Making It Legal:

Q: Is there is a way for one to tell whether or not one is personally liable for a business credit card?

A: If the card is in your name along with a company name and the credit card statements are addressed to the company, that c-o-u-l-d be an indication that the account is in the company name alone. But that still wouldn’t answer the question of whether there’s a personal guaranty underlying it.

The best way to check is just to call the credit card company and ask. And see if it will provide you with a copy of the initial credit agreement that you signed. In the future, make sure you keep a copy of all credit card applications so that you know for sure.

 When the going gets tough, the tough take a close look at how they handle their clients and customers. Who’s generating a less-than-fair fee for you? Who makes you cringe when you hear their voice on the other end of the line? Who’s always finding a way to drag out the payments? Yes, there is something worse than having no work to do. It’s working your butt off for someone who doesn’t appreciate your talent and stiffs you for the fee.

But the problem isn’t just with the annoying client. As the old cartoon character Pogo famously said, “we have met the enemy and he is us.”  Where can we take some responsibility for how we’re handling our clients?

We can start by looking at where some of our client relationships went awry.  As I mention in my article, “Isn’t It Time You Kept 100% of Your Fee . . . Every Time?” on WomenandBiz.com, make the time to write down all the different causes of client dissatisfaction.  This could include:

• The price being higher expected
• The project becoming more involved than expected
• The client not getting the desired results
• Your lacking the right expertise for the assignment
• Snags in communication, as when dealing with more than one representative of a client
• Lack of clarity about the payment terms (e.g., if you are working on an hourly rate)

If you can identify what’s broken, you can take steps to fix it.  Yes, even in this economy.

 Does this sound like you: “I’ll just work harder and sell more stuff/get more clients. That’ll turn my financials around.”

Well, as Jay Goltz says in his FSB article, “Why Small Businesses Fail,” working harder won’t fix a broken businesses model.  You’ll either face burnout, or worse, a bevy of legal headaches resulting from your inability to pay vendors, employees, and other creditors.

As frustrating and daunting as it may seem, “every business owner needs to be his or her own CFO,” says Goltz.  But how do you know what to look for?  How can you make more informed decisions?

One way, certainly, is to hire a CPA or CFO to help you interpret the numbers (and educate you in the process so that you know what you’re looking for).  Another, suggests Alan Badey, in his New York Enterprise Report article, “Uncover What Your Numbers Say About Your Business,” is to create a basic business dashboard so that you can see and analyze the numbers that substantially affect your bottom line.  These include:

• Using existing technology and systems
• Determining which areas/data are most valuable to track
• Comparing numbers not only month to month but year to year
• Sharing data with key employees

Your dashboard will help you better forecast and budget–and can help catch fraud, Badey writes.

This economy has certainly battered my business around a bit. There are times I’ve felt like a ship in a storm-tossed sea. But I have been able to stay on a relatively even keel and keep my sights set on my destination, thanks to my advisory team.

“Advisory team.”  It’s a highfalutin’ term for what some people consider good friends who will be a sounding board for you in a pinch. Whether you pay them or you don’t, have formal arrangements with them or not, they are crucial in one major respect: You can’t build a successful business without them. 

I’ve learned from personal experience that I really flourish when I have others helping me keep my eyes above the dashboard, making sure I keep working toward my strategic goals. Without them, I’ve gotten stuck in my own mishegaas, like a dog chasing its tail. I have people I’m accountable to (other than me, my own worst taskmaster). People to keep me focused so that I don’t spread myself too thin. People to share the victories with. Two who come to mind are Dawn Fotopulos of SmallBusinessHow2.com (”simplify, focus and leverage” is her mantra for me) and Rochelle Lisner of DynamicBusinessGrowth.com (who reminds me to “speak in stories” not “information dumps”). And there are more!  I wouldn’t be where I am without them.

You can build a dream team of your own, too! For tips on how to do that, sign up for a complimentary copy of my Entrepreneur’s Business Law Primer, available at GreatBusinessLawResources.com/bizlaw. It includes an audio clip on “how to choose an advisory team” that I think you’ll find helpful.  Let me know if you do!

With the July Fourth holiday upon us, what are you doing to declare your independence? Have you found ways to streamline your business so that you’re not enslaved to repetitious drudgery?

One of the best-known phrases from the Declaration of Independence reads:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Does your business bring you joy, as well as profits? Does it bring excitement to your life (the positive kind, not the anxious kind)? Are you counting each one of your daily victories? I tend to lump them all together, as in “I wrote blogposts today,” and then say that I accomplished only one thing.  But there are many other successes embedded in that single one:

• Each blogpost written is a single victory.
• Each colleague whose blog I tracked back to is a colleague whose relationship I strengthened.
• Each subject I spend time reading and researching is a quest for knowledge.
• As I love writing, the time I spent writing is time I spend in a task that I enjoy.

Speaking of profits, one way to ensure that you’re not enslaved to the drudgery of collection calls is to find and mind clients carefully. Are you taking on any client with a pulse? Have you told clients in no uncertain terms what your rates are?  If not, you’re at risk of staring down collections nightmares. Check out my program How to Train Your Clients to Pay You and put an end to the long days and sleepless nights!

Here’s hoping that happiness pursues you this holiday weekend . . . and throughout your business!

One of the key components of a strong business is making sure you always have “stuff” in the pipeline. As we move into summer and the (theoretically) warmer weather, there are lots of delicious options for networking. Outdoor terraces, harbor cruises, events in public parks–they’re a wonderful way to enjoy a bit of natural beauty in a more relaxed setting, while keeping your foot on the gas, so to speak.

Especially while the economy is a little shaky, networking intelligently can ensure that people remain interested in you.

How can you do that? According to Liz Lynch, author of Smart Networking and the Smart Networking Blog, people will be interested in you when you tell then what’s in it for them.

Let face it: As human beings, we’re hard-wired for survival. And we love stories. As Lynch points out, if you’re able to combine the benefits of what you do (which enhances the other person’s “survival”) and can do so with examples (stories), you’ll go a long way to making–and keeping–solid connections.

As those of us employees-turned-entrepreneurs know, life is full of risk. Yes, we could have stayed at our (theoretically) secure jobs, continued to make predictable sums of money (again, theoretically) and known what was expected of us. The risk, though, was that we would stagnate–as workers, people, souls. Or get laid off and thrown back into a predictable world.

So we took the leap of faith and started our own companies. We faced more risk–financial risks, legal risks–but we felt the trade-off was worth it. As we make changes to our business, different risks will arise. Some we can anticipate. Some we’ll evaluate as too remote to worry about. When you start to expand your business–such as with strategic alliances–new issues will arise. Can you withstand the risk?

As in the Three Little Pigs fable, you want to be sure your business has a strong legal foundation so that if a “wolf” (disgruntled customer, irate business partner) huffs and puffs, your house won’t blow in. What are some of the things that could blow your “house” in, if not handled properly?

• Operating as sole proprietor in the face of a lawsuit
• Not having a written agreement with your business partners–whether in your company or in an alliance
• Doing business on a handshake
• Inadequately protