I am not guiltless when it comes to being rude to customers; but every time I find myself on the receiving end of rude customer service reps, I’m reminded why it’s important not to be rude to your customers, especially if you’re hoping they’re going to pay your way to that million dollar mansion.

Today I had to call Network Solutions about renewing one of my domains. I’ve been having trouble renewing domains online for a few months. As it turns out, I’ve been having this problem since switching to Firefox from Internet Explorer; but this was not discovered until today.

So, I called Network Solutions and had to deal with a rep named Rebecca. I explained my problem to Rebecca; and she proceeded to tell me a lot of nonsense that I knew had nothing to do with anything. At the end of the day I had to hang up, so fed up I was with dealing with her. She was not listening to what I was trying to tell her and kept on insisting that it was I who would not listen; that she has tried to explain to me that the reason I could not renew my domains was because I was not listed on the account as the primary account holder and needed to login with the primary account holder’s information. Mind you, I have had this account for 5 years. I am the only account holder and the information I used to login is the only information associated with my account; but Rebecca refused to understand this very simple point and kept insisting that I needed to login with the primary account holder’s information and then I would be able to renew my domain.

In any regard, after hanging up the phone I had to spend about 20 minutes on restoring my mental balance. I do have anxiety issues and any type of confrontation, however mild, makes my heart rate accelerate to a point where I cannot breathe properly. It took me 20 minutes to get to the point where I could chance to call back.

This time I explained my problem to a different individual. The first indication that I might get a different result was when the new rep was able to login to my account. For some reason, Rebecca couldn’t log in for the life of her. We spelled out the username. We spelled out the password; but Rebecca couldn’t get into the account, she claimed. This of course convinced her that there MUST be another way to login to the account using a different username and password that I wasn’t privy to for the obvious reason that the account wasn’t mine but someone else’s. She did not say this, but what else could one conclude? It could not have been that maybe she wasn’t entering the username correctly, or she wasn’t entering the password correctly, it had to be that I was making a mistake, I who have had this account since its inception in 1998, or it could be 1999, and have had no problems with it until recently. It could not have been Rebecca because Rebecca is the expert here and I’m just someone who knows nothing about anything.

Long story short, the new rep asked some key questions and we arrived at the point of having me check to see if I encountered the same problem using Internet Explorer. I did not encounter the same problem using Internet Explorer. It turns out the problem was Firefox, which makes sense because the problem did start in recent months, and I did start using firefox in recent months. Now, of course, I might have thought of that myself, but….

The point here is, everybody wins when you’re patient with your customers and try your best to help them, even if they come at you with a bit of an attitude; and I can admit that I began to get fed up with Rebecca and my tone might not have endeared me to her; but regardless of the tone your customer takes, they are paying you money; they are keeping you in business, and you should never belittle them, never patronize them, never insult them, and endeavor not to be impatient with them. Help them when they come to you seeking help. Always try to go above and beyond if you can because when you please people, they tell other people good things about you and your number of customers increases.

Obviously I’m just one individual and Network Solutions won’t feel any loss were I to take my business elsewhere; but if you’re not so big that you can afford to lose a single customer, abide by the rule that the customer is always right, even if they’re wrong. It will be more to your benefit than making your customer angry. I can tell you personal stories about making customers unhappy as I have not always been professional when dealing with difficult customers and I have paid the price.

Here is a copy of the letter I wrote to Network Solutions. It won’t make any difference, they’ll probably never read it and Rebecca will probably never be reprimanded as she deserves. I have the experience of being on both ends of customer service so I know well enough how we really feel about our more difficult customers, what we would really like to tell them, and what we say about them after they hang up the phone or leave the store. I have no expectations that anyone at Network Solutions will care one way or another about a lone unhappy customer one of their employees sent into a fit of anxiety; but I sent my letter of dissatisfaction nonetheless. It’s not my strongest writing; but I wrote it while still heated. Another lesson for you - always calm down first so you can think clearly when you need to make a point. The letter:

I called today to get assistance with renewing a domain that was about to expire. I ended up having to hang up after trying to get help from a tech assistant named Rebecca, and calling back to get assistance from someone else. I have been able to renew my domain with the help of the new assistant, and I would like to request that your tech assistant ‘Rebecca’ be notified that the reason I was unable to renew my domain online had nothing to do with her suggestions.

