Finding alternative revenue streams is a necessity for business owners trying to weather the recession.

Kyle, Sarasota, Fla.
We’ve run a dinner theater for three decades, and make most of our money during the tourist season between Thanksgiving and Easter. The rest of the year our audience is local residents. We’ve been operating at a loss for the last couple of years, and are unable to get a bank loan. We own the land and the theater building, and have put them up for sale with no success. We even closed the theater for two months this summer to save money. We don’t know what to do.

By Coeli Carr, CNNMoney.com contributing writer
You're in a tough spot. A traditional lender won’t provide a loan to help you keep your business, and you can’t find a buyer to take it off your hands.

But there are upsides to your situation.

You own both the property and the building on it. Edward Indvik, a vice chairman in the investment services group of Lee & Associates in Los Angeles, suggests heading to your city’s planning department to find out the allowable uses of the building and property. Then look for ways to generate supplemental revenues from the space, especially during the non-peak season.

Some possibilities, says Indvik, are reaching out to companies that might be interested in using your space as a site for seminars or conferences. People might also consider getting married at the theater and hiring you to do the catering. Let the community know your site is open for other business, such as providing recital or practice space for other budding artists.

Joel Shulman, assistant professor of entrepreneurship at Babson College and an entrepreneurial finance expert, concedes that such measures will probably take you out of your comfort zone. But injecting fresh blood and ideas into your operation is essential. Invite local business leaders you respect in for a brainstorming session, enlist their expertise and partner up, he advises. “An alternative business model is something you must consider given the current economic market,” he says.

A partner who creates a complementary business on the premises could pay rent and give you a percentage of the take, says Shulman. Such a person could also act as agent and bring you clients who could use the space during non-peak season or during the day.

Another approach, says Shulman, is to do simple market research by asking local residents on your subscriber list what would inspire them to attend performances more frequently. Perhaps, he says, patrons would prefer to see only the show and would rather dine elsewhere. “It’s easy to lose money on a food business,” says Shulman, who cites spoilage, theft and labor costs as problematic issues.

If you eliminate the dinner, you might be able to raise the price of the theater ticket. By no longer serving a full dinner, you might attract a partner who’d want to set up a cafe or other type of eatery on your premises.

Increasing revenues in whatever way you can will make your business, even in a sluggish economy, attractive to potential buyers or lenders. With recent losses, your negative trend line is the worst thing to bring to a bank, says Shulman. However, non-traditional sources of loans are still available.

For instance, businesses that can't find bank loans can still apply online for loans from microfinance institutions like Accion USA. Premal Shah, president of Kiva, a global organization that helps people make loans to individuals in developing countries, also suggests visiting Prosper.com, a person-to-person lending site.

“It’s the eBay for loans,” he says. But first, try to boost your sales, he recommends. “It’s very attractive to a lender [if] you’ve found alternative revenue streams. It shows you’re a good entrepreneur.”

Give us your advice: Check out recent “Ask & Answer” questions.

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Selling sweet treats can be a fast way to make extra cash, but the road to doing it legally is paved with bureaucracy.

Ana, Dartmouth, Mass.
I'm thinking about making some truffles (chocolate and peanut butter), putting a flyer together, passing it to friends at work and selling to them. I'm making them at home.  Do I need to get a business license or a food license?

By Emily Maltby, CNNMoney.com staff writer

Lots of people are eying their kitchens right now as a way to earn a little extra cash in a bad economy. The Massachusetts Department of Public Health Food Protection Program receives more than 200 inquiries a year from residents hoping to open a food business.

The permits and licenses you will need vary depend on whether you want to incorporate, where you will be running the business, and the type of munchies you want to sell.

Each state has its own guidelines. Massachusetts recently published a brochure on the requirements for residential kitchens, broken out into two categories: "retail kitchens," from which you sell the goods directly, and "wholesale kitchens," for those who are selling their creations to another vendor, such as a local grocer.

What you're asking about is a retail kitchen. To set one up legally, you'll need to be inspected by the local board of health, which will approve and license you.

"They will test to make sure that there is appropriate sanitation, such as making sure there is enough chlorine to clean the food preparation areas and that the dishwashing operation has a sufficient temperature for sterilization," says Suzanne Condon, director of the Massachusetts Department of Public Health's environmental health and safety bureau, located in  Jamaica Plain, Mass.

