Buying the Store

Proof that entrepreneurship soldiers on even in the face of recession: My Smart Answers column yesterday gave detailed advice to a reader interested in buying the company where he works as business manager.

As the expert I interviewed points out, finding a qualified, enthusiastic buyer under their noses is quite a boon for the sellers. Someone who manages the firm, and is familiar with its financial situation from the inside out, is an ideal buyer for the current business owners. The expert advises the buyer to use his position as leverage for a good deal on the sale.

Earlier in the week, I wrote about government resources for entrepreneurs. All too often, programs for entrepreneurs are "best kept secrets," while scams, ploys and outright frauds (the "free money" myth) get loads of publicity.

Funny Business

The guys at Comedy Central were at the top of their games last night, proving that they have no trouble mixing hilarity with spot-on social criticism, even post-W.

Jon Stewart's utterly devastating smackdown of CNBC for its reportorial failures leading up to the financial collapse must be seen to be believed.

And Stephen Colbert's parody of the out-of-control doomsday scenarios emanating from cable TV-land was a crack up.

I'm going to do some research on the effect of these worst-case-scenario predictions I've been hearing recently (and they're not just on Fox News). Given how much the economy is affected by collective psychology, this fear-mongering can't be helping and it seems to me it's getting pretty ridiculous. Stay tuned.

Where's The Money?

A reader asks a great question: "What happened to the money?"

What does he mean? Well, we're immersed in a global economic downturn. And because of that, most of us have lost money. The money that we thought we had - in home equity, saved for retirement, etc. - has dried up.

But where did it go? Overseas? To outsourcers? The big oil companies? Big pharma? Seems like a mystery, doesn't it?

Actually, it's not mysterious at all. Not if you're following Planet Money, the NPR blog and podcast that's doing a bang-up job of explanatory journalism during this economic freefall.

I subscribe to the Planet Money podcast and occasionally catch the reports the team does on This American Life. I highly recommend that you do the same. Think that all the macro-economic jargon is hopelessly over your head? So did I, but they're explaining this stuff in terms that even an English major (c'est moi) can follow.

So what's the answer to the question? Well, says Planet Money, you're asking the wrong question.

Let's turn it around: When you buy a home and it goes up in value (ah, the good old days!) you have more money than you used to. But you don't generally ask, "Where'd this money come from?" You simply understand that your net worth has increased because your asset (the house) has appreciated.

So in a nutshell, it's not "money" that's been lost, it's value. Our homes, our pension accounts, our stocks or mutual funds have all declined in value. Of course, that loss in value doesn't translate into actual dollars lost unless we sell during this market downturn. (Which is why your financial adviser is probably telling your to 'stay the course' with your retirement funds.)

Does that make sense? If not, listen to Planet Money for a while and it will. I promise.

No Wiggle Room

In a flush economy, startup entrepreneurs can sometimes scrap and scrape their way into profitability even as they learn on the job and make rookie mistakes.

But in today's climate, a small business owner has to obsess about every penny spent. One of the areas with the greatest potential for hidden costs is inventory, says Bill Harrison, the guest on my Smart Answers podcast this week.

As a former small business owner himself, Bill has some great advice not only on inventory control but on pricing and customer service as well. Check it out.

Help From The Feds

My Smart Answers column today outlines some ways that government is reaching out to small business owners during this tough time.

Another must-read on Businessweek.com's Small Biz page today is Jason Calacanis's essay on failing startups. It's a long but riveting account of the tough choices an entrepreneur must make when a business is teetering on the edge. Calacanis - founder of the Silicon Alley Reporter - details the nitty-gritty with the verve and black humor that only a small business owner could love.

Stimulating Tax Impact

When is it possible to use "stimulating" and "tax" in the same post header? When I'm pointing to two recent columns discussing the effects of the fiscal stimulus legislation on small business taxes - that's when!

Both this week's Los Angeles Times "In Box" column and one of last month's Smart Answers columns discuss the small business provisions in the stimulus law. It's esoteric stuff, but important for entrepreneurs to understand if they file their own taxes (or ask their accountants about if they leave that complicated job to the pros).

Retail Center Blues

What happens to a mom-and-pop dry cleaner or frozen yogurt store when the Circuit City that anchors their shopping center goes out of business?

They don't have to just sweat bullets or chew fingernails: There are proactive steps that can be taken.

See my Smart Answers column to find out what they are.