Rebecca was not helpful and was in fact patronizing in her approach to customer assistance. She did not listen to what the customer was trying to tell her and was therefore unable to provide any relevant assistance.

As I have been paying Network Solutions at the high rate of $35 per domain for five years for multiple domains I registered with your company despite being fully aware that many equally reputable companies sell domains at more than half the price charged by Network Solutions, I don’t believe I deserve to have my blood pressure and anxiety elevated trying to get competent assistance with renewing my domain. Until Rebecca I have had nothing but good experiences with Network Solutions. The individuals who’ve assisted me in the past have all been “patient” and “professional”. Above all, I think patience is key in dealing with customers, whether or not you think they are wrong. As it happens, in this case, Rebecca was wrong. Not the customer. Perhaps Rebecca needs to be reminded that happy customers keep her employed.

ENTREPRENEUR.COM - Think eBay is just for part-time sellers with too much clutter in their closets? Not anymore. In a few short years, these savvy sellers on eBay have gone from zero to millions of dollars in sales. Here’s how they built lucrative online businesses.

Todd McGohan, 42, and Tim Stallard, 36

Proshop Warehouse

Dayton, Ohio

eBay User ID: proshopwarehouse

2006 Sales: $7 million

Projected 2007 Sales: $7 million

eBay Business: Golf clubs and accessories

Fore: Todd McGohan started selling on eBay in 1999 with his wife, Stacey, 36. Their business, The Guildmark Group, specializes in high-end watches, jewelry, coins and fountain pens. It generated $1.5 million in revenue in 2006.

The online business has always done well, but in 2000, when McGohan spotted the opportunity to make some additional money by selling merchandise a local pro shop was liquidating, he jumped at the chance to enter a new market. "I love deals," he explains. After paying $4,400 for the inventory and selling it on eBay for $5,700, McGohan knew there was a market for golf equipment.

Work the Phones: But what McGohan needed was merchandise, so he and his business partner, Tim Stallard, began calling small golf shops and pro shops and asking to buy their excess inventory. The pair sold more used equipment than new at first but have since demonstrated enough volume to gain their own relationships with manufacturers. Now 75 percent of their stock consists of new clubs.

Today, Proshop Warehouse runs about 3,000 auctions weekly, with average purchases yielding $170. They also opened a retail location in 2006, which has allowed them to do business with manufacturers that were previously off-limits to the online-only venture, and they have added $500,000 in incremental revenue to their bottom line.

Such dramatic growth and expansion has been possible for the company because McGohan and Stallard invested in automation, going so far as to design their own auction management software to avoid the fees most commercial programs charge. Says McGohan, "Automation has been a lifesaver."  

Smart Tip: Always look for new suppliers and build strong relationships with them–these can lead to cheaper pricing. With margins getting slimmer in most industries, you need to buy your inventory for as little as possible in order to make a profit.

Corey Kossack, 23

Koss DVD

Tempe, Arizona

eBay User ID: kossdvd

2006 Sales: $1 million

Projected 2007 Sales: $3 million 

eBay Business: New DVDs, iPod accessories and video games  

Student of Opportunity: In 2004, Corey Kossack was a college sophomore doing some online shopping from his dorm room for a digital camera memory card. One of his stops was eBay to see if he could find a deal. Although he says he "always thought of eBay as a place for people to get rid of junk," he found someone selling hundreds of memory cards that day. This was clearly a businessperson, not an individual selling castoffs from their personal collection, and it changed Kossack’s thinking about eBay. He saw a business opportunity and wanted in.