The health board's inspectors will also make sure that your product is a "low-risk food," meaning that it does not require refrigeration and does not support the growth of disease-causing bacteria. The board may require a lab test to determine the pH and moisture levels of your snacks, along with other characteristics that would affect the food's shelf life. If the inspectors don't think your food qualifies as low-risk food, chances are you won't get the permit.

You will also be required to maintain a standard recipe, which will enable you to properly label the ingredients in your food. A new analysis may be required if you want to alter the recipe. For guidance on how to label your food, check out the FDA's Center for Food Safety and Applied Nutrition Web site.

In some states, kitchen inspections are conducted by the state inspectors. In Massachusetts, they are carried out on a local level. Fees vary widely: In Bedford, a permit can be had for only $50, but Belmont it is $85. Burlington charges $100, and in Arlington it costs $175.

Once you've had your kitchen and your product inspected, you can secure a business license from your local jurisdiction. The most basic registration is a sole proprietorship, which means you will have the ability to sell your goodies on your own. If someone else is working with you, the best option is to get licensed as a partnership.

You can stop there, or go a step further to form a business entity, such as a corporation or a limited liability company. "As a sole proprietor, all your personal assets are exposed," says John Meyer, business development leader at The Company Corporation, a firm that helps startups incorporate. "But by incorporating, you will establish a brick wall between the business and personal assets, because that business license would be under the entity's name — not yours."

Forming a business entity can also provide more tax flexibility, allowing you to deduct losses in years that your company doesn't make it into the black. It's up to you if the cost is worth the reward: Incorporating can cost as little as $100 through an online filing service, but keep in mind that states have their own, additional fees, which may tack several hundred dollars onto the final bill.

You don't have to decide right away whether you want to classify your food venture as a formal business or an income-generating hobby. At tax time, you can submit Form 5213, which allows you to defer for four more years the IRS's determination of whether your business is a for-profit venture.

For more information, the most comprehensive site about registering your business and obtaining permits is Mass.Gov's step-by-step guide to forming a local business.

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If you need to cut costs, here's some tips on how to break the bad news to the staff.

Richard Ryan, Barberitos Southwestern Grille and Cantina, Charleston
I own a small restaurant that grosses around half a million a year. I am going into my third year and I currently employ six people. Most of them live off this job. I am holding a meeting today to explain why everybody will have their hours cut in half. Any advice on how to do this without losing the good performance and enthusiasm of the staff?

By Emily Maltby, CNNMoney.com writer

Many business owners today are finding themselves in the same position: The down economy forces them to make tough cost-cutting decisions, which may entail layoffs, pay cuts and reduced hours. These actions, while often essential to the bottom line, can make employees nervous, discouraged and sometimes depressed.

Because you don't want those negative feelings broadcast to your customers, you should prepare yourself well before diving into the meeting.

The first thing you need to evaluate is whether axing hours is actually the best course of action. Ask yourself whether eliminating jobs, for example, might be a better choice for your business and the employees, advises Bonnie Bernie, director of service operations at HR outsourcing firm Administaff.

"You have to look at all the options because you need to feel confident that you are making the right decision," she says. "Confidence is key when you are delivering negative news."

Keep in mind that employees probably see the writing on the wall. They know the economy is bad, and if they are seeing fewer customers, they can easily put two and two together. So make sure you give them credit for that by being open and honest.

"Acknowledge what they already know. You don't have to go deep into the company's financials, but you have to convey that you are in survival mode, that the downturn is impacting the business. Maybe that means stating that revenues are down a certain percent," Bernie says. "Convey that changes have to be made in order for the restaurant to remain open."

"You also have to send a message of hope," says Kevie Mikus, vice president of client services at The HR Group, another HR outsourcing firm. "Let them know that this was a difficult decision, and recognize that it will impact people's lives. But also stress that, because of these measures, you don't anticipate having to close the doors. If you believe this to be a temporary solution, then send them that message. If you can spell out the expected duration, then paint them a clear picture of what this will ultimately mean for the business when it's over."

Both Mikus and Bernie stress that leaders need to emphasize to the staff that everyone is in this together. Help them stay motivated by getting them involved in rebuilding the business.

"Ask for recommendations on cost containment and increasing sales," Bernie says. "Also consider cross-training them so that they can boost their skills."

