I was surprised to realize that many businesses, especially in the tech sector, learned from the mistakes of their ancestors. It has been this resilience that prompted me to put together a short list of ways small businesses can survive the current crisis - and even come out on top at the end.

1. Cash is King - Regardless of the size of your businesses, cash is going to be king over the next 18-36 months. Up to even a few weeks ago you could pretty much count on your local bank giving you a small business loan or being approved for a business-use credit card. Unfortunately, the liquidity of the market has “thickened” dramatically and has made those opportunities shrink to almost nothing. You’ll no longer be able to rely on loans and credit to get you through the month. From now on… cash should be your #1 priority.

2. Don’t Focus on Growth - This sounds like bad advice for any small business owner, but the truth is that many businesses are going to continue along the same growth pattern as before and find themselves beat to hell by the time they emerge from this crisis. This is the time when you need to hunker down and just wait out the storm. This will benefit you not only in the short term by ensuring you don’t go bankrupt, but will also put you in the perfect position to make strategic growth decisions after the crisis is over. For example, by keeping you expenses down and your cash account padded, you will be in a position to spend quickly right out of the gate - purchasing your competition or just beating them to key customers - because you have saved for what I like to call the “sunny” day.

3. Focus on Value - Since you’ll be cutting back on expenses, spend time on the things that don’t cost that much money but add value to your business. Instead of spending $10k replacing an old machine, spend $100 in phone charges to re-connect with your customers, or improve customer service. Invent new ways to add value to current products without spending a ton of money. That investment of time and energy will pay for itself 10x.

4. Collect - One of the things you can do to add value to your business and increase cash flow is by collecting on your accounts receivable. If there was ever a time to go after those delinquent customers… now is the time. If you don’t have an invoicing system in place there are tons of free and fee-based services out there - from PayPal to FreshBooks. You can even use Excel as long as you are actively trying to collect that cash.

5. Don’t Give in to Hoarding - During this time when “cash is king” you should avoid buying in bulk or otherwise stockpiling supplies or inventories. Although the parable of the ant and grasshopper might come to mind, now is not the time to be hoarding. That extra spending drives expenses up, depletes your cash reserve, and at the end of the day might be worth nothing. What good is a pallet of copy paper at a discount if you don’t have a business capable of using it. You will always be able to buy these items later even if you pass up a small discount now. That “savings” could prove disastrous to your cash flows.

6. Leverage Technology - There are tons of websites, web services, and other technologies that can help save you money. For example, trade in your $600 flight and $400 hotel for that sales trip to Chicago for an online meeting service instead. These days you can share a presentation, hold a conference call, or even converse via webcam - with nothing but a DSL modem and $50 a month for the services. You can also step up efforts to find better prices on products or services you normally use - by simply performing a simple Google search. Buying you your widgets from ABC Company for the past 5 years shouldn’t prevent you from searching for XYZ Corp who is offering the same widgets at 50% off.

Advertisement: Payday Loans Online fast, friendly, convenient.

And to be quite honest, I’m not sure who to believe. The republicans are using the issue to push for more drilling. The democrats are using the issue to push for energy policy reform and investments in “clean tech.” But the truth is buried so far beneath politics, lies, and misdirection that it’s impossible for you and I to find the truth.

It’s not a blip, said Marilyn Brown, professor of energy policy at Georgia Tech, citing data showing surging transit ridership, dropping sales of sport-utility vehicles and sharply increased demand for gas-efficient vehicles. I think the difference between now and 1979, when prices were comparable when you adjust for inflation, is there’s a sense of sustained pain. There’s a sense that the era of cheap energy is a thing of the past.

However, as the prices have continued to climb it seems to have had an effect. USA Today is reporting that Americans drove 22 billion fewer miles from November through April than during the same period in 2006-07, the biggest such drop since the Iranian revolution led to gasoline supply shortages in 1979-80. The decline in total miles traveled, though only 1%, means that many drivers are cutting back far more because the number of drivers and vehicles grows by 1% to 2% a year.

But I suppose my question is: if we’re driving less and more people are buying fuel-efficient cars doesn’t that mean that demand for gas is lower? And if demand for gas is lower, should the market respond by decreasing prices? The fact that the market hasn’t kicked in makes me suspicious that other forces are at work here. And something tells me they’re working to make a buck from you and me.

Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee.

What does this mean for you and me?

If you’ve ever sold your old iPod on eBay, chances are you won’t be affected since you’ll be getting only a fraction of what you originally paid for it and the income isn’t taxable. However, if you’re one of thousand of eBay sellers and other small business owners who accept PayPal or any other electronic form of payment… that information could be now reported to the IRS.