Nichecraft: Recognizing the need to carve out his own niche, Kossack decided on DVDs. He reasoned that there are always new titles coming out, creating an ongoing demand for the product, and most DVDs are the same size and weight, which makes the process of packing and shipping them much simpler.  

However, "finding suppliers was difficult," he says. By calling major distributors from the study room in his dorm, Kossack eventually got his foot in the door. But he says the sales terms at the outset "weren’t very good," mainly because his sales volume was low.

Profit-focused: That soon changed as Koss DVD’s sales volume increased. In its first year in operation, the company sold $500,000 worth of DVDs. But what has kept the business on course has been Kossack’s focus on profitability, not sales. "Sales volume isn’t all that’s important," he says. "What’s really important is profit."  

While most businesses focus on the top line–sales–Kossack has paid equal attention to keeping costs down. One change to the company’s shipping process, replacing the bubble envelopes it had been using with a lightweight alternative, shaved 0.3 ounces off each package’s total weight and saved the company $10,000 in its first year.

From the start, Kossack has tracked each order’s profit margin carefully, taking note of all the factors affecting profitability to make constant improvements. But in 2006, recognizing how important such calculations could be for any eBay business, he paid another student to create software and used the new formulas to replace his manual calculations. Since then, he branded the software ProfitBuilder and is selling it commercially.

In addition to automating his profit tracking, Kossack has renegotiated deals with his suppliers based on his company’s track record of growth and success. He’s also expanded his product line, from 1,000 DVD titles to 10,000, and added video games and iPod accessories to his store. He says, "We’re becoming more of a superstore."

Smart Tip: Be sure to research your intended industry thoroughly to understand what margins are typical. You will be better armed to negotiate with suppliers, and you can confirm upfront that your business can be profitable.

Jennifer Canty, 35

Dyscern

Sterling, Virginia

eBay User ID: dyscern

2006 Sales: $6.8 million

Projected 2007 Sales: $12 million

eBay Business: Consumer electronics sales, including MP3 players, PDAs, cell phones, smartphones, digital cameras and portable DVD players

Back to Work: After having her first child, Jennifer Canty’s plan was to return to her old consulting job. But when it didn’t work out, she began looking for a new opportunity. Her husband and now business partner, Bill Frischling, 35, an avid buyer on eBay, suggested she take a look at selling on the site.

Using her analytical consulting skills and MBA training, Canty researched the market, developed a business plan, established performance metrics and focused on achieving profitability. Because she already knew something about consumer electronics, she opted for them as her niche. Their modest size meant shipping wouldn’t exceed each product’s value and they would be easy to store.

Since Canty started the company in 2003 from her basement, selling salvaged, end-of-life and customer-returned consumer electronics, her sales have at least doubled each year. Canty has moved the business into warehouse facilities and started selling new consumer electronics in addition to refurbished items. She lists approximately 1,000 units a week.

Canty believes Dyscern’s success came from her decision at the very beginning to run an eBay business, as opposed to a part-time resale shop. "eBay makes it easy to start up," she says, "but there is so much more to it if you want to start a full-time business."

Cost Cop: One area Canty pays very close attention to is cost control. She knows exactly what her costs are, outsources when it’s cost-effective and is vigilant about staying on the right side of eBay’s regulations. But Canty also knows that it often makes sense to let go and bring in outside help. Within six months of starting the business on eBay, for example, she brought in a partner, John Angerer, 35, to help manage the business, which now has 14 employees.

Smart Tip: Make sure you know your cost structure–how much each piece of the process is costing you, from product acquisition to eBay fees to salaries, shipping and overhead. Remember: To grow, you need to have positive cash flow.