Chances are that you know which employees are going to feel the impact of this decision the most – some may be struggling with bills, or with having other family members out of work. But don't make special concessions for them.

"You need to ask employees to step up their game, and if you are treating some people differently, others will hear about it," Bernie says. "That will take the focus off their own productivity."

One way to soften the bad news is to evaluate any other incentives that you may be able to offer to the employees. "Any little measure you can afford, like free meals, for example, could help to offset the blow," Mikus says.

As with any situation where you are dealing with people's livelihood, communication is essential. So make sure that following the meeting you are available and accessible.

Bernie recommends using this as an opportunity to hone your leadership skills. For example, keep the employees informed of the restaurant's progress so that they're not left making assumptions. Also, be sure to roll up your sleeves and show them that you, too, are stepping up your game.

If employees come to you with problems stemming from the new arrangement, do some research for them.

"Depending on where you are and on the employee's salary level, they may be eligible for benefits through a workforce commission. Give them some tools to work with if they need additional employment," Bernie says. "And when possible, be flexible if they have to take on another job."

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Dianne Fernanadez, Keva Juice, Vacaville, Calif.
My son and I opened a small smoothie business two years ago. We did great until the economy fell. We opened it under an LLC, and he has since bought me out. Now, he has to take money out of his personal account to support it every month. He just got a rent reduction of $600 a month, but that won’t be enough. He has it for sale and has a possible offer coming through. If that falls through he is planning to close the doors. He is afraid the landlord will go after his house. I have lost my home and have nothing left, so I’m not too worried about losing my property.

What is the best way to go about getting out of this? What kind of repercussions are we facing, as we still have three years on the lease? We spent $107,000 on the build-out (new tile floors, bathrooms, etc.) as it was a brand-new complex. The landlord inherits this – does this help? The business has no loans against it as we refinanced our homes and/or paid everything in cash. Please help!

By Shara Rutberg, CNNMoney.com contributing writer
Your son’s assets should be protected by his use of an LLC unless he gave a personal guarantee to the landlord or the court “pierces the company veil” that protects against personal liability, says David Sokolow, a professor at the University of Texas Law School. Courts rarely do that – it's a move typically made against sham companies.

“It’s unlikely that the court would pierce the veil if your son didn’t siphon funds from the firm or use it to perpetrate a fraud on the landlord,” Sokolow says.

The LLC, however, is liable for the remaining three years on the lease. This means the landlord can sue for damages, which would be reduced by any rent he or she gets from a replacement tenant during that time. Additionally, a court may subtract out whatever benefit the landlord receives from the improvements made to the space, though it probably wouldn't deduct the full $107,000.

There’s no real way to get out of a lease unless the landlord’s willing to renegotiate. However, “as long as the lease was signed only by the LLC and not by you or your son individually, your personal assets should be shielded from the landlord’s claims,” Sokolow says.

Hiring an attorney is expensive, but the experts highly recommend it in your case. Unwinding obligations when a business fails is complicated, and having a professional on your side with expertise in the legal details pays off in the long run.

Our Caribbean experts weigh in on which island is best for an expat's bar biz.

Edd, Philadelphia, Pa.
I'm interested in starting a bar or café somewhere in the Caribbean. I have around $400,000 in startup capital and 20 years of experience managing restaurants. I am trying to find the best and easiest island on which to start my business.

By Blake Ellis, Fortune Small Business contributor
We set out to find the best locales in the Caribbean for entrepreneurs, and found a wealth of options for you.

Nerissa Golden, an entrepreneur and host of the annual Caribbean Young Entrepreneurs Symposium says that if you're looking to make an investment of more than $100,000, the best option for you is to become a naturalized citizen before establishing a company, because being a citizen will make the process much easier. Some countries, such as Saint Kitts and Nevis, offer "investment programs" that allow foreigners to receive citizenship in return for an investment in local real estate.

The first step toward picking the right spot for your business is to visit various islands to see how their economy and culture suits you. Jim Beach, executive editor of InternationalEntrpreneurship.com, rattles off a number of features potential Caribbean expats should evaluate: "Do you like the rich, celebrity filled – and maybe a little snobby – St. Bart? Or the more relaxed St Lucia? Do you like arid places for scuba diving, like Bonaire? Do you want to live with mostly American tourists as customers in Jamaica, or Europeans in Curacao?"

