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The NFIB 411 TOP 9 Questions for December 2008 focus on the economic challenges business owners are facing.

1. RECESSION - What is the greatest problem small business now faces resulting from the nation's current financial difficulties? (Vol. 8, Iss. 7, Q#2).

2. RETIREMENT - At what age do small, employing business owners expect to retire? (Vol. 5, Iss. 4, Q#4).

3. TAXES - How well do small business owners understand depreciation for tax purposes?  (Vol. 6, Iss. 6, Q#4B).

4. HAZARDOUS WASTE - How many small businesses store, transport, or dispose of hazardous materials, including acids, solvents, pesticides, used oil, heavy metals such as lead or mercury, chemicals, combustibles and similar substances?  (Vol. 7, Iss. 2, Q#4).

5. TIME ALLOCATION - As the United States entered the recession in early 2008, how many small business owners were spending more time in the business than they did just six months before, how many less, and how many did not change?  (Vol. 8, Iss. 1, Q#2).

6. BUDGET - How often do small business owners with a written budget compare their budget projections to what is actually happening?  (Vol. 7, Iss. 4, Q#12).

7. EMPLOYMENT CONTRACTS - How many small businesses have an employment contract with at least one employee?  (Vol. 7, Iss. 1, #10).

8. CREDIT CARDS - How many small business owners typically pay outstanding balances on their business credit cards at the end of every month?  (Vol. 8, Iss. 3, Q#24).

9. GAS PRICES - How do small employers with business vehicles change operation of those vehicles to compensate for increases in the price of gas and diesel?  (Vol 6, Iss. 3, Q#3c).  

This week's job reports are indeed chilling.  This really is beginning to remind me of the late 1970s into the mid 1980s when we experienced a long period of mostly down economic times.  Small business had been our one bright spot in job creation, but with this week's ADP Small Business Report found that small businesses lost 79,000 jobs in November, the largest decline in more than seven years.

Although our cup no longer runneth over with economic growth, I do firmly believe that the glass is still half full.

I see the energy in young entrepreneurs in the classroom.  I saw amazing creativity this week at the Bloblive Nashville event we hosted at Belmont.  I see the determination of the entrepreneurs in groups like EO (Entrepreneur Organization) who are sending 75 people to Belmont today to learn about how to grow and expand their ventures.  And I see the enthusiasm that comes from the continued growth in readership of this blog.  This what gives me hope for the future.

2009 will be a year of working to survive for some, but also a year of opportunity for many if they keep using their entrepreneurial wit and skill. 

Here are the Top 9 Questions from Denny Dennis at the NFIB Research Foundation (click on each question to find the results from their surveys):

1. CREDIT LINES - How many small business owners have one or more credit lines at a financial institution, NOT including credit cards?  (Vol. 8, Iss. 3, Q#25.)

2. IMMIGRATION - Do more small business owners think they benefit from expanding the number of H1B visas (for highly skilled people) than think they would be damaged by it?  (Vol. 8, Iss. 2, Q#12.)

3. BUSINESS FORMATION - If most current business owners got into business by starting their firms, what is the second most common form of entry?  Purchase?  Inheritance? Or, Employees brought into ownership?  (Vol. 2, Iss. 6, Q#12.)

4. HEALTH INSURANCE - Who shops for employee health insurance on behalf of small firms? (Vol. 7, Iss. 3, Q#3.)

5. INVENTORY - How many days of inventory do small business owners try to maintain on their most important items (among those whose inventory is a major expense)?  (Vol. 6, Iss. 4, Q#3a.)

6. HOME OFFICE - How many small employers have a home office?  (Vol. 8, Iss. 4, Q#9.)

7. DISASTERS - What is the biggest problem typically caused when natural disasters strike small businesses?  (Vol. 4, Iss. 5, Q#4.)

8. CREDIT CARDS - What portion of small business owners typically pay off credit balances at the end of every month?  (Vol. 8, Iss. 3, Q#24.)          

9. TECHNOLOGY - How well do small business owners think they embrace new technologies in their businesses?  (Vol. 5, Iss. 5, Q#5.) 

It is up to us.  It is up to all of us who call ourselves entrepreneurs.

Mountains of money to banks, home builders, auto companies, etc., etc., etc., are not going get this economy moving.  We need to listen to Peter Heslam at Business as Mission Network:

Key to the solution is entrepreneurship. While this requires no state programmes to initiate, governments that do assist aspiring entrepreneurs get good value for money - the average cost of a business start-up is less than the average annual cost of keeping a student at university, a prisoner in jail or a family on welfare.

I ask you, then, to rise up to the challenge again. Education, health care, social security: These domains need your voices, your intellect, your credibility, your time and your money.

In each of these domains, there are some early successes. Edward Fields is breaking through the morass of education problems with his start-up, HotChalk (see "A Technological Fix For Education"). Kirk Loevner is cracking health care with Epocrates. Their experiences offer some insight into alternative business models, marketing models and approaches to problem solving--most notably using advertising dollars to fund resources for teachers, students, doctors and patients.

In education and health care, a tremendous amount of inefficiencies can be tackled with technology. Barack Obama...will need help figuring out how to reform health care and education from within the system without further ballooning the deficit.

It is up to us.  Now is not the time to put fear in the minds of today's youth.  More than ever, we need to prepare them to get the economies of the world growing again, as Lisa Gibbs so clearly argues in her essay at the Miami Herald:

Nurturing the next generation of entrepreneurs is critical to building a regional culture of innovation, which ultimately leads to more, higher-paying jobs.

