Cheryl Rae owns a beauty salon and supply shop called Scarcella's in French Valley, Calif., and over the past few months she's found it harder and harder to pay the bills.

Consumers are bypassing her salon-grade shampoos that can run upwards of $25 for cheaper drug store versions, she said, and many regulars aren't getting their hair cut as often.

Right now, she's a few months behind on her rent, and the bills just keep piling up.

"The economy has hit us hard," said Rae, and she wonders how much longer she'll be able to keep her doors open.

It turns out Rae is not alone. An increasing number of small business owners are having trouble paying bills, according to a new survey.

The poll, conducted by Discover Small Business Watch, found:

--Forty-four percent of small business owners have experienced cash flow issues over the last 90 days, up sharply from 38 percent in October. This is the category's highest rating since April 2008, when the same number of owners reported cash flow issues.

--Cash flow difficulties were most pronounced for small business owners whose primary customers are consumers: Forty-nine percent said they had cash flow issues in the past 90 days that caused them to hold off on paying some bills, while only 33 percent of owners who sell business-to-business expressed the same issue.

"Small businesses are continuing to feel pressure in this weakening economy," said Ryan Scully, director of Discover's business credit card, in a statement. "The number of owners having trouble paying their bills is the highest we've seen since April and more than half of owners are cutting back on their business development plans, which is an all-time high."

I asked Discover if they had any numbers on how many business owners are having trouble paying their credit card bills in particular, or whether late payments have risen. I also wanted to know if the company was doing anything to help out small firms during this tough economic time.

Discover spokesman Jon Drummond says the company does not release numbers on late payments.

As for help for small firms, the company "proactively identifies and calls customers who show the potential for financial distress in addition to assisting those who approach us directly for help," he said. If a customer is deemed "high risk," Discover stops sending them promotional offers; and they offer card holders different payment options.
 
And, he added, "for customers who do become delinquent, our customer assistance team works with them to try to bring their accounts current again."
 
Sometimes trouble paying bills is a function of small business owners not getting paid themselves.

A recent Intuit Billing Manager "Get Paid" survey found that the average small business owner loses close to $1,500 each month becasue of overdue payments or unpaid bills.

The survey also asked:

--With the current economic uncertainty, what key issues about your business keep you up at night?

Forty-two percent of respondents answered: Getting paid quickly (cash flow).

--Are you seeing an increase in overdue/no payments now compared to a year ago?

Thirty-three percent of respondents answered: Yes.

Unfortunately, the late payment of bills is only the beginning of a downward spiral for entrepreneurs like Rae.

"I have this dream that we're going to pull out of this economy, but we're not even making the rent," she lamented." There is no way for us to weather it."

And she gets angry when she sees the federal government bailing out huge corporations and doing little to help people like her.

"It just infuriates me because small business owners are getting kicked left, right and simple," she said.

Are you all infuriated? Are you able to pay the bills? Do you think small businesses also need a bailout?

The Wall Street Journal reported recently that the federal government is providing "up to $200 billion in financing to investors buying securities tied to student loans, car loans, credit-card debt and small-business loans."

Will that be enough?

The American economy is officialy in a recession. How can small business owners make sure their fears and anxieties don't affect their judgement? Robert Johnson, a licensed psychologist and organizational consultant with The Impact Group provides some advice on how entrepreneurs can keep their emotions from causing them to make bad business decisions.

In an effort to take their enterprise to the next level, small business owners often look to franchising or self-financing new locations. The owners of Zingerman's Deli in Ann Arbor, Michigan had other ideas. They consulted with their managers and came up with a creative growth strategy, creating a community of businesses with individual owners/partners. Each business is tied in to Zingerman's overall business strategy. See how innovative growth strategies can work for your small business.

Panelists

Simon Sinek, CEO & Founder of SinekPartners Corporation, and teaches graduate level marketing at Columbia University's Strategic Communications Program.

Kylie Sachs, Principal of Ascend Venture Group, a venture capital firm with a multi-stage investment focus.

Robert Walsh, Commissioner of the New York City Department of Small Business Services.