To find the right place for your business, you need to select a spot where you fit in and feel at home. If your café doesn't fit in with the distinctive atmosphere of the community it's in, it won't be successful. Language is also a factor: If you don't know French, you'll want to avoid one of the French-speaking islands, such as Martinique or Guadeloupe.

That said, Beach believes Curacao is the easiest place to start a business, thanks to its low crime rates and strong government protections.

"Jimmy Buffet is currently looking for someone to buy a Margaritaville franchise in Curacao, but $400,000 might not be enough to get that up and running," he says. St. Lucia and the Turks and Caicos are the trendiest places, and "certainly 'the places to be' if you want to follow all the development."

Golden says that St. Kitts, Anguilla, Antigua and St. Maarten are also good options. "They are experiencing a surge in foreign investors, and are very attractive to high-end tourists as well as other vacation travelers," she says.

However, given the size of your startup capital, Beach thinks you might want to look outside the Caribbean at a less developed area instead. He cites Costa Rica as a hot spot for entrepreneurs with modest capitals.

Michael Stamler, a spokesman for the Small Business Administration, suggests looking at the World Bank's latest "Doing Business In" report, which examines the ease of starting a business in countries all over the world. Puerto Rico ranks in the top 10 countries globally for making it easy for entrepreneurs to get off the ground: registration paperwork is quick and inexpensive. Jamaica is also a standout for startup efficiency – and none of the countries in the Caribbean have minimum capital investment requirements except Haiti.

Once you select an area, Golden advises you to contact a notary or a trust company to apply for a business license and permit of residency. That process takes between three months and a year, she says.

As you create a business plan, remember Golden's advice: "Food and parties go together in the Caribbean, so some of your capital needs to be spent on having regular nights of live music or popular DJs or international acts."

Another recommendation: "When it comes to marketing, research what is most effective on each island, because some islands are more radio-driven, so spending money on print advertising is not the best use of cash. On others with a heavy newspaper readership, print ads get you more bang for your buck."

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Experts share tips and tricks to prevent work from eating family time.

Claudino Petruccelli, Owner, Petruccelli Pasta, Ridgewood, N.J.
My wife and I are selling our food business. Although we're exhausted emotionally and physically, we want to start another company – but not to the detriment of our three young children. How do successful owners manage their businesses without wrecking their home lives?

By Lenora Chu, Fortune Small Business contributor
Your question addresses an ongoing challenge for most business owners. "As entrepreneurs, we tend to take the world on our shoulders to make our businesses succeed, but success can come at the expense of our personal and family lives," says Jennifer Tyler, co-owner of the Los Angeles branch of OneCoach, a national small-business growth services consultancy. The major difference between entrepreneurs who manage to have it all (or come reasonably close) and those who don't, is how they work, Tyler says.

Start by identifying the tasks that you're naturally good at, Tyler suggests. Leave the chores that don't readily fall within your capabilities to smart, experienced hired hands. They'll produce results in half the time. In other words, delegate. To whom? Your resources can include part-time employees, consultants, or even virtual assistants.

It's also important to maintain a separation between work life and family life, says small-business consultant Doug Williams, based in Vancouver, Wash. Determine how you'll establish and maintain that separation before launching your new business. For example, tell clients they can reach you only during certain hours of the day, and when they do, give them your undivided attention. "It's amazing how much respect you'll get from clients once you set that boundary," Williams says. "Without it, you'll be receiving calls during dinner and on holidays – and families suffer."

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Ahmad bin Saripan
I manage a food-processing business, and our sales are declining as costs and the price of raw materials escalate. How can I improve and grow the business?

By Herman Wong, Fortune Small Business contributor
Dear Ahmad: Making and selling a simple cookie isn’t as easy as it used to be. The rising costs of energy and ingredients challenge the recipe for success in the food industry – just as consumers cut back on their spending. Fighting against this inflationary tide takes smart cost-cutting.

“What you don’t want do is to start willy-nilly cutting costs. Be strategic about it,” says Bob Goldin, executive vice president of Technomic, a food industry consulting firm.

Fat to trim can come from the traditional places like headcount and company inefficiencies, but sourcing presents another good opportunity. Take a hard look at your production process. Can you replace any expensive ingredients with cheaper options that won’t affect the product? Outsource your manufacturing if possible and prudent, and do some research to see if you can find new suppliers with better prices. Also consider amending your contracts with suppliers: for example, offer to extend the contract length in exchange for lower prices.