Lanny Morton, 38, and Deena Morton, 39

Sportscloseouts.com

Glendale, Arizona

eBay User ID: sportscloseouts

2006 Sales: $3.3 million

Projected 2007 Sales: $4 million

eBay Business: General sporting goods

A New Playing Field: "Four and a half years ago, I was broke" and needed to make some money, says Lanny Morton, owner of Sportscloseouts.com. When his then-girlfriend, now wife, Deena, spotted some baseball bats on sale for $40 each, she encouraged Lanny to buy them to resell on eBay. Despite the fact that he had next to no experience with eBay, he knew the bats were worth more than $40. So he borrowed $800, bought 20 bats and listed them for sale on eBay. They quickly sold for a total of $1,300.

Recognizing the business’s potential, Deena wanted in, so she invested $1,300 and they bought more sporting equipment. It sold for $2,600. Reinvesting that money, they earned $4,000, then $6,000 and up. "We put every penny back into the business for the first year and a half" and ran the operation out of Deena’s house, Lanny says.

Today, the company typically runs 1,000 auctions a week, though during busy seasons, it increases to as many as 2,000 to 3,000. Everything from bats to water sports equipment to snowboards is available through Sportscloseouts.com, and items have an average selling price of $70.

Basic Training: What is currently a multimillion-dollar business started out small–very small. "We started with basic tools," Lanny says. "We wrote shipping labels [from] the floor of the living room with a pen," rather than printing them or using shipping software. Although the process was time-consuming, it was also low-cost, which was a priority in those days.

But eventually, the number of auctions exceeded the couple’s capabilities, and they began investing in people and resources to help them manage the business more efficiently. They call one such resource, ChannelAdvisor, a lifesaver. "We had a day right before Christmas when we had to ship 800 packages," a number much higher than the typical 150 to 200 packages a day, says Lanny. "In the old days, that would have taken us a week." But with 10 employees and their automation tools in place, getting the packages shipped was a breeze.

The couple attributes much of their success to taking care of their customers. "We do whatever it takes to make it right," says Lanny. In return, they earn loyalty from their customers–20 percent of whom are repeat buyers.

Smart Tip: Negotiate attractive shipping rates with major carriers to make it affordable for people overseas to buy from you. Approximately 20 percent of Sportscloseouts.com’s shipments head overseas, and the percentage is growing.

Ted Corriher, 43

Corriher Implement Co.

Newton, North Carolina

eBay User ID: tractor123

2006 Sales: $3.2 million on eBay

Projected 2007 Sales: $4.5 million on eBay

eBay Business: Farm equipment and accessories

Planting Seeds of Growth: "Once you list on eBay, your business is going to increase," says Ted Corriher, owner of Corriher Implement Co. It’s a foregone conclusion. And he should know–Corriher’s sales increased by a whopping 400 percent in three years through eBay.

Corriher Implement Co. was founded more than 60 years ago by Ted Corriher’s father, Charles, as a mule-trading business turned-farm equipment supplier. But it was Ted who took the business online in 1999.

Corriher first experienced eBay as a buyer, and he constantly marveled at the savings he found there: "I haven’t found anything that I couldn’t buy on eBay for less," he says. Impressed by the volume of buyers on eBay, he decided to give selling a try, putting New Holland agricultural and industrial equipment up for auction. The products were a hit. Within two years, eBay generated $1.2 million in sales for the company, and Corriher knew he was onto something.

The company currently lists about $200,000 worth of inventory at a time–everything from New Holland T-shirts to $50,000 new tractors.

Ready for the Harvest: Such growth does come with some challenges. "Be prepared for the increase," says Corriher. As sales rise, so will the number of e-mails and inquiries. Corriher’s e-mail volume has quadrupled in the past few years, and the company has had to add staff to be able to respond to customers in a timely manner.

Smart Tip: Representing your products accurately and completely will eliminate most potential problems. That means showing imperfections clearly in photos, mentioning any flaws and addressing customer questions before they come up.

You could be the next eBay millionaire. To learn how, see Entrepreneur magazine’s Startup Guide #1824, eBay Business, available at www.smallbizbooks.com; and visit our eBay Center online at .

Marcia Layton Turner writes regularly about small-business issues and is author of the award-winning book The Unofficial Guide to Starting a Small Business.

