business responds to incidents of employee crime may make the difference between staying afloat and sinking.

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Yes, there are small businesses out there that are considering growth opportunities even as our current recession keeps a tight hold on our economy. But for those small businesses that are in this situation, any steps that they take to expand operations should be carefully implemented.

Here are a few tips on how to responsibly grow a small business in a recession:

Now is the time to re-examine, re-define, and streamline company objectives.

A recession often changes consumer demand, spending habits, and attitudes. It is thus extremely important that small business owners take the time to ensure that their businesses are operating in line with this a shifting environment.

Keep up the trust of your employees.

Even if you cannot offer a big benefits package, make sure there are methods in place for employee recognition and that the lines of communication are open.

Focus on customer service.

Catering to your customers is after all the focus of your business, and having good customer service does not have to get expensive. Like your employees, you want to build the trust, loyalty, and regard of your customers.

Develop creative, low-cost ways to advertise your business.

Getting your name out there effectively does not have to break the bank.

One of the biggest obstacles to small business growth is lack of funding or inadequate cash flow.

Make sure that you are doing all you can to maximize cash flow, such as implementing effective debt collection strategies, good price management, inventory management, and the coordination of equipment purchases. You should also be aware of all your financing options.

Stay on top of current trends in technology.

There are many software programs, services and devices on the market that will greatly improve efficiency and give your business a competitive advantage even over your bigger competitors. Many of these essential business tools are also relatively inexpensive.

Keep your eyes open for opportunities.

A recession may provide many opportunities to expand business operations. Real estate, for example, is much cheaper now and so is many raw materials. Consumers also have different needs, and your business may be able to capitalize on them.

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Over the past few weeks the Obama Administration has placed the topic of health care reform front and center on the national agenda. The move has sparked fresh debate, concern, and anxiety among politicians, consumers, business owners big and small, as well as health industry experts and representatives.

Most agree that something must be done to change a system where approximately 45 million people across the US are uninsured and that oversight should be extended to regulate a health insurance industry accused of using deliberate and questionable tactics to maximize profits, such as raising premiums, co-pays and deductibles, refusing coverage or charging exorbitant rates to people with pre-existing conditions, and even retroactively denying coverage to people with established policies.

But exactly what will be done in the end is still very much up in the air, and this has been a subject of much concern among small business owners in particular.

It is estimated that about half of those who are uninsured are people who are either self-employed or who work for small businesses. While most big companies still provide health benefits, an astronomical rise in insurance premiums over the last decade has help to create a situation where many small businesses can no longer afford to cover their employees.

There are really three key issues in health care reform of particular concern to small businesses, namely: employer mandates, the creation of a government-run, public insurance plan, and changes to the tax code.

With employer mandates the government would require businesses to either provide health insurance to their employees or pay a fee to the federal government. This may be too much of a financial burden for very small businesses- especially in the present economy. The establishment of a public health plan could provide much needed competition to private insurers and reduce the cost of health insurance. But some fear that this will drive private insurers out of business. Finally, various changes to the tax code have been proposed, of mention are several tax increases, such as taxing some employer-provided coverage, and small business tax credits to help offset the costs of providing insurance.

Whatever the actual outcome of the health care reform bill, the relationship and involvement of small businesses to health benefits is likely to change… for better or for worse.

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The recent announcement that GM has filed for bankruptcy is only the latest in a list of big corporations that have taken the financial plunge- a list that includes such “household names” as Circuit City, KB Toys, CompUSA, Linens n’Things, and most recently, Chrysler). This unavoidable trend also includes many smaller businesses and consumers.

Since this trend is likely to continue for the next year or two ( I’m on the pessimistic side), I wanted to dedicate a post to the subject.

I have found that although most people (especially business owners) may recognize that bankruptcy is something to avoid, they often do not know what actually happens when a business “goes bankrupt.”

The first thing to know is that when it comes to businesses, there are two types of bankruptcy that apply, Chapter 7 and Chapter 11. Each one has very different terms, procedures, and consequences.

Under Chapter 7, also known as “liquidation bankruptcy” once the filing is underway, an administrator or trustee is appointed to sell off the business’ non-exempt assets so that the outstanding debts can be repaid to the fullest extent possible. The portion of the debt that cannot be repaid through the asset liquidation is then discharged. Businesses generally try to avoid Chapter 7, because the process makes it impossible to continue operating.

With a Chapter 11 bankruptcy filing, the business continues its regular operations, maintains control and ownership of all assets, and tries to draw up a plan to pay off creditors. A business will choose to file Chapter 11 if its future revenues will be higher than the liquidation value of its assets. Many of the creditors will also benefit since they can get more money back if they allow the business to reorganize and work out some kind of payment plan. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the business has 120 days to come up with its reorganization and payment plan.

The major drawback for filing Chapter 11 is that it can be a costly and time-consuming process. Even smaller businesses will need to hire professionals to help them sort out their debt, and sometimes a plan’s approval can take several months

All business owners who are considering bankruptcy should keep in mind that the bankruptcy will appear on the business’ credit report which will make it harder for the business to get business loans, credit, and leasing contracts for several years. Bankruptcy also stunts business growth. Under Chapter 11, the business can only conduct regular operations. This means no growth-oriented transactions, such as buying a new property or expanding an existing space.

In short, though bankruptcy may help some businesses stay afloat, this “life jacket” has a lot of lead inside of it.

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