Landlord Squeeze

If you?re curious about ?the impact of the current financial crunch on small businesses,? just read this
e-mail message:

?We opened up a franchised retail store using a home-equity loan a couple years ago. We?ve been keeping our head above water, but with the current economy, things are going south. To add insult to injury, the home-equity line of credit has been since frozen by the bank because the value of our home has gone down. I looked at our lease and we are stuck with a personal guarantee for the rent for 10 years. I think we are going to have to close the doors and was wondering what I should do about the lease.?

Do everything you can to get your costs down to rock bottom ? fire your employees and hire your kids and teenage nephews and nieces. Not only are they inexpensive labor, but you actually get tax breaks for that. Ask your franchise for a ?break? on your monthly royalty payments until you turn cash-positive. If that doesn?t work, tell the franchise you want to sell your location and start looking for buyers

. Focus on recent immigrants to the United States ? these folks will jump at the opportunity to own their own business if the price is affordable and they stand a much greater likelihood of success because their cost-of-living expenses are likely to be much lower than yours.

If all else fails, explain your situation to your landlord and be prepared to back it up with hard numbers. Offer the landlord a monthly ?percentage rent? in exchange for a reduction of your fixed monthly rent ? this is a percentage of your gross sales each month and usually is in the range of 2 to 5 percent. Doing this makes the landlord a partner in your success or failure ? if the economy improves, he may actually do better with this arrangement than he is currently with just a fixed monthly rent payment.

If the landlord won?t ?play ball? (many won?t because their mortgage banks are playing the same games with them that your home-equity lender is playing with you now), then tell the landlord that you will have to vacate the space in a few months.

If your landlord is able to find a new tenant for your space before you run out of money, you will still be liable on your personal guaranty, but there?s a good chance you won?t be called on it if the new tenant is solid. If the landlord has to reduce the rent to attract a new tenant, you will be on the hook for the difference between the rent you were paying and the rent the new tenant is paying.

Offer to pay this amount each month rather than in a ?lump sum? installment. Not an attractive prospect, but it?s a whole lot better than being on the hook for 10 full years of monthly rent charges.

Bola OlabisiIBM Hosts Global Entrepreneurship Week Activities

Joining the launch of Global Entrepreneurship Week, IBM Corp. will host a series of live webcasts featuring panels of international women business leaders who will share insights on their experiences and best practices for starting, managing and growing a business. The brainchild of The Kauffman Foundation, Global Entrepreneurship Week, Nov. 17?23, is dedicated to activities that will inspire, connect, inform, mentor and engage entrepreneurs. More than 75 countries will host activities in support of the initiative, with businessowners, organizations, associations, academic institutions, corporations, governmental leaders and heads of state encouraging entrepreneurs to ?unleash? their ideas and solutions on a global, connected marketplace.

IBM will host two ?Women Entrepre-neurs Leading Innovation Globally? webcasts on Nov. 19, featuring such panelists as Ching-Ning Chu, best-selling author of The Art of War for Women and president of Asian Marketing Consultants Inc.; Maria Contreras-Sweet, chair, Proamerica Bank S.A.; Bola Olabisi, CEO, Global Women Inventors and Innovation Network; Elizabeth R. Thornton, CEO, Entrepreneurship Advantage Inc. and adjunct professor of entrepreneurship at Babson College and Boston University School of Management. Marilyn Johnson, IBM?s vice president of market development, will moderate the webcasts.

IBM is also encouraging its employees and others to teach an entrepreneur class for a day at a local school or college, mentor an entrepreneur, sponsor or host an entrepreneurial ?idea? or ?think tank,? bring entrepreneurs together via social networks such as Facebook, MySpace, or Second Life, or organize other events and activities.

For information on how to support Global Entrepreneurship Week, visit
By Salome Kilkenny