Copyright © 2007 Entrepreneur.com; all rights reserved. Reprinted with

permission from Entrepreneur.com.

What you need to know about setting up shop in a kiosk or cart

In a world dominated by big-box retailers, wanting to start an independent retail business probably feels a bit like David battling Goliath. "Why bother?" you think. "I’ll only get crushed." But these days, your small size could save your business. The big boxes have gotten so bloated. The good news is, retail spending has remained strong through the economic ups and downs (it totaled about $3.58 trillion in 2002, according to the U.S. Census Bureau).

While the costs of establishing a permanent retail location can be steep–you may spend up to $100,000 or more, with leases spanning three to 10 years–carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk. The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report, a quarterly trade publication for specialty retailers. And today, carts and kiosks are a $10 billion industry.

Flexibility is another advantage to staying small. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to "come in, try it out for a month, and if their product isn’t working, shift to a new product line or close up shop and move to a new location," Norins says.

These temporary locations can also work well for seasonal businesses that only need to be open for a limited time. For example, a specialty candy shop may open just before Christmas, remain open through Valentine’s Day, Easter and Mother’s Day, then close for the remainder of the year. The most popular site for a temporary operation is a busy mall, but many operators are also finding success in airports and other transportation facilities, at sporting events, and at other creative venues limited only by their imagination and ability to strike a deal with the property manager.

At the Mall of America, about 100 temporary tenants dazzle 40 million visitors a year. Cart rental rates are about $2,300 a month or 15 percent of monthly sales, whichever is greater. All temporary tenants must pay an initial fee of $1,500 in "key money," which pays for a store designer to design and build a cart with the right look.

Not interested in doing business in a mall? Street vendors and swap meet and fair concessionaires need to check with the city or county in which they want to do business for the regulations and specifications for the types of products, hours and displays that are allowed.

Starting Your Business

Options for starting a cart or kiosk business include opening a permanent location in a mall and leasing a cart; buying a cart to use for outdoor events or on street corners; or renting a cart short-term.

"The least expensive option is to rent [a cart] for a short time and see how it goes," says Bruce Stockberger, owner of Stockberger Marketing Associates, a North Palm Beach, Florida, small-business marketing firm specializing in cart, kiosk and Internet marketing. He says you’ll spend at least $600 per week for rent.

Whether you lease or buy a cart depends on your product and location. In malls, you generally lease a cart from mall management. The cost of leasing depends on the season and mall traffic volume but is usually at least $800 per month for space and a cart, and can get very high in a good location. Some malls charge a percentage of your sales in addition to monthly rent. Wally Rizza, owner of several carts in high-profile locations like the Irvine Spectrum Entertainment Center in Irvine, California, pays more than $2,000 per month for rent on each of his five carts.

"Kiosks start higher than carts, usually $9,000 or $10,000," says Denise Clark, author of From Dogs . . . To Riches: A Step-by-Step Guide to Start & Operate Your Own Mobile Cart Vending Business. Additional start-up costs depend on your merchandise. Items such as jewelry and crystal require a greater investment than, say, hot dogs.

Carts come in many sizes and styles with varying capabilities. There are carts for specific types of food, some with refrigerators, grills, steamers–even small ovens so you can bake on location. Determine your needs before ordering a cart, advises Jeffrey Morris, president of All A Cart Manufacturing Inc. in Columbus, Ohio, a cart design and manufacturing company. "List your products and the equipment required to make or display them," he says. "Also draw a simple layout of the cart to give [the manufacturer] an idea of size requirements."

Think versatility, especially with food. Don’t limit yourself to making one item, in case it doesn’t sell well and you have to switch gears. "What sells might be completely opposite from what you thought," says Gerardo Gonzalez, president of Gonzalez & Associates, a Piscataway, New Jersey, company that consults on mobile merchandising and food-service start-ups.

You can get a good deal on used carts, but Clark, who also sells custom-designed carts, urges caution. "People buy a cart they think is cute–only to find out they’ve purchased someone else’s headache," she says. "It ends up costing more to modify than to buy new."