But a business can’t cut its way to prosperity. It must also enhance revenue. Goldin suggests optimizing the price you charge (possibly by passing higher costs along to consumers) while also attempting to increase sales volume. Promotional activities can be a good investment: A sales slump can be a catalyst for more effective marketing.

Seek out new niches or channels to pump up sales. For a retailer, this could mean looking into specialty food stores or food services. Companies dealing in fresh foods could research expanding into the frozen arena. “You really have to explore the gamut,” Goldin says.

Looking deeper

Reacting to price increases may only be addressing surface symptoms, however, says Eric Flamholtz, professor of management at UCLA's Anderson School of Management.

“It’s not just the question of 'Costs are going up, how do I handle this? Do I negotiate a little better?' That’s only going to be a transactional perspective, as opposed to a management perspective,” Flamholtz says.

He suggests looking at the big picture – the current environment, your competition and industry trends – and then figuring out something unique about your business to build on. For example, Bell Carter Olive Company became a dominant player in the black olive industry by focusing on being a low-cost producer, which required a reassessment of both its business operations and its raw material purchases.

Once you've decided on a course, evaluate all aspects of your operations and determine how well they meet your company goals. That means taking a hard look at your market position, the services you offer, your operational and management systems, and even your company culture.

“What he really has to do is to step back from the immediate problem, take a more fundamental look at his business, and do a strategic assessment,” Flamholtz says.

Adjusting your business model

Judith Moore of Charleston Cookie Company has been battling cost increases all year. Her five-year old South Carolina company, which does around $1 million in annual sales, has seen the price of a 50-pound sack of brown sugar rise from $19.95 before Christmas 2007 to $26.95. Flour is up 25%, as is the European chocolate that gets folded into Moore’s double-fudge chip brownies and white-chocolate pistachio cookies. The falling dollar made importing from Europe a pricey proposition, so Moore is looking for a less expensive domestic chocolate producer that can provide the same level of quality.

She is also taking advantage of her growing wholesale business, which accounted for 40% of total sales in the past but will reach 50% by the end of 2008. Moore is leveraging her larger volume of purchases to negotiate better rates for ingredients.

But she’s not content to sit still. The company recently attended the recent Fancy Food Show in New York and came away with leads at four major wholesalers.

Moore is also sinking money into upgrading her company's Web site, an initiative aimed at increasing online sales. A new, monthly e-mail promotional campaign will cultivate existing customers.

Web sales currently make up 20% of revenue, but Moore plans to double that in 2009. She's hoping changing consumer habits will play into her online growth strategy: “It’s entirely possible given the price of gas that people may shop more online now than they are shopping in person," she says. "So that could be timely as well.”

Brenda Zimmerman, Caldwell, West Va.
I am starting a very small home based business. I will be using downloaded images, photographs, etc., to make edible images for cakes. Do I need a business license?

What do you recommend? Leave a comment below with your answer.

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Harold Baring, Los Angeles
What are the ideal ratios of restaurant operations?

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If one partner wants out, the other has a fiduciary duty to negotiate an exit strategy that won't damage the business.

Kath, Darwen, Utah
I am a partner in a restaurant and food-services business. I want to leave the business partnership, but my partner won’t buy me out. She says she’ll close the business and restart it, leaving me with nothing. I am only asking for the money I put in. Can she do this legally?

By Shara Rutberg, Fortune Small Business contributor
Dear Kath: Your partner’s conduct would probably be a breach of her fiduciary duty of loyalty to the partnership, according to David Sokolow, a professor of business organizations at the University of Texas School of Law.

“She cannot usurp the partnership's business for herself at the partnership's (and your) expense,” he says. “Courts are very unsympathetic to people who engage in oppressive conduct. She would be much better off simply buying you out for a fair price and then conducting the business as she sees fit.”

Your next step: Find a good lawyer.

“It’s very important for you to consult an attorney at this time,” says Suzanne Saxman, a partner in the Chicago office of Seyfarth Shaw and vice chair of the middle market and small business Committee of the business section of the American Bar Association. “You might want to start getting tough with this partner who’s making threats.”

Disclaimer: This column provides general information only and is not intended to replace the services or legal advice of an attorney or CPA. Always consult a lawyer or accountant regarding specific legal or financial issues.

