It’s not impossible to get your business out of debt and heading towards profitability. Others have done it and you can too.

Facing bankruptcy can be a terrifying experience for a franchisee or small business owner. But it’s not uncommon - and it’s not hopeless either. Not everyone comes back from the brink, but Jeff McKeown is one entrepreneur who did. After four years in the staffing industry, he decided to open his own Express Personnel franchise in Racine, Wis. in 2000 at the age of 26.

In order to put the required $28,000 down, McKeown and his wife borrowed $15,000 and cashed out their 401(k)s and combined savings accounts to come up with the difference. Eager to get his business off the ground, McKeown said he accepted any and all clients, even those with bad credit and iffy documentation. He also felt that to compete, he needed to have the lowest price in town so he kept very small margins.

“Many clients did not pay their bills and several declared bankruptcy with huge payments to me outstanding,” McKeown explained.

By 2003 he owed the franchisor $120,000 and had maxed out all of his credit cards. Express Personnel’s corporate office even sent McKeown a 10-day letter that said the company planned take back the franchise.

That’s when he realized he was in trouble, McKeown said. So with the help of a consultant, he fired 30 percent of his customers, raised prices, and established minimum gross margins and strict credit terms. The business began to grow and by July 2006 he had paid off the majority of his debt. Last year, McKeown says he earned about $160,000 to $170,000 and is expecting to net $400,000 to $500,000 in 2007.

Climbing out of debt

If a franchisee or small business owner is nearing bankruptcy then “either their revenue is short or their expenses are too darn high, but usually it’s both,” according to Jeff Elgin, CEO of Minn.-based FranChoice, a franchise consulting firm.

Elgin suggests taking a good hard look at the expenses for starters, and making sure that all of them are absolutely necessary. “Take away the credit cards,” he said.

For franchisees, “usually, the fundamental issue is that they’re not executing the system,” Elgin said. And if it’s a good franchise company, then it has a proven and reliable system. “If you execute it, you will succeed,” he says. People just need to get “back to the basics of blocking and tackling.”

Indeed, many franchisors have consultants on staff tasked with helping franchisees grow their businesses.

“I thought I knew it all,” McKeown said. He now advises other young entrepreneurs to find a mentor or expert who can offer support and business advice.

By Jessica Dickler, CNNMoney.com staff writer

Looking to bring in new business? Then you’re probably on the watch for government contracts coming up to bid. If you’re not, you should be.

Together, federal, state and local governments buy over a $1 trillion dollars in goods and services each year. A not-insignificant amount of that money gets funneled into multimillion-dollar constructions projects. But other federal, state, county, city and town funds get earmarked for smaller projects - everything from website development to brake parts, motivational speakers, pre-printed plastic bags, and alfalfa. Some of that money could be yours if you pursue and win government contracts or subcontracting work from the companies that win big contract awards.

Web sites you may find useful:

1. www.fedbizopps.gov
2. www.onvia.com
3. www.findrfp.com
4. The Dodge Report

Read this very useful article at Business Know How.

My baking company is growing incredibly fast, and I often feel I could use a little advice. How can I form an advisory board? -Stephanie Vandegrift, Stephanie’s Premium Bakery, Dallas

Dear Stephanie: “Start with a list of experts you can call on individually,” says Dorothy Adams, a board member of the Stamford chapter of the Connecticut Venture Group (cvg.org), who has served on several advisory boards.

To tackle strategic questions such as growth, someone with investment-banking expertise would be helpful. A fellow business owner whose marketing savvy you admire might be another smart choice. Explain that you’d like to ask them for advice now and then. They’ll probably be flattered.

“No payment is really expected,” she says. “It’s a nice idea to offer them payment in kind. You could thank your advisors with cookies.” You may also want to check out the Alternative Board-TAB (TABSanAntonio.com). It brings the leaders of non-competing businesses together to exchange advice.

FSB Magazine

Combining marriage and business is not an endeavor to be taken lightly. It requires serious consideration and answers to some tough questions. Here are 10 tips for running a successful home-based business with your spouse:

1. Determine if you can work side by side.
2. Discuss your goals.
3. Write a business plan and solicit feedback.
4. Define each person’s role.
5. Keep the lines of communication open.
6. Be circumspect when talking with clients.
7. Form a united front.
8. Set firm boundaries and honor them.
9. Hope for the best, but plan for the worst.
10. Don’t deal with family matters during business hours.

AllBusiness.com

A new website and media campaign are encouraging children to use their imagination to come up with technological innovations of the future.

The U.S. Patent and Trademark Office is working with the Advertising Council and the National Inventors Hall of Fame in launching the new initiative InventNow.

The program targets kids between 8 and 11 years old. On the program’s website, children can upload their design ideas and share inventions with peers through message boards.

The site also encourages young inventors to protect their ideas by learning about copyrights, trademarks and patents.

Entrepreneur Daily

The companies will waive the early termination fee if you die. Pretending to be dead, however, does not work well as a way to break a contract. Sprint Nextel, Verizon and Cingular, for example, may ask for a death certificate. T-Mobile says it does not. “They want to take people at their word,�? said Graham Crow, a spokesman for the company.

Joining the military can sometimes work to break a contract if you are going to be stationed overseas. Sometimes, though, the company will suspend the service for the duration of active duty, which is not a great deal. Upon returning home, you would still be stuck with the remaining period of the contract and a much older phone. Buying a new phone would only extend the contract further.

Next to death, moving to a place where your phone company does not have service may not seem so draconian. Each company provides maps on its Web site or at its stores that show the general service area, so you can easily figure that out. But companies will ask for proof of the new address. The T-Mobile spokesman warns that it has to be a legitimate address, and post office boxes will not work.

There is an intriguing escape clause in contracts with phone companies that offer “roaming” services, though it is intended to give the carrier a way out. When a cellphone is used outside the provider’s network, calls are routed through another company’s network. The consumer pays a monthly fee for this service, which the carrier uses to pay the other phone companies to handle those calls.

Roam too much and your phone company starts losing money. Find a place where your phone goes into roaming mode and make at least half your calls from there. Every carrier said they would cancel the contract, though it might take them a month or two to notice.

Times

Number 5: Your client mistakes your daily rate for an hourly one.

Number 4: You’ve won every job you’ve ever pitched for.

Number 3: New clients are always asking what “the catch” is.

Number 2: You never run out of work, yet you are subsisting on beans and ramen noodles.

Number 1 sign you may be charging too little: Companies are calling from India wanting to outsource their work to you.

freelanceswitch.com