Permanent or Temporary Location?

In cart sales, location is everything. Here’s your first decision: Do you want a permanent location or should you move from event to event?

With a permanent mall location, you don’t have to worry about purchasing a cart, moving it or battling bad weather (unless it’s an outdoor mall). You can build a clientele and predict how business will go and how much product you’ll need. On the downside, rent may rise. If mall sales slump, you’ll suffer. And if your product isn’t exclusive, a neighboring store could start offering the same merchandise.

There are many upsides to owning a mobile cart, says Clark, who does most of her business at special events. "You don’t have overhead like rent and utilities," she says, "and if sales are poor, you just move."

Focusing on Your Target Audience

Choosing a location really comes down to one key element: "It starts with identifying who your target customer is. You want to locate close to where those customers are," says Howard Van Auken, academic director for the Pappajohn Center for Entrepreneurship at Iowa State University in Ames.

Thinking about her target customers worked for Diane Flannery, a Ben & Jerry’s franchisee as well as CEO of Juma Ventures, a San Francisco organization that finds employment for inner-city kids. "When we started [with Ben & Jerry’s] eight years ago, we were trying to find different venues where we could sell ice cream," she says. "We figured young people love baseball and ice cream, so the ballpark seemed like a good fit."

Once you’ve found your target customers, Van Auken says, "visit those areas and see what the traffic pattern is." In addition, according to Van Auken, you need to check with the property managers of your target location regarding such issues as product approval and display issues, security, operating costs, cash flow, staffing and lease length. (For a mall, you’ll want to speak with mall management in charge of carts and kiosks. For a public place, contact the city or county to see if a cart is allowed and what permits are required. In a professional office building, contact building management.)

Susie Grant, specialty leasing manager for the Galleria at South Bay in Redondo Beach, California, also has a list of questions you’ll need to consider:

• What type of storage is available? While the Galleria’s kiosks do have some storage space, tenants can buy more at an additional charge.
• Do you plan on leasing during the holidays? Rent goes up considerably during that time.
• How long a lease do you want to sign? Grant offers agreements that last anywhere from a month to a year.

After you’ve balanced out cost issues and decided on lease length, then it’s time to find great staffers and set a move-in date. "[Location] is always based on availability," Grant says. "[Kiosk owners] may have something in mind that’s not available at the time they’re coming into the mall."

You’ll also need to obtain a business license, and if you haul your cart like a trailer, you must get a license from the Department of Motor Vehicles. If you serve food, you’ll need a permit from the Department of Health, which requires a specific amount of training in food preparation and handling. Malls often already have the carts permitted and insured.

While considering all these issues, one of the smartest things you can do is trust your instincts. "Go with your gut," Grant says. "If you have a good feeling about a location, it’s probably going to be a pretty good place for you to start."

Make No Mistake

Beginning retailers make a lot of mistakes. Here are five of the biggest:

1. Not doing a reality check. Do you have the temperament it takes to succeed in retail? "One of the biggest mistakes people make is thinking that retailing is going to be one way, and their experience turns out to be very different," says Daniel Butler, vice president of retail operations for the National Retail Federation in Washington, DC. "They’re not realistic about the challenges." Retail is a lifestyle choice. Can you hack it? Butler suggests working part time in retail for a few months to find out before you start your business.
2. Failing to research. Surprisingly, many beginning retailers don’t develop a business plan or a marketing plan. "When someone comes to me and says ‘This is the research we’ve done, this is why we feel this product will sell and why we’ll be successful in this location,’ it gives me a greater comfort level [in talking further]," says Courtney Lackey, a general manager with Jones Lang LaSalle, a property management leasing company that manages rental properties.
3. Creating clutter. In retail, you’re branding from day one. If your product displays have no rhyme or reason, customers have no reason to stop and shop. "The biggest mistake a cart or kiosk retailer can make is putting [out] too much merchandise," Lackey says. "Something that’s well-displayed, colorful and catches your eye attracts customers."
4. Competing with big-box retailers. Face it, as an independent retailer you’ll never beat WalMart on price. But a lot of small retailers fall into the price trap of trying to compete with the big boys–a big mistake, says Bob Phibbs, a retail consultant in Long Beach, California. Instead, focus on your edge as a small retailer: customer service and a unique consumer experience.
5. Choosing the wrong location. The rental rate may be great, but if the location doesn’t draw people, you might be in trouble even if your product is good. Where are shoppers seeking your type of product going? What types of big-box retailers complement your product and will drive traffic your way? One no-cost way to find out is by sitting in a mall and watching the traffic flow. "If you decide you want upscale people, look at where they’re already shopping and how you’d get that market," Phibbs says. "Know all these things {before} you sign leases."

