Making It Legal:

I recently gave a teleclass on intellectual property issues for small business owners.  One of the questions that came up is whether it’s okay to use someone else’s content (in this case, transcribing a podcast and posting it in its entirety) on your own blog as long as you give the proper attribution. 

The short answer is no (“What?!â€? horrified bloggers exclaim).  The general rule is that any time you want to take someone else’s content and use it you need to ask for permission.  Why?  Because the right to control the distribution of the content is part of the monopoly of copyright rights that one gets for being the creator of the work.  In this case, the creator of the podcast has the sole right to make whatever other uses of the work she chooses.  She can turn the podcast contents into a CD, a book, a PDF transcript, a workshop.  Only the original author can do that. 

However, there is a small exception known as “fair use�.  It’s the exception that bloggers hang their blogging hats on (and sometimes, their necks, if they’re not careful).  Fair Use looks at the reason, context and amount of the content you take.  It’s like the big Celebrity Fit Club scales, weighing and balancing different factors.  If you take someone else’s content for reasons or news or commentary, the scales tend to tip in your favor; if you take content to sell off in your own products, the scales tip away from you.  If you use just a tiny portion of the overall whole content to make your point, that’s more acceptable; if you transcribe the entire podcast and post it for free on your website – probably not kosher. 

So play it safe, because a cease and desist letter is a nasty thing to receive in the mail.  If you have any doubts about the amount of content you want to use, ask for permission from the authors before you take their content.  The best that can happen is that they say yes!

I had a query about using confidentiality agreements.  “Cee� asked: 

<<i have every person i deal with sign confidentiality. but i have found that it does not really protect you because unless you are willing to pour tons of money into a lawsuit, and most small people dont have tons of money, then what can you do?>> 

The first question I have for Cee is what’s IN your agreement?  Most confidentiality agreements that I see downloaded from the Internet (where many entrepreneurs get their legal advice) have more holes than Swiss cheese.  They may be 1-pagers that simply say “we acknowledge that we’re sharing information and agree not to disclose it.� 

That’s not enough!  A good confidentiality agreement contains a lot more, such as: 

• Identifying the specific information that will be considered confidential 
• Detailing the actions OTHER THAN mere disclosure that will be considered a violation – such as doing an end run around you and “doing the dealâ€? with someone else (called “non-circumventionâ€?) 
• Limiting the number or identity of people within the company who have a right to know the information 
• Imposing confidentiality requirements on third parties (such as subcontractors) 
• Providing TEETH in the agreement!!!  (Can you hear my frustration?).   

One of the fatal flaws of most canned confidentiality agreements is that they don’t spell out what happens if the other side divulges the information.  (Acchhh – if I had a nickel for every lousy confidentiality agreement I’ve seen . . . .).  That’s where entrepreneurs and small business owners lead the fox right into the proverbial hen house.  There need to be penalties for bad behavior (improperly disclosing information).  Such as the right to bring an expedited lawsuit (called “injunctive reliefâ€?), the right to have your attorneys’ fees paid if found in your favor, the right to bring the lawsuit in your local courthouse (“jurisdiction and venueâ€?).  All of these things can make it v-e-r-y unpleasant for a party – especially one overseas — who has the inclination to pirate your valuable intellectual property. 

Confidentiality agreements can’t necessarily prevent the need to bring a lawsuit to enforce them.  But, if properly worded, they can make the process swifter (and less expensive); plus, a clearer case of infringement with a well-written agreement might make your case a more tempting one for an attorney to take on a contingency fee basis (in which case, you don’t have to front the legal fees).   

Final words:  especially if you are negotiating with an overseas company, do your due diligence!!  Find out if the company is reputable.  Learn about the customs of doing business (just how informal is it?).  Is there a culture of pirating? 