Of course eBay sellers and small business owners should have been paying taxes on this income all along, but the fact is… they haven’t. For example, if you make money online using Google Adsense, Google isn’t required to report your income to the government until you’ve earned over $600. And since the income isn’t reported, most people don’t report it as income on their 1040. In fact, the government estimates that this bill will bring in an additional $9.802 billion over ten years.

Whether you report your small business income or not, this bill could be an invasion on everyone’s privacy. If you’re concerned, be sure to write your representative.

Two years ago, Todd Davis, the founder of LifeLock, decided to plaster his Social Security number wherever he could get ad space. For a fee of about $10 a month, LifeLock offers what it calls a “proven solution” that prevents its customers from becoming victims of identity theft and fraud. I wrote about whether a solution like this is worth the money a few weeks ago (Is ID Theft Protection Necessary)… and apparently it’s not.

One man in Texas has already succeeded in getting a payday loan in Davis’ name. However, when asked about the breach Davis stressed that his service does not guarantee that your I.D. won’t be stolen. Rather, it aims to reduce the likelihood that your I.D. is stolen, and if it is, LifeLock promises to fix the problem.

But that’s not the real problem. LifeLock’s current problem is dealing with lawsuits of up to 105 of people who now claim that LifeLock didn’t live up to its advertising and have suffered at the hands of identity thieves.

So what can you do to prevent 83 people from trying to access your personal information? The answer is not LifeLock. The answer, as of today, does not involve only one approach. You need to be active in monitoring your own credit, and perhaps combine your own efforts with a service such as LifeLock… to help you with the monotonous lifting. Take a read through Is ID Theft Protection Necessary and try and follow the suggestions I’ve made. Monitoring your own credit, placing freezes on your credit, and many other “tricks” can keep you one step ahead of the game.

I especially recommend reading #10 - Teach them about impulse buying and #2 - Teach them to save money for goals.

For those of you that don’t know, a Flexible Spending Account allows an employee to set aside pre-tax dollars to pay for “qualified” expenses that usually include health care and/or dependent care. I know what you’re asking… Isn’t that why you sign up for health insurance?

A FSA goes above and beyond your typical health care plan by helping you pay for everything your insurance company doesn’t. All those $10 co-pays, deductibles, and prescription drugs can be paid for using pre-tax dollars. Many plans also allow you to pay for vision, dental, and even over-the-counter medication using your FSA!

The plan typically works by allowing you to elect a certain amount to be deducted from your paycheck, before taxes, each month (up to $5,000 per year). As you spend money on plan-covered items, you simply submit a claim for a refund which is paid from your pre-funded plan balance. In recent years, many plans have included a FSA debit card which allows you to directly pay for your medical expenses from your plan balance, without the hassle of submitting refund claims.

But a Flexible Spending Account is not without it’s dangers. One major drawback is that the money must be spent within the coverage period. This coverage period is usually defined as the period that you are covered under the cafeteria plan during the “plan year”. Any money that is left unspent at the end of the coverage period is forfeited back to the company; this is commonly known as the “use it or lose it” rule. However, most plans now allow you to spend any remaining money at the end of the year on non-prescription drugs or medical supplies. So just run to Costco and stock up on Tylenol and Band-Aids!

A second requirement is that all applications for refunds must be made by a date defined by the plan. If funds are forfeited, this does not eliminate the requirement to pay taxes on these funds if such taxes are required. For example, if a single person elects to withhold $5,000 for child care expenses and gets married to a non-working spouse, the $5,000 would become taxable. If this person did not submit claims by the required date, the $5,000 would be forfeited but taxes would still be owed on the amount. (Re-read that last sentence. $5,000 would be forfeited to “the company” and the person forfeiting it still pays taxes on it.)

But the main advantage of a FSA is the tax savings. An FSA allows money to be deducted from an employee’s paycheck pre-tax and then spent on qualified expenses.

For an example of potential tax savings associated with a flexible spending account, a person in the 28% Federal marginal tax bracket and an example 4% state tax (along with FICA taxes of typically 7.65%, for a total tax of almost 40%), could deduct $2,000 and put that money into an FSA for health care. This would result in almost $800 in tax savings. There’s a great little FSA benefits calculator at http://www.ebsbenefits.com/members/fsa_calc.htm#taxsav that will allow help you to estimate your yearly medical expenses, and calculate the potential tax savings from enrolling in an FSA.

So the moral of the story is… if your employer offers a FSA, I would highly recommend enrolling. If your employer doesn’t, then request that they do. Similar to my thoughts on enrolling in your employer’s 401(k) plan, there’s no reason you should be passing up this “free money.” You pay for medical expenses each year, so why not save money while doing it?

If you’re looking for a home-based business where you might actually make money, Yahoo Finance has a list of the Top 25 Home-Based Business ideas, including Yoga Instructor, Accounting, Web Design, Gift Baskets, and Computer Repair.