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Joshua Smith, Lewisville, Texas
What are some of the standards for developing a high-price look in a small business restaurant?

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Ask FSB's experts advise an inmate looking to launch a business upon his release.

Darren Montville, Collins Correctional Facility, Collins, N.Y.
I, along with my father, would like to open a restaurant and catering company. I was wondering if you could give me as much advice as possible about small businesses, restaurants, catering, etc. I have plenty of great ideas that I believe will bring me investors and customers, but I need information. I don’t want to fail at my business, and I’m eager to do well.

By Annalyn Censky, Fortune Small Business contributor
Dear Darren: Jobs opportunities can be limited if you’ve served time, so entrepreneurship presents an attractive option for an ex-con. Catherine Rohr, the head of the Prison Entrepreneurship Program (PEP) in Houston, encourages you to pursue your dream – but only after you get back on your feet. Rohr, who founded the nonprofit in 2004 to help inmates develop the necessary skills to start their own businesses, says you should spend at least six months in the working world before going out on your own.

“After years of not making decisions, even ordering off a McDonald’s (MCD) menu can be a challenge,” she says. “When PEP participants leave prison, they begin with a starter job and save money to pay their parole fees and child support. They wait until they’re stable and have a track record of success before starting a business.”

That said, it’s never too early to start planning, and a penitentiary can be a surprisingly good place for a budding entrepreneur to develop a business strategy, says Rohr. When you’re incarcerated, you have a unique amount of free time to brainstorm ideas.

Choose your industry

Unless you’re resolute about opening a catering business, you might want to consider a different industry for your first endeavor. Food service companies can be expensive to launch, says Hans Becker, a PEP participant who managed a commercial kitchen for three years between stints in prison. You have to invest in a kitchen, a method of transportation, and a large cooler or refrigerator. “It’s a difficult venture; there are a lot of liabilities and rules,” he says. These include strict health and safety regulations, as well food service permits.

Rohr says she typically encourages inmates to start service companies rather than ones that sell products. Her suggestion: Launch a mobile business so that you won’t have to deal with the costs of opening a storefront. Want to start a barbershop? Offer to cut hair onsite at offices. Interested in creating an automotive detailing service? Bring your equipment to company parking lots and service employees’ cars while they’re at work.

When Becker was released from prison in May, his family gave him $500 to pay for food and clothes. Instead, he bought a chainsaw and tools and started a tree-trimming service. After knocking on doors for a month, he garnered $3,400 in revenue, and nearly doubled that in his second month of business.

Formulate a business strategy

Shortly after he started his company, Becker took the next step and wrote a business plan. You can get ahead of the curve by working on your plan now, says Rohr. But know that it could be difficult. It’s not easy to conduct market research – a necessary component of any business plan – when you’re in prison. Rohr suggests that you ask friends and family members for assistance. Send letters to local churches, asking them to forward your query to businesspeople in their congregations. Becker advises you to write to MBA students or restaurant associations in your area. Once you’ve made contacts outside of the penitentiary, ask them to obtain information about pricing, competition and marketing strategies.

You can also turn to some of your peers for assistance. “Ask someone who is nearing release to send you market research after he gets out,” Rohr says.

For further advice on crafting a business plan, get your hands on a good entrepreneurship textbook. Rohr recommends Steve Mariotti’s How to Start and Operate a Small Business.

Fund your startup costs

Whether you’re asking for $500 or $50,000, securing startup capital is difficult when you have a criminal record. But don’t give up, says Jenny Boister, senior vice president and SBA manager at the Valley Community Bank in San Jose.

“It’s possible for an ex-con to get a loan,” she says, “but you’ll have to jump through hoops.” In order to obtain an SBA 7(a) loan, you’ll need to fill out a criminal history form and provide details about your conviction, parole and probation. You’ll also have to submit fingerprints. The lender will then forward the application to the SBA’s Washington, D.C., headquarters for approval.

Rohr says you shouldn’t bet on receiving financing from banks or other traditional sources such as venture capital firms and grants. Instead, she encourages you to start a business requiring startup capital of $10,000 or less – a reasonable amount of money for you to save or request from an angel investor.

To access investors, try to meet wealthy individuals by networking through local business organizations.

“Find someone who believes in transformation,” Rohr says. “Pursue him or her with all you’ve got.”