Rules and Regulations

With shopping center leases, you’re customarily charged for maintenance of common areas and for the mall’s marketing efforts. Find out what the mall’s plans are for any structural alterations or remodeling, resurfacing the parking lots, or replacing the roof. These can be devastating assessments for a young business. Requirements for hours and days of operation, employee parking restrictions, participation in community service events, gift certificate and loyalty programs, and storefront appearance may not fit into your business plan or capabilities. Make sure you’ll be capable of conforming to these requirements.

Sources: Entrepreneur magazine and Start Your Own Business: The Only Startup Book You’ll Ever Need.

Copyright © 2007 Entrepreneur.com; all rights reserved. Reprinted with

permission from Entrepreneur.com.

[This article reprinted with permission from entrepreneur.com] - Most surveys of entrepreneurs show that credit cards are among the most popular sources of startup financing. The Pioneer Institute, for example, found that loans from relatives and borrowing against credit cards were the two most common financing techniques used by startups with less than five employees. Despite this high rate of usage, the terms of credit-card financing are poorly understood. How many entrepreneurs take the time to read the card issuer’s Terms of Use when they respond to a new credit-card offer in the mail? This month’s column provides some guidance to entrepreneurs who plan to use credit-card debt as a financing technique and wish to understand the implications of its personal guarantee.

Most entrepreneurs shudder when faced with signing a personal guarantee for a business credit card for the first time. I’ve never really understood how banks can market a product as a "business line of credit" when it’s really a personal line of credit. However, since the vast majority of businesses in the country are sole proprietorships, the difference between personal credit and business credit is murky from a bank’s perspective. Unless your business is incorporated, you’re the de facto guarantor of all business debts. So if your business has a slow sales quarter and you fall behind on your credit-card payments, your personal credit rating and your personal ability to borrow are at risk. (For more information on how to build your business’s credit score, read "Do You Need Excellent Credit to Start a Business?.")

Even if your business is incorporated, your bank or credit-card issuer may still require you to guarantee the business line of credit. In practice, most banks require shareholders with significant ownership in corporations to guarantee business lines of credit–typically owners with more than a 25-percent stake are required to sign guarantee forms when credit lines are more than $5,000. Moreover, most guarantee forms require joint and several liabilities, implying that all guarantors are responsible for the whole amount of the debt, even if they’re not full owners of the business. The guarantors can be sued individually or all together. (This tends to vary from state to state, so check with your attorney for details.)

If you’re attracting new partners to your business, be sure to include a provision in the partnership agreement that commits them to accept a personal guarantee on all existing business debt. In many states, new partners aren’t automatically responsible for previous debts, so this issue must be addressed specifically. The goal is to spread the liability as widely as possible to reduce the risk to any one individual.

Keep in mind that if you’re establishing a credit line with a community bank or local small-business lender, there may be some room for negotiation. For example, it’s possible to request that certain personal assets be excluded from the guarantee or that the guaranteed percentage of the loan declines as the business matures or surpasses a certain net-worth threshold. Private loans from relatives and other business associates are also subject to negotiation. However, for credit-card issuers, the offer for business credit is usually a take-it-or-leave-it proposition–and you must accept the personal guarantee if you want the card.