To those who say, “I can’t afford the due diligence,� I ask, “can you afford not to do it?�

Don’t ask me where the past week has flown.  It’s been a flurry of activity . . . and a flurry of comments on my post Why Women Entrepreneurs Don’t Get the Financing They Need.  Seems it struck a bit of a nerve on all sides with some proponents in the “small-is-smart-not-weak” camp (and yes, I agree, expansion for its own sake isn’t necessarily good growth strategy) and others in the “yeah, you got me” camp who are feeling the fear and doing it anyway (great book by Susan Jeffers, if you haven’t read it).  I’m just tickled that it has started a great discussion!  J 

There are a few steps that it helps to follow.  First step is to know how much money you need, why you need/want it, and how you intend to use it if you received it.  If you haven’t done one before, this is where putting together a business plan can really help.  Start to gather the financial information that you would need to complete one.  Do you have a solid handle on your company’s finances?  Are all of your P&Ls and balance sheets up to date?  For that matter, have you reconciled all your bank statements?  Do you know where your bank statements are?  If all of your receipts and company documents are stored haphazardly on our computer or in a Henri Bendel’s bag, it’s time to bring in a bookkeeper to get this sorted out and systematized!  If you can’t handle your $10,000 budget and operations smoothly, will you be giving your lenders or investors the confidence that you can handle a $100,000 budget (and their money) well?

Second step is to familiarize yourself with the different kinds of financing.  Our own Entrepreneur magazine website has a finance section with a lot of information.  Also check out Rosalind Resnick’s Vest Pocket Consultant blog and Money Matters column.   Michelle Anton’s Weekend Entrepreneur blog refers to Count-Me-In, which helps women-owned businesses get funding.   And don’t forget Springboard, too!  So you see, resource abound!

Third step is to network!  No doubt you’ll know people who have gotten financing, or who would make great advisors.  Ask about their experiences.  Did they regret the path they took?  What would they have done different?  Asked for more money?  Less?  Chosen equity instead of debt, or vice versa?  Did they give up too much control of the company for their liking?  All of those things will help you get comfortable with the deal terms you want to achieve.  They may also know of angel investment funds or bank representatives who “get itâ€?.  They can also give you insight into what it’s like to manage a larger company once the funding comes in and how you can (or should) keep bankers or investors apprised of your progress.

Final step (for now) is to get a team of advisors on board.  Whether it’s someone to look at your business plan, an accountant who can help you work out the numbers, an attorney who can help explain the legal responsibilities you’ll be taking on – this is a big step.  Don’t feel you have to go it alone – and good luck! 

In response to my teleclass announcement, I had an inquiry from a reader in Illinois who was wondering how she could protect her idea for a product aimed at children and young adults.

The first thing to recognize is that intangible ideas cannot, in general, be protected — not by using traditional copyright or trademark (or other) forms of intellectual property protection.  Before there’s anything tangible to copyright, or used in trade to trademark, there’s an idea that needs to be fleshed out.  Or that needs money to help develop it.  Your product idea may not have reached the stage where it’s ripe for that kind of intellectual property protection.  If you and I are sitting at a bar, and you’re waxing lyrical about the idea (especially any details about it), anyone overhearing you can pick up on the idea and run with it.   

That’s where a confidentiality agreement comes into play.  Regardless of the embryonic (or other) stage of your idea, it offers a certain level of protection, letting the signer know that you intend to take action if violated.  When worded correctly, the agreement provides that your sensitive information will be kept confidential and will not be disclosed for any purpose. 

If you truly believe that your idea has value, RUN – don’t walk – to an intellectual property attorney in your area to get a proper confidentiality agreement that you can use.  Download from the Internet all you want, but let the attorney have the final say.  He or she will know better than you whether the wording really protects you, or whether there are missing parts that it should contain.  If your idea is so spectacular that it deserves protection, a properly-worded confidentiality agreement shows to others that you’re not a rube and that you DO mean business.  It’s an excellent screening tool, because if someone refuses to sign it, that should raise a flag that there are issues you need to be concerned with. 

Don’t let the prospect of finding a good attorney daunt you.  Visit my free podcast on Choosing and Using Attorneys Wisely so that you’ll know which questions to ask! 

Often because, in short, they don’t ask for it. 

I was chatting with Bunmi Zalob, publisher of WomenEntrepreneur.com’s Secret to Serenity blog, about “playing small.�  And why women seem to do it.  The sad truth is that studies show that women do it to themselves over and over. 