When you hand over your business plan, you’ll need to be transparent about your criminal history. Rohr suggests including a section about your childhood. Recount the path you took towards a criminal lifestyle, detail how you’ve changed, and explain why you should be trusted as an entrepreneur.

Finally, practice your pitch before soliciting investors. Rohr says a correctional facility is a great place to hone your selling technique. “The captive audience in prison can service as a focus group,” she says. “Be open to their feedback, as both ‘customers’ and ‘investors.’” She suggests that you brainstorm business names, pricing, and marketing strategies with your fellow inmates.

Practice model behavior

Before you become a great success in business, you first need to be a good citizen. “I don’t care how great your business plan is if you can’t stay away from drugs or gangs,” says Rohr. “Good businessmen don’t sag their pants or curse in formal situations. They don’t break the law or abuse drugs or alcohol.” In order to act the part of a successful businessman, she says, you should start emulating the behavior of a professional now.

To do so, you’ll need to conquer the bad habits that landed you in prison. Prepare yourself to turn away from bad influences upon release. That could mean distancing yourself from old friends, significant others, and even family members, say Rohr.

Becoming an entrepreneur is no easy task, but it offers a unique vehicle for redemption. “Parole may take some of your rights,” Rohr says. “But one privilege that no one can take away from you is the right to start a business.”

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Crime & publishing

Business loans from Uncle Sam

Andreea, Brasov (International)
I own a supermarket in my town. To improve sales and bring in more customers, I organized music concerts in the parking lot of the store. What other activities besides promotion prices and Sunday offers would increase sales?

What do you recommend? Leave a comment below with your answer.

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Ask FSB's experts offer advice for a wine importer starting up a new line.

I. Safdie, Miami, Fla.
I introduced a South American wine to the person in charge of importing food to his Caribbean island. He has a sample of the wine, and agrees that it's good. I have no capital of my own, so am unable to import the product to the U.S., where I know it would do very well. I did all the research and used my personal contacts and references to get this person an appointment with the winery. This person has now offered me a finder's fee, should the wine pass the initial compliance inspections necessary for his country, after which he will offer it for sale there. How do I validate this, and what do I charge as the finder's fee? And if I looked into importing it myself into the U.S., what are the first steps I should take?

By Lenora Chu, Fortune Small Business contributor
Dear I. Safdie: Any time you’re brokering a deal between a buyer and seller you should aim to protect your interests by clearly stating your terms before introducing the two parties, the experts say.

However, since the introduction has already been made, you’ll need to rely on the word of the person you’ve assisted, says George Mylonakis of the Boston-based international trade-consulting firm Go Global Logistics.

You could also ask the winery to notify you when the person has made a purchase.

Essentially, the finder’s fee is up to you and the buyer to negotiate, says John Heimsath, president of the Houston-based customs consulting firm ACM Logistics.

Some factors to consider include the quantity the buyer will purchase and the relative difficulty of procuring the wine.

“If the winery is somewhat exclusive or only sells to certain customers, you would obviously want to ask for a larger fee,” Mylonakis says.

A typical fee might be 5% of the value of all shipments sent within the first year, according to Mylonakis.

Because tracking the total value of shipments can be tedious, an alternative would be to estimate the value of the first year’s total shipment. You could then ask that a percentage of that estimate be paid up-front as a flat fee.

“It all depends on the relationship with the buyer, how much risk you’re willing to take, and how much time you want to spend tracking orders,” Mylonakis says.

Remember that whatever terms are agreed upon should be laid out in a contract, Heimsath says. International attorneys are an expensive but vital necessity in this case, he says.

As for importing the product into the United States, Mylonakis says half the battle is already over.

You’ve already done the legwork and found a quality product and supplier. “Many importers never make it this far,” he says.

When you have no capital, there are ways to get creative, he says. For example, you could pool your customer orders in advance and try to collect deposits.

The winery may also work with you on payment terms, such as allowing you to pay for the wine after it has been imported and sold.

“Try to think outside the box – or in this case, outside the bottle,” Mylonakis says.

You should be aware that alcohol is one of the few types of products for which you need an import permit, which in your case would be issued by the Alcohol and Tobacco Tax and Trade Bureau.

Once you secure the permit, you’ll still need to clear U.S. Customs and the FDA, as well as meet all labeling requirements. A customs broker or third-party logistics firm can help you manage the process, Mylonakis says.