How To Succeed in Small Business: Holiday Cheap Gifts for Clients and Employees

Stacy London, co-host of TLC's "What Not To Wear" and a "Today" contributor, shows off some cheap gifts small business owners can give to their clients and employees.

Elevator Pitch

Jason Graham-Nye and and Kimberly Graham-Nye, Co-Founders of gDiapers, breathable natural "green" diapers that can be flushed, is looking for capital to increase production and expand marketing efforts. 

1. Informative email taglines

2. Scheduled follow up

3. Contribute to a blog

4. Create an affiliate program

5 .Consistent promotional materials

Source: Entrepreneur.com

Salesteamtools.com povides a variety of information to help you boost sales. You can find articles on topics such as how to effectively manage your sales team, and check out reviews of the latest sales software.

Before the election, a small business owner named Paul sent me an e-mail. He said he planned to immediately fire one of his two employees if Barack Obama won because he feared tax increases.

"Guess which one it might be?" he asked. "The one with the Obama bumper sticker and who voted for the tax increases, or the one who voted for no tax increase?"

His answer:

"Plain and simple – I will keep the one who wants my small business to be successful and not the one who's looking for a free ride on the Obama unemployed express," he wrote.

The way Paul saw it, Obama would usher in tax increases for business owners like him.

I've emailed Paul a few times since Obama was elected to find out if he plans to follow through on his promise, but I haven't heard back yet.

So I figured I'd put out a call to small business owners who bring in over $250,000 -- the figure Obama gave as the tax-no-tax threshold -- to find out if they had any plans to change business in any way once he takes office.

Here's a sampling of what I got:

One thing I plan on doing is deferring some business expenses until 2009 so that I can reduce my income tax liability under an Obama administration. That is, I'll show more profit this year, and show less profit next year.

--Scott Tucker, Tucker Marketing Systems, Inc.
 
As a small business owner of a successful ecommerce company that has been in business for 12 years, I do have concerns with the potential policies of Barack Obama towards small businesses. Specifically, I'm concerned with capital gains rates going up.

Capital gains rates are up to 15%. Accordingly, if Obama strongly suggests raising that rate to 20% or 25% that would create a strong financial incentive for small business owners who have been working hard to build up their businesses for many years to cash-out. Businesses will be immediately be worth less if capital gains taxes go up, as the future owners will have a smaller percentage of income to take home at the end of the year. In sum, the plans are to keep my company's books in order and update my company's business valuation using current national data regarding transactions in my industry, as well as closely watch interest rates, tax rates, discussions regarding capital gains rates, and explore all unsolicited interest from serious prospective buyers.

--Oren Milgram, StudentMarket.com Inc.

I'm not worried about higher taxes. If I make a lot of money, it probably means I can afford to pay higher taxes for the benefit of those who need the help!

I am actually pretty positive about the future of the economy, and just hired a full-time Creative Director to develop several new products I've had in mind, and reintroduce our best-selling game, Loaded Questions (over one million sold), in a new packaging
 
--Eric Poses, All Things Equal Inc.

Yes, we anticipate higher taxes. We've considered the facts and deliberately do not plan to change a darn thing as it relates to our business operations.

The way I see it, a tax on applies when you've successfully made a profit. We plan to be as financially successful as possible, tax or no tax.

--Victor Cheng, Bookmercial

Regarding taxes -- we are always on guard about shouldering a higher percentage of the tax burden. Who isn't? But when the economy turns around and we are continuing to grow our business, it will be a privilege to pay our share of taxes towards the betterment of America.

--Mitch Frankenberg, The Paw House Inns and Resorts? ?

How about you? Do you have any plans to change your business?

1. Freebies to valued clients

2. Reward programs

3. Client appreciation day

4. Free samples

5. Thank you notes

Source: National Federation of Independent Business

Myeasymailmaker.com is a new site that offers a number of direct mailing services. You can purchase name lists sorted by various demographics such as income or geography. The site can also help you get the word about promotions and help you design business cards.