A recent study showed that female entrepreneurs are far less likely than their male counterparts to seek angel financing . . . and that one of the reasons they are not getting angel financing is that they aren’t asking for it.  As my mother taught me, “If you don’t ask, you don’t get.�  (She had a corollary, too – “You still may not get even if you do ask, but you definitely won’t if you don’t� – which she usually tossed out when I asked to borrow the car, or to stay out late).    Over four years ago, I wrote an article on women and negotiation based on a study reported in the Harvard Business Review.  The study showed that men were more likely than women to negotiate for what they want in employment situations, whether that be higher salaries, choice assignments, or time off.  Why do women do this?  The study found that

• Women are often are socialized from an early age not to promote their own interests and to focus instead on the needs of others.
• In many situations, women are “penalized” when they do ask (for example, being labeled as pitchy or pushy), which further discouraged them from doing so.
• Having become disenchanted with the situation, women tended to quit their employment situations, rather than use a better employment offer as a negotiating tool. 

Extrapolated to the entrepreneurial world, this hurts us in a number of ways:

• Not asking for referrals from satisfied clients
• Not raising our rates, even though our costs of doing business have increased 
• Not asking for business from networking clients
• Giving up, rather than developing a team of mentors or peers to help us find creative solutions. 

Julie Lenzer Kirk, who came across the angel financing report, thought that the top reasons women didn’t ask for this kind of help were:

• Women don’t like to ask for help (sign of weakness) or don’t know where to go for it.  
• Women start businesses for flexibility and control and resist outside assistance that might disrupt that.
• They don’t think BIG enough.  

What do you think?  What has helped YOU to think big?

One of the great things about the Digital Age is the ease of doing business online for entrepreneurs and small businesses.  Raking in great profits no longer requires investing in major real estate leases, huge inventory (and where would you PUT it?), or hiring extensive sales teams.  But operational simplicity does not necessarily equal legal simplicity.   

Has your Internet business put the right legal building blocks in place?  Do you have “Terms and Conditions�?  A privacy policy?  Do you know what they are or what should be included?  If not, march yourself right over to a good attorney’s office to find out – you can get in BIG trouble across the country, in places you never heard of, if you’re not careful.  And for a good overview about what to include in your legalese, check out Imke Ratschko’s “Pimp Your Site (with Legalese)� article! 

Here’s a terrific resource for you – and not just because I’m the guest expert for their monthly teleclass next week:  The Virtual Assistance Chamber of Commerce.  J  It’s not just for virtual assistants; their programs, columns, and forums can benefit all entrepreneurs who are in business by themselves.   I’ve entitled my teleclass “You’d Protect a Human Child, Why Not a ‘Brain Child’?:  Intellectual Property for Solopreneurs.�  Do you know the difference among different forms of intellectual property, like copyrights and trademarks?  What can you do if your materials end up on someone else’s website (or log) without crediting (or paying) you?  Listen in to this complementary teleclass, to be held on June 21, 2007 at 8pm EST.  Click here for more information and registration!

The official start of summer will soon arrive, and with it, millions of high school and college-age students available to help out in your business.  Your eyes sparkle with the thought of getting staffing help at reasonable rates (read: cheap labor), which can give your business the boost that it needs.  Good, cost-efficient idea, right? 

Not necessarily.  Using workers in your business without paying them could run you afoul of the Federal Labor Standards Act, which does not take a kind view of having people work for no pay (slave owners did that, remember?).    As the New Jersey Star-Ledger reported, there are six criteria that an internship needs to meet in order to be properly viewed as an internship and not merely as unpaid work:  ·         The intern must receive training similar to what he or she would receive in a vocational school

·         The training must be for the benefit of the intern

·         The intern must not be displacing a regular employee — in other words, doing a regular employee’s work

·         The employer has no “immediate advantage from the activities” of the intern

·         The intern is not necessarily entitled to a job at the end of the internship

·         Both the intern and the employer understand that the intern is not entitled to wages (although the student may be able to receive a stipend). 

And be especially careful if you are using workers under age 18.  To make sure you don’t violate federal and state human right laws, (1) make sure you are working with a reputable school program that understands the appropriate guidelines (don’t just pick up any ol’ student off the street), and (2) double-check with an attorney to ensure that you’re on the right path.

