Question: I manage an integrated marketing services business. Communication is essential to our success, both internally and externally. Lately my employees have been communicating frequently with each other, but mostly on a negative level, and I have felt the impact as sales and customer service have plummeted. What do you recommend?

Answer: There are many different ways to keep your employees focused on doing their jobs, and not just complaining about them.

I used to believe that if you allowed your employees to air their feelings in a public forum, it would be a good way to help get hostilities off their chests and clear the air. I was wrong. That kind of forum often simply causes other employees to stew about something they weren't even moderately concerned about, or even aware of!

While I am a strong believer in keeping employees informed, I think it is equally important to keep them focused on performance.

Maybe you need to set up some sort of incentive program that encourages your staff to spend more time communicating with clients than with each other. You might also set up a system that encourages your employees to complain directly to you, either via voice-mail, e-mail, or in person. This way, you can respond directly to them, which might give them a feeling that they are not being ignored. If you react to them, it will show that something is being done about the problems, and it might alleviate the gossiping.

Turning whiners into winners is a task worth working on. It will increase productivity and keep a line of open communication that is a positive and not a negative.

Q: I own a small number of franchise restaurants. We would like to own more, but are constricted by capital. You have said in previous articles that there are many new opportunities to raise money. Do you have any recommendations for our type of industry?

A: It appears from everything I have seen that the once-obscure franchise loan marketplace is beginning to open up through securitization.

The average franchise operator is expanding and opening up new locations in every type of industry from gas stations and funeral homes to golf courses and movie theaters.

Investor appetite for asset-backed securities is hot. This is largely due to the perception that franchise loans are a good credit risk and still offer a respectable rate of return. Besides, the investor protects his downside with the prepayment protection that is built into the mortgages that are part of franchise loans.

So if you're looking to expand, this is the time to do it. Pooling your assets and packaging your franchise loans might be an excellent way to capitalize your business' growth. New companies like Peachtree Financial out of Atlanta have recently entered this business, looking for new securitization issues. Others, like U.S. Restaurant Properties, are looking to shore up their franchise finance operations.

Q: In the last few months, I have lost about two-thirds of my employees mostly due to better job offers. With unemployment at its lowest, I am having a hard time keeping my people. This is becoming a real hardship, because as you know, it's costly and disruptive to deal with a lot of turnover. How do I keep good people from leaving?

A: Good people are hard to find and more difficult to keep. But here are a few tips you might be able to use:

? Choose wisely when you hire. Take your time picking people. Find the ones who you think will work well with your management style and employees.

? Don't over promise. Sometimes entrepreneurs love their business so much, they make it sound so exciting that everyone who joins the firm thinks he or she will be having as much fun as the owner. Hopefully, that will be the case. But the reality is that a lot of jobs in a small business are very time-consuming and frustrating. Try to be realistic about the position when you bring someone on board.

? Give people responsibility and make them accountable, especially Generation Xers. They like being taken seriously and want to make a mark for themselves. Give them a chance. Let them learn by doing and don't baby them too much. You'll get more out of people if they can see what they've accomplished.

? Share good news. When a customer is pleased with your employee's work, share the compliment. That can pay off in spades.

? Find ways to resolve conflicts. Often when you put a few overachievers under one roof, you'll have an occasional skirmish. Don't allow this head-butting to get in the way of your employees' loyalty to your company. Whatever you do, don't turn your back on the problems; try and find ways to resolve the issues between your workers and settle their differences in a way that keeps everyone happy and on board.

Q: A few of my friends have developed some unique handicrafts that we would like to market and sell ourselves. We all have young children and don't want to set up a physical store, and think we could use an electronic medium to sell our wares. What do you suggest we do to launch our venture?

A: First, you should get a basic knowledge of how electronic retailing works. Watch QVC for a few hours nobody does it better than they do through television. But one of the secrets of success is having name-brand products and people pushing them. You won't be that lucky. So you'll have to be a little more clever.

Setting up your own Web site isn't that difficult. Maintaining it is another story. You will need to target your product to a demographic group that's always a good idea no matter how you're selling your products and services. You might want to consider contacting a local cable company or electronic distributor that could help you get started.

I would definitely recommend you do some of your own research, perhaps by going to a seminar on this subject (The Learning Annex probably has some good ones) and buy a book, like "The Complete Guide to Infomercial Marketing" by Timothy R. Hawthorne, to give you some frame of reference.

Lorraine Spurge is a personal finance advisor, author and business news commentator. She can be reached at (818) 705-3740 or by e-mail at lspurge@spurgeink.com.

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