In this turbulent economy, many small business owners are working together to survive. See how Nancy Cobb and Rosie Dole, owners of separate antique stores in Bradenton, Florida, are now sharing retail space to cut costs, and Lou Desiato and Robert Kolmus are using purchasing agreements for the raw materials needed for their respective eastern Pennsylvania-based wineries. Find out how sharing resources can help your business stay afloat.

Panelists

Erica Duignan-Minnihan, CEO of Minnihan Consulting, which provides advice and services to startups looking to raise capital.

Robert Levin, Founder and Editor-In-Chief of The New York Enterprise Report, a magazine that caters exclusively to the small business community.

Learning From the Pros

Mitchell Gold and Bob Williams launched their furniture brand in 1989 with the intention of providing sleek, high end furniture at a reasonable price. They now have locations in cities across the country. Find out the strategies that have helped them grow their business into a nationally recognized brand.

Elevator Pitch

Jeff Archambault pitches The Baby Butler to the panel. The Baby Butler is a hands free baby bottle holder that holds the bottle in a place with a velcro strap so the person holding the baby has free hands. Archambault is looking for capital to expand inventory, sustain a national marketing campaign, and increase his product line.

My mom owns a two family home but lately her tenant just can't seem to find the money to pay all the rent.

He's a residential contractor but times have been tough. His wife ran a small dance studio, but the economy put a crimp on her business too and she had to shut it down last year.

It's a tough situation for all involved, including my mom who loves her tenants but also needs the rent money.

This became even more apparent when the toilet in my mom's home overflowed causing major damage to the bathroom and the ceiling below. She needed the rent money to repair the damage.

What to do?

You guessed it. Barter.

The tenant agreed to do the repairs in exchange for some rent reprieve.

This isn't a new concept. Bartering has been around, well, forever.

I'll do this for you. You do this for me. Makes perfect sense.

And it makes even more sense in this economy where credit is tight and small businesses are struggling to stay afloat. They need new and creative ways to pay the bills.

It seems like many firms are getting the message.

According to the bartering industry group, the International Reciprocal Trade Association, bartering is up about 25 percent in just the last three to five months, and barter exchange companies are reporting membership records, according to the organization's Executive Director Ron Whitney.

Frank Moskowitz, the publisher of Buckeye Sports Bulletin, in Columbus, Ohio, has been part of a bartering network called International Monetary Systems since the early 1990s, and he recommends it for any small business.

He does direct bartering with a trophy company that exchanges their trophies for ad space in Moskowitz' publication. But what he loves most about being part of a bartering network is he can get services from firms that he has no direct exchange ties with.

"If someone wants to trade for ads in our paper and they sell toilet seats, and I don't need those, I get credit I can use to get my dry cleaning done, for example," he explained.

Frank Hoster, owner of Advance Printing & Graphics and also an IMS member, has been bartering for 18 years and barters with Moskowitz.

On the plus side, he notes, "you get business you normally wouldn't have gotten and you get great profit margins."

He's able to save $25,000 a year because he uses a courier service for his business through the network.

But on the down side, "you can't pay your taxes with it. You can't pay your employees with it, and you rarely can buy your raw materials with it," he said. 

And "the IRS treats it like real dollars," he added.

What's your take on bartering? Have you ever tried it? How did it work out?

1. Declare email bankruptcy
2. Schedule time to answer
3. Set up an autoresponder
4. Use the phone
5. Outsource it

Source: USAToday.com

The continuing economic problems may lead to one of the worst holiday shopping seasons in years. William Dunkelberg, Chief Economist for the National Federation of Independent Business, and Dan Butler of the National Retail Federation, discuss what small retailers can do to boost their sales during these difficult times.

In this economy, entrepreneurs have to look beyond traditional financing methods to grow their businesses. Amy and David Butler, co-owners of Art of the Midwest, a design studio which produces a variety of home furnishings, have financed their company without any funding from banks or outside investors. See how the Butlers have steadily grown by investing their profits back into the business, and learn how your small business can grow without traditional financing.

Panelists

Darren Hardy, Publisher and Editorial Director of Success Magazine.

