Q) Jim: How can I be sure that I’ve gotten to heart of problem when I suspect debtor is being insincere, or even dishonest?

A) Use a technique called “”funneling.” It’s a method of questioning that begins on a broad level and becomes more specific as you progress. Narrow in and focus on response you’re getting until your suspicions are either confirmed or you can accept debtor’s excuses as genuine. A typical conversation might go something like this:

Having been in business through several recessions (I had gas stations in 70’s when we had rationing) and financially surviving all but one, I would like to share a few thoughts.

Sometimes we learn most from our failures. In 1989 I had spent most of decade building a thriving business in 2 retail stores. I did not foresee "no name" recession that occurred in 1990 at onset of Gulf War. I opened a third store in another city and used nearly all of my capital reserves in doing so. When war began, people cut back on spending. I experienced a 30% drop in sales almost overnight. With a negative cash flow and no cash reserves, it forced me to borrow money for operating capital. This began a "death spiral" which eventually cost me everything I had worked over 10 years to achieve.

Hindsight is 20/20, and looking back there were steps, if taken early, could have saved my business. If gangrene sets in, sometimes you have to cut off your arm to save your life! Hopefully, this recession has not caught you in "death spiral", but here are a few tips that I learned hard way.

EXPECT THE BEST, PREPARE FOR THE WORST!!

Conserve and preserve some of your capital! Set aside at least 5-10% of your daily revenue into a separate account to be used as a contingency or emergency fund.