I realize this is a blanket statement, but apparently I’m not the only one who has seen this trend. Jeff Zaslow at the WSJ recently wrote an articled entitled “Blame It on Mr. Rogers” where he attributed this sense of entitlement to Mr. Rogers and his habit of calling everyone “special.” The article wasn’t written literally - and certainly wasn’t a jab at Mr. Rogers - but the article created quite a stir and over 1,000 people contacted him about it.

So Mr. Zaslow followed up his Mr. Rogers article with another one called “The Entitlement Epidemic: Who’s Really to Blame.” Instead of blaming only one single dead celebrity (yes, I’m using that term loosely) he lists several reasons why children and young adults today seem to have the innate sense of entitlement, including:

• Indulgent Parenting
• Consumer Culture
• The Self Esteem Movement

I won’t take away from Zaslow’s article, but I will share my favorite quote.

Susan Lewis, who teaches at University of Maryland Eastern Shore, calls the cellphone “the world’s longest umbilical cord.” At her school, when students don’t like their grades, some come up after class, hand over their cellphones and say, “My mom wants to talk to you.”

If you’re just starting out and want to get a handle on your finances, Expensr, might be perfect for you. It’s biggest feature is its price ($0) but the web-based application is very good at what it does. It’s no quicken, but it allows you to track spending, projected spending, and create budgets.

You can upload your bank account statements in a .ofx format, or manually enter transactions as you would in your checkbook register. But a nice security feature that you won’t find on similar sites is the fact that you upload your bank statements manually. You don’t have to provide your bank username and pasword (as with some other finance products). OFX files do contain your bank account number, but not your bank username and password. Expensr does not store the OFX file after parsing it, only the transactions in it (name, date, amount).

One of the more interesting features (and my favorite) of Expensr is its social network. You can anonymously compare your spending against others. This means you get to see the aggregated data of the users of a particular tag. Want to compare your rent with other twenty-somethings? You might find your spending less on groceries that many of your peers.

As I said before, Expensr isn’t the world’s most sophisticated finance application, but it’s a very solid web-based finance app. If you’ve been putting off tackling your finances… this is a good place to start!

For those of you who may not know, the “Latte Factor” refers to the little things you can do to save money. If you ever turn on a morning news show where the topic is personal finance, you are guaranteed to find someone talking about this “Latte Factor.” They’ll talk about how if you keep on driving by Starbucks on the way to work (without stopping inside) then you’ll save about $4 a day which saves you about $1,000 a year! And of course everyone says “ooooh” and “aahhhh” because who doesn’t want to save $1,000 a year.

But the problem is, for most people, skipping your morning cup of coffee is not going to get you out of debt or help you save for a house. That’s right, I said it.

I’ve always had a problem with the whole “Latte Factor” phenomenon (I’m even tired of typing “Latte Factor”), but it didn’t really hit home until this week. While my family was visiting I walked in on my mom who was watching one of the aforementioned television segments on personal finance. I saw her furiously taking notes on “How to Save $5,000 Today!” Most of the advice was to skip the little things, while the rest of the advice was just plain ridiculous (who’s really going to give up their cell phone?). I laughed and told my mom to stop writing stuff down. “You want to know how to save $5,000 a year?” I asked. “Sure, how?” she replied.

I began to explain the concept of the “Latte Factor” and why it just doesn’t work. The biggest problem with the Latte Factor is that you are depriving yourself of some of the only things that make you happy. For some it’s a morning coffee. For me it’s dinner with my wife on the weekend. For others it’s that weekly trip to ColdStone for some cake batter ice cream. Whatever your “Latte” is, it makes you happy and brings joy to your otherwise mediocre day. So when people start skipping their morning cup of coffee, they do just fine… for about a week. Then they stop, justifying it by convincing themselves that they’ll save the money another way. Total savings: $20

The other problem is that most people don’t have the discipline to skip the Latte without replacing it with something else. A friend of mine tried to give up soda for a while, because she was tired of spending $2 a day on trips to the 7-Eleven on the way to and from work. But after about a week, she started going to the movies every weekend - justifying spending $10 a week on movie tickets by saving $2 on soda. Total savings: $0

The true way to save $5,000 is to curb the big spending. Everyone has something that they tend to splurge on - for me it’s technology. Every time Apple comes out with a new product I just have to have it. So I end up spending way too much on computers and gadgets during the year than I should. I would have to skip 375 days of Lattes to “pay” for my shiny new $1,500 laptop. For my mom, it’s gifts for other people. While she was here she probably spent $500 on gifts for my kids. You really want to make my kids happy? Take them to the park, or give them a cardboard box - they’ll play in that thing for days!