Phil Town, personal finance expert and author of "Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week!"

Elevator Pitch

Julie Drochelman and Jeff Medolla, co-founders of Pocket Peelies, revolutionary blue-jeans with removable back pockets that kids can customize and trade. Pocket Peelies are currently available in eight Saks Fifth Avenue stores and numerous boutiques in the U.S. and Canada. They are looking for capital to solidify an overseas manufacturer and expand marketing efforts.

Jobvite.com provides recruitment services for small and medium-sized businesses. For a fee, you can set up an account with Jobvite, and the site will connect you with desirable applicants and post your openings in social networking sites.

One of Barack Obama's battle cries has been to encourage businesses to produce more in the good ol' U S of A.

That will be a good thing for shoppers like me who have been frustrated that hardly anything is made here anymore.

Whenever possible I try to buy U.S. made goods, and I've written in the past about trying to go totally domestic, but failing miserably.

Lately I've renewed my efforts because of all the scary product news coming out of China.

It hasn't been easy.

I've given up on finding an American-made shower curtain. They all seem to be made in China these days.

Shower curtains don't worry me as much as products my kids might eat or put into their mouths, like dental floss.

Yes folks, those plastic, disposable floss-holders in the shape of superheroes and princesses are now mostly made in China. I figured this out a while back when shopping at Target. After that I searched all the drug stores in town and found that there was nothing but Chinese-made flossers on offer.

After reading all the tainted milk stories from China I decided to go on to the Internet and find out if anyone made these floss holders in the United States, and eureka -- I found E-Z Floss in Palm Springs, Calif.

The company makes dental health products and one of their top sellers is "Mr. Flossman."

Not only are they made in a plant in nearby Ontario, Calif., owned by Microdyne Plastics Inc., these holders are also non-disposable. So I ordered a bunch at $2.50 a pop and sent some to my nieces and nephews. I had to contact the company directly because even though it has a Web site it doesn't have a shopping cart function.

It got me thinking why this tiny company was still paying premium prices to make this product in the United States.

So I called Dennis Naber, a partner at the 40-year-old business, and he told me the company never seriously considered having Mr. Floss made anywhere but in the U.S.

"The company never felt a need to do that," he said, adding that the mold to make Mr. Floss is very expensive and heavy, and the company likes being able to drive 70 miles to get to the plant that makes the flossers.

"It's about quality and patriotism," he said. "I would prefer to have it done it the States. It's better for our economy."

I can't help but feel Naber is a dying breed, so I figured I'd give props periodically to U.S. firms that make at least some of their products domestically.

So tell me if you own a company or know of one that still has products made here.

1. Website FAQ's answering common questions

2. Bank analysis statements

3. Strategic hiring

4. Limit meetings

5. Create boundaries between work and home

Source: Entrepreneur.com

In this economy, most small businesses can't afford to operate seasonally. See how Mark Newfield renovated his Iroquois Springs campground facility in upstate New York and has increased revenues by running a camp for kids in the summer, and holding off-site meetings and conferences for business and colleges the rest of the year. Find out how entrepreneurs can ensure their business will be busy all year long.

Panelists

Bob Phibbs, founder of The Retail Doctor, a consulting company specializing in retail strategies, and author of "You Can Compete: Double Sales Without Discounting."

Matthew J. Weiss, President of the New York Chapter of the Entrepreneurs' Organization, a global business organization that helps business owners learn and grow through peer-to-peer learning.

The Power Of Persuasion

Steve Martin, author of "Yes!: 50 Scientifically Proven Ways to Be Persuasive," provides unique tips on how to use testimonials to sell your product or service.

Elevator Pitch

Chris Badynee and Alan Eden, co-creators of the Bogdon Box Bass, a cardboard box acoustic/electric upright bass kit that assembles without power tools, are looking for capital to expand their marketing efforts, patent other products, and hire additional staff.

crowdspring.com connects business owners with creative talent. Buyers describe the project they need, such as a new logo or promotional materials, and then put their payment into an escrow account. Artists submit their project ideas, and the buyer chooses the best submission and rewards that artist with payment.