It is up to us.  We need small business to not only fix our economic mess, but our social problems, as well.  The Chronicle of Philanthropy highlights the important role that entrepreneurs play today in this realm:

Small businesses give generously to charity, with three-quarters of small-business owners in a recent survey saying they donate a percentage of their profits to nonprofit organizations.

On average, small companies contribute 6 percent of their profits to charity, according to the study, which was conducted by American Express.

It is up to us.

Roy at Roysville is correct -- it is time to get your nose out of your books and your plans and get to work. 

Listen to Finer Minds and be ready to be an agile entrepreneur -- ready to create new ventures, new jobs, and real change.

It is not up to Washington or Wall Street.

It is up to us.

During the recent robust times of economic boom we can all think of entrepreneurs who succeeded in spite of themselves.  Even with a marginal business model and mediocre talent, these lucky entrepreneurs benefited from an economic tide that seemed to float a lot of boats that seemed to be less than seaworthy.  

Now it is time to get realistic and be honest with yourself as you launch and grow your ventures.  I like the words of advice offered by Nathaniel Whittemore at the blog Social Entrepreneurship: 

To be a successful entrepreneur, you need to know not just what you're good at, but where you flop. Whether your enterprise is social or financial, you need to have a level of self-awareness that demands you surround yourself with folks with complementary strengths. In today's world especially, there's nothing more important than the team. Lose the pride, figure out what you suck at, build from there.

Now more than ever it is time to take good care of your customer.  New customers are hard to come these days, and any lost customer will be much harder to replace.

A great example of the right way to treat customers comes from my wife's cousin Ted and his wife Sally.  They own a grocery store in a small town in Wisconsin.

Over the past few months they have seen a strong increase in sales.  It seems that with higher gas prices people have not been as willing to travel to nearby larger cities to shop at the larger chain and big box grocery stores.

They are not taking this windfall of new business for granted, however.  They are doing everything they can to retain these new customers and turn them into loyal "regulars" in their store, through great service and by creating good value.

A very wise lesson for all of us in these difficult economic times.

From the NFIB Research Foundation, here are their Top 9 questions for October 2008:

1. WEB SITES - How much does a Web site typically contribute to the sales of a small employing business?  (Vol. 6, Iss. 7, Q#15a).  

2. CREDIT RECORDS - In the last three years, how often did small employers find that their business credit records were inaccurate?  (Vol. 7 Iss. 7, Q#2a).

3. CHECKING REFERENCES - How likely are small employers to request and check out the references of a prospective employee?  (Vol. 7, Iss. 8, Q#17).

4. ELECTIONS - What proportion of small employers are registered to vote?  (Vol. 5, Iss. 4, Q#2).

5. LOCATION - About how long, in minutes, does it take the small business owner to drive from his or her home to the business?  (Vol. 6, Iss. 2, Q#6).

6. SUPERVISORS - How many supervisory employees, other than the principal, do employing, small businesses typically have?  (Vol. 4, Iss. 7, Q#9a).

7. TAX PREPARATION - What is the principal reason that small employers engage a tax professional or accountant to prepare their federal business tax return?  (Vol. 6, Iss. 6, Q#1a).

8. SBA - What is the principal direct effect of the Small Business Administration (SBA) on employing, small businesses?  (Vol. 6, Iss. 5, Q#4).

9. PURCHASE/LEASE - How many small employers own the building in which their business is principally located?  (Vol. 6, Iss. 3, Q#4f).

Chad Moutray, who authored the study I linked to the other day on the challenges and opportunities that lie ahead for entrepreneurs, has some good tips for small businesses on weathering these current difficult economic times over at his blog.  They come from over 1,000 responses to a question he posted at Linked In.

Here are the top 10 recommendations:

1. Cut operating expenses and discretionary spending
2. Tightly and diligently manage cash flow
3. Improve liquidity, tighten working capital
4. Streamline inefficient processes with technology
5. Keep your number one focus on existing customers
6. Increase marketing and advertising efforts
7. Go after markets that are less affected by the downturn
8. Diversify and expand product and service offerings
9. Retain your best staff and recruit top talents
10. Be transparent with employees and keep them motivated

Today's touch economic times require that entrepreneurs develop an even sharper set of skills.  A new book by Norm Brodsky and Bo Burlingham, aptly titled The Knack, will quickly become an indispensible tool for any entrepreneur facing the tough times ahead.

The Knack is full of practical wisdom.  It uses rich examples and storytelling to illustrate a treasure chest full of tips and good advice.

The authors give a lot of attention to making those early sales -- a critical skill set for entering any market.  But, they also warn against developing a myopic sales mentality.  You attract customers with good sales strategies, but you take care of them and keep them through sound business practices.

One of my mantras with our students is to "know the numbers."  The Knack offers pearls of wisdom on cash flow and understanding your financials. For example, the authors state this about accounts receivable:

Receivables are loans to your customers.  Make sure your portfolio is in good shape.

Many business owners are much too casual in extending credit.  They take an "anything for a sale" approach.  But cash flow is was matters -- not just revenues.  Don't make loans like the mortgage bankers did over the past several years.  Instead, only extend credit to those who you know can and will repay you. 

Every chapter ends with four tips called "The Bottom Line."  It offers a clear and sharp summary for the rich stories and examples in each chapter.

Just as the E-Myth quickly became a classic, I predict that The Knack will become a favorite for most entrepreneurs,  Every copy will soon be full of underlined passages and dog-eared pages.