If sales are hemorrhaging or customers are flocking to dealmaking competitors, discounting might be necessary. But chopping prices is not without risks, including a cheapened brand image and customers who will never pay full price again. And if there’s no demand, even signs that scream “Lowest Price Ever!” won’t draw customers. “The primary factor that determines the price you’re going to get is what the demand is,” says Roland Rust. “In a situation where people want things less, the price has to be right.”

As the economy began to deteriorate in early 2008, a few things became clear to Gary Gottenbusch, owner of Servatii Pastry Shop & Deli Inc. in Cincinnati: Customers were purchasing smaller items in an effort to be frugal, and soaring prices for flour and other commodities were threatening to eat into his profits. A trained baker whose family has been in the bakery business for decades, Mr. Gottenbusch knew the danger the situation posed to his small business…

According to an SBA report, “Expected Costs of Start-up Ventures,” published in November 2003, the average business with one owner costs about $6,000 to start, and the average business with two or more owners costs about $20,000. Where does this money come from? Thirty-one percent (31%) of all start-ups are funded through the entrepreneur’s personal credit cards. Other sources mentioned are loans from friends or family, mortgages on property, savings, cashing out retirement accounts, an inheritance, a full or part-time job…

In this video segment, Ken Yancey, the CEO of SCORE, and investment advisor Phil Town answer questions from MSNBC viewers on funding for their small businesses. The two debunk the myth of federal grants, caution viewers on accepting investment dollars from friends, and clarify the full credit risks of bank loans.

When banks say no, owners of cash-starved small-businesses aren’t giving up on finding loans. Many are turning to microlenders for the money they need to meet the payroll, buy supplies, pay the rent and keep the lights and heat on. These microlenders — community-based nonprofit lenders that draw on a varying mix of financing from the Small Business Administration; other federal, state and local government agencies; and some philanthropies — say small businesses and entrepreneurs are increasingly seeking financing as home equity loans, credit lines and other loans have all but evaporated.

When big initial costs make it hard to start your business, look further into the figures—they may not be as scary as they seem
As a startup wedding and event photographer, I made a list of all everything I need to purchase for my business, and it literally scared me. Between investing in equipment, software, Web site design, and advertising, my projected income is much less than my necessary expenses for this company. Photography has been my life’s passion, and I really want to succeed. Is there any advice you can …

With corporate managers under enormous pressure to control costs and maintain liquidity in the current credit crisis, advertising budgets often appear to be a dispensable luxury in the struggle to survive. Executives who succumb to that temptation, however, put the long-term future of their companies at risk, according to Wharton faculty and advertising experts.
“The first reaction is to cut, cut, cut, and advertising is one of the first things to go,” says Wharton marketing professor Peter Fader, adding that as companies slash advertising in a downturn, they leave empty space …