For small businesses struggling to find funding, borrowing against a credit card can be an attractive–if not the only–option. Plunging further into credit-card debt is a scary proposition, but for many the outcome has been rewarding. If you feel using a credit card to fund all or part of your business is the best option for you, be sure to read the fine print before responding to your next credit-card offer in the mail. Understanding the risks before you accept the offer can save you a lot of financial pain in the future.

As mentioned previously, I am reading T. Harv Eker’s "Secrets of The Millionaire Mind" along with some other money books, not because I think any of these books will solve my own money problems but because I want to read as many different books about money as possible in order to work on reprogramming myself. I concluded well before reading any of these books that I have spent a lifetime being programmed to think certain thoughts about money that subconsciously work to defeat any efforts I might make towards pursuing financial freedom. There are always voices in my head telling me things like, you don’t know anything, quit while you’re ahead, you’ve got nothing to offer anybody, you’re a joke, you’re not good enough to clean a condo in Manhattan much less to live in one, this is what you deserve in life to always be struggling to get your bills paid; to be poor is your reality now and to be poor will always be your reality and that’s just the way it is.

I figured the same way I programmed my own mind, or allowed it to be programmed, to think thoughts that result in my own defeat, I can fill my mind with new thoughts and ideas designed to negate all the statements mentioned above, so that instead of having voices in my head discouraging me, the voices will cheer me on to victory.

Interestingly, T. Harv Eker’s book talks about just this thing, how people sabotage themselves usually without realizing they’re responsible for their own financial failures. The concept isn’t profound by any means. In life every individual is responsible for his or her own success or failure. But it’s easy to fail to recognize how you undermine your own efforts because of fear and doubt and other psychological elements that play havoc with your thoughts.

While it is an interesting read I will admit I find the book a bit fluffy, which is to say, the examples it contains of how attending the Millionaire Mind Seminar changed people’s lives, how some people were so grateful for Eker’s help in opening their eyes to the truth about their "financial blueprint" and helping them to see how they were self-sabotaging when it comes to their money due to experiences in their childhood that they broke down crying as they thanked him, seem a bit excessive and unnecessary to me. It’s really not that hard to make a connection between one’s childhood and past experiences with any aspect of one’s adult life. It’s not the kind of thing that would constitute an awakening, coming to the realization that you spend money carelessly because you grew up either watching a parent or some other parental figure doing the same, or because you grew up in a household where you were never able to get anything you wanted because your parents were saving every penny for a rainy day; so once you grew up and had your own money, you went wild spending, not wanting to be like your parents.

The most valuable message contained in the book is the message that you’re not doomed by your bad habits when it comes to money because bad habits can be broken.

I don’t necessarily care for those parts of the book where Eker instructs the reader to place their hand over their heart and make specific declarations, and place their hand on their forehead and repeat, "I have a millionaire mind". But it’s all part of re-programming yourself I guess. I can roll my eyes at the thought of people actually following those instructions, but when you think about it, all he’s doing essentially is inviting the reader to be conscious about his or her own programming. The reality is, we’re being programmed 24/7/365. We might not be sitting on a hypnotists couch watching some object swinging to and fro as the hypnotist tells us, "You are getting sleepy. Your eyes are shutting down…", but in some way we get programmed every day to believe something that we’ll argue righteously is our own thought shaped from our own beliefs; but in reality, few of the thoughts in most people’s mind arrive there as a result of philosophical reasoning. Most people’s beliefs are programmed into their mind. So if you can program yourself to believe something that could potentially better your life, why object because you feel embarrassed to put your hand on your forehead and tell yourself aloud, "I have a millionaire mind"? If you can make yourself believe that you have a millionaire mind by programming that thought into your brain, would it be such a bad thing to believe compared with believing you’re a loser and you have nothing to offer the world, and you’ll never amount to anything, and you’ll never have a dime to your name because you don’t deserve anything?