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March 16, 2009

Dispelling rumors can save a business

These days, there are a lot of things that can cause catastrophic problems for businesses of all sizes, from a lack of credit and the wrong mix of products to out-of-control expenses.

But what's a business owner to do when word begins to circulate that his market, salon, retail shop, some of them a lifetime in the making, or even a big-box outlet, is about to go under?

Given the high degree of inaccuracy, rumors can't be ignored by the owners of businesses that are the targets of such loose talk.

Carrie Cardoza Bordona, president of media relations firm Cardoza & Associates, and David Boring, founder of Never Boring Design, urge business owners to meet the challenges of malicious rumors head-on.

"If you know a rumor about your business is out there and it's untrue, then you have to respond to it," Boring said. "Start with your staff. Let them know what you are doing and why. Be transparent with them. They have a lot of contact with people in the community and can help get your message out."

Cardoza Bordona said developing key messages and training staff to communicate them is essential. "It doesn't look good when an employee says, 'I haven't heard anything' to an inquiring customer or industry associate."

Boring stressed reaching out to customers. He said newsletters, e-mail, telephone calls and one-on-one contacts are effective ways to reassure people about what the business is doing, why it is making such moves and what its plans are for the future.

"A lot of businesses have long-term plans, but they have to adjust," Boring said. "You want to tell people, 'Here's how we are moving forward.' Let them know what you are doing to be more efficient and still serve them as well, if not better, than before."

Cardoza Bordona advises taking a grass-roots approach by participating in high-visibility local events with a vendor booth or as a sponsor. She said this allows business owners to talk directly with people. Participating in nonprofits, service clubs and professional groups also gives business owners access to community leaders.

"These individuals often shape public opinion, and staying connected with them through service work can prove beneficial," she said.

Maintaining a high degree of visibility is important, Boring said. People need to see that business owners are still out there, still engaged, still active in the community.

As marketing specialists, Boring and Cardoza Bordona know the value of having a strong message and keeping it in front of the public, in good times and bad. They also know that's even more important when questions about the future of a business are raised.

People will talk. It's human nature. What may start out as an innocent observation shared by one person with another can end up sounding like the real thing when it's been passed around several times and elaborated on -- often by those who don't have any firsthand knowledge.

What consumers need to ask themselves when they hear such rumors is: What's the source and how much weight should I give it?

If the information is from a bankruptcy case, corporate report or regulatory filing, as was the case with County Bank, Gottschalks and Mervyns, then it's pretty solid. If it's from a friend of a friend of a friend of a guy who knew someone who used to work there, then not so much. People always can do a little research for themselves, online or by going into the business and asking the owner or staff what's up.

As much as people proclaim they are tired of all the bad economic news they're hearing, they remain transfixed on it right now because the stakes are so high. So any change a business makes is going to get attention and likely spark some reaction.

But before jumping to conclusions, remember that each business has a lot riding on it too. It doesn't take too many people saying someone is going out of business before that person is out of business.

That's why it's important for businesses to be proactive in dealing with rumors. And why it's equally important for those starting them or passing them along to consider the irreparable damage they can cause.

Bee Business Editor David W. Hill can be reached at or 578-2336.

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