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The scoop on financing a chain of Dairy Queens

Sid, Atlanta
My partner and I have owned more than 10 Dairy Queens over the past 20 years. We’ve never lost any locations. Each is incorporated separately. We’ve been trying to capture another location in Alabama. They’re asking $625,000 and we’re ready to put 20 to 25 percent down. It seems hard to get a loan these days. Is it because the market is falling? Do you think we might face a problem securing the loan?

By Shara Rutberg, Fortune Small Business Contributor
Dear Sid: Ten Dairy Queens! Not only is that a lot of Blizzards and banana splits, it’s a lot of experience that should help you you apply for a loan. Over the past two decades, you’ve “likely gained tremendous experience in the franchise business,” says Alfred Luhr III, senior vice president, business banking at Buffalo-based M & T Bank. “That experience should be put to use when applying for a new loan. Prepare an updated financial plan that shows projected revenues, expenditures and cash flows, as well as year-over-year same-store sales statistics, location analysis, management structure and background, franchise contracts, etc. The better prepared the borrower, and the better the communication between borrower and banker, the easier the decision for the bank."

A more positive flavor within the ice cream business might have more of an impact on your potential to get a loan than the overall economic climate that seems to be melting profits across the country. “Keep in mind that your business’s ability to borrow in this economy will depend on how the downturn is affecting your particular business and perhaps your industry more broadly,” says Jim Cole, a spokesman for San Francisco-based Bank of the West. Consider working with a bank that understands your business and has experience lending in your industry.

You can still get a loan, agree Cole and Luhr, but you just might have to work harder for it. “Your best bet is to develop a strong, deep relationship with a conservative, well-capitalized bank that is focused on serving businesses in your community,” says Luhr. “Banks today are even more interested in your deposits than in your loans, so consider moving as much of your banking business as possible – both commercial and personal – to that bank that provides you with credit. With that kind of relationship, your bank is far more likely to give you the help you need when you need it most.”

In today’s economy, some lenders may prefer to lend via the Small Business Administration’s 7(a) program that shares some of the credit risk with the lender. Another advantage to SBA financing is that they often come with “a longer term, which means lower payments. Lower payments enable you to retain more working capital to grow your business,” says Cole.

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A business "pre-nup" could have helped these squabbling partners resolve their differing visions for expansion.

William Taylor, Denver, Colo.
My partner and I are having disagreements on how we'd like to expand our business. We currently operate a small restaurant. My idea is to open more locations. To do so, we'd have to bring on additional partners in these new ventures, which would mean we would not have the same amount of company shares in the new location. Currently, I'm the majority shareholder with 55% in the company stock, to her 45%. I have offered her the opportunity to expand with me. She's declined, saying she'd like to go out on her own, alone, and open another location with our current name. As a majority shareholder, can I protect the company name, and not allow her to operate a new location if I'm not involved?

By Shara Rutberg, Fortune Small Business contributor
Dear William: First, you must understand that there are actually three entities involved in the venture: the two shareholders and the corporation, which is recognized as a legal person, says Fern O'Brien, a partner at Boulder, Colo.-based O'Brien & Zender PC who has extensive experience representing restaurant ventures.

The name of the company's restaurant is not owned by either shareholder, it's owned by the company.

"The majority stockholder essentially controls the company and, without his consent, the company may not allow the minority shareholder to use the company's business name," she says.

Typically, in a small business like yours, both shareholders are also the only members of the board of directors. Under corporate law, each director has a fiduciary duty called the "duty of loyalty" that requires them to act in good faith and in the best interests of the corporation, O'Brien explains. "A director must place the interests of the corporation before the director's own interests. She cannot usurp a corporate opportunity – in this case, starting a business that will conflict with the business of the company."

Having another restaurant with the same name operated completely independently would be confusing to the public, says attorney Donald A. Bertram of The Bertram Law Firm in Denver – and it could limit your ability to attract investors or franchisees.

"This and other potential problems between the two owners could have been addressed in a stockholder's purchase agreement, sort of a business pre-nuptial, at the time the company was formed," he says. "It will be much harder now that the two have very different ideas for the future." He recommends contacting an attorney to discuss your options.

One solution might be for you to agree to have the company license its name to your partner, suggests O'Brien. That way, you "could expand your business without bringing on a new shareholder, increase revenues through royalty payments, and give the minority shareholder the autonomy she is seeking," she says.

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