Many thanks to attorney Anthony Cerminaro’s BizzBangBuzz blog for bringing this tidbit to my attention.  This handy article, which appeared in Business Intelligence Lowdown earlier this year, lists 101 common sense management tips for entrepreneurs.  What floored me was that all 101 tips appear in the article (and not in a link to purchase a book for $197.00)!  :-)

Here’s eye-opening information from a recent press release: 

<<A recent survey conducted by BizBuySell, the largest online business-for-sale marketplace, found that nearly 75% of business owners doubted the effectiveness of hiring consultants to improve business reputation, preferring instead to do their own marketing without external assistance.  Of the survey sample, 68% of respondents said they had never engaged a consultant to help improve their business. Of those who had engaged consultants, 45% were moderately satisfied with the results. 27% felt the consultant did a great job for the business, while 24% regretted the decision to hire a consultant, stating it was a waste of time and money.>>  Wow!  Are you kidding me?  I found these numbers surprising because everything that I have been reading about business growth suggests (encourages! urges! demands!) that you not do it all yourself.  That to grow, your business needs a team, whether outsourced or in-house.  Why?  Because one person (or two people) can’t know everything there is to know about running a business and about running it well. 

I’ll use myself as today’s guinea pig.  When I emerged from law school, there was only one thing that I was taught well:  how to have the basic skills necessary to get a job as a lawyer.  Emphasis on get a job.  I was not taught how to start a law practice, how to market a law practice, how to network at events to get clients, how to handle the bookkeeping for a law practice, how to write in a language other than legalese, how to handle customer service, how to hire staff, how to grow a business, how to develop alternative income streams.  I learned all that on-the-job, once I made the decision to go into my own practice with my partner.  Quite frankly, there were plenty of times that I did a, ummm, less-than-stellar job.   So how did I learn how to do it right?  The same ways I learned everything else:  a mix of trial-and-error, and being taught by people who are doing it well.   

In my early years, I avoided consultants.  What could they possibly have to teach me? I wondered.  Truth was, at the time, it was a mask for being afraid of spending the money.  I wasn’t yet ready to acknowledge that I didn’t know everything – I saw that as a weakness instead of an opportunity for growth.  And I also couldn’t see that if I didn’t get help, I’d stay in exactly the same position . . . which was an unpleasant option.  Once I overcame that hurdle, I had to learn to discern which consultants really knew what they were talking about.  Oy!  Did I make some poor choices!  I can’t say the money was entirely wasted, for I did get a few things from their perspective (there’s always something to be learned from someone else) and I did learn from the experience.  But it took time (and a few bumps in the road) to get savvy about it, and to get a real sense of which consultants could really help my business grow.   

TIP:  Sometimes, it’s worth working with more expensive consultants, because they may be more likely to have the know-how to help you.  Find out if they’re on the speaking circuit.  See if they’ll divulge how much money they are making/how many clients they have each year from their consulting practices and products.  See who recommends them and in whose circles they travel.  That’ll give you a definite sense of whether they are successful at what they do. So, enough about me . . . and back to the survey.  It doesn’t make sense to hire a consultant just for the sake of saying you’re working with one (the way some people consider having a therapist as a status symbol).  But if you’re interested in business growth, you’re far less likely to achieve it totally by yourself.  And, I’d love to know whether the I-would-never-use-a-consultant business owners would be so eager to sell their businesses if they were really happy with the way they were growing! 

For more information –    About BizBuySell: BizBuySell (www.bizbuysell.com) is the Internet’s largest and most heavily trafficked business for sale marketplace, with more business for sale listings, more unique users, and more search activity than any other service. BizBuySell currently has an inventory of over 46,000 businesses for sale, and more than 975,000 user sessions each month. BizBuySell also has one of the largest databases of sale comparables for recently sold businesses and one of the industry’s leading franchise directories.  

Media Contact: Frank Krolicki
Walker Sands Communications
office: (312) 546-4127
email: fkrolicki@walkersands.com  

Threats to our business can take many forms:  natural disasters, like tropical storms, earthquakes, tornadoes, fire, or flood.  There are outside threats, like terrorism . . . or a sagging economy.  They are difficult enough to weather.  More insidious are the threats that we invite into our business with open, and unsuspecting, arms. 

Employees, visitors, vendors, clients – we welcome all of them into our premises.  If we’re not careful, they can cause some of the greatest damage to our network.  Check out this article, 20 Ways to Avoid Risk (part 3 of the series), from Computer Freedom to learn easy steps to protect your network and ensure you continue to get a good night’s sleep!