Rumors Helped Slay Bear; Don't Let It Happen to Your Biz

"If Bear Stearns had taken the opportunity to measure the conversation and the sentiment behind that conversation, they could have taken measures to make the fallout less severe," he says.

Remember that your customers and employees may be posting everything from office gossip to product complaints on their personal Web sites and blogs. You'd better know what they're saying so you can set the record straight on any inaccurate information.

Unfortunately, though, negative rumors can also be true.

Even if you'd rather not discuss something like a shaky bottom line or impending layoffs, once the word is out, you've got to address it. It may be the only way to retain the confidence of your customers -- and their loyalty.

Chances are your company will never face such a dramatic, public breakdown as Bear Stearns. But a small business may not be able to withstand even small cracks in its foundation.

Dealing with a rumor before it spirals out of control keeps those cracks from shattering the whole company.

Know What You Own: Bear Stearns operates in the financial services industry, and some of the other stocks in its field include Lehman Brothers (LEH Quote), Merrill Lynch (MER Quote), Morgan Stanley (MS Quote) and Bank of America (BAC Quote). These stocks were recently trading at ($42.36, -8.88%), ($42.83, -8.15%), ($43.73, +2.03%) and ($38.80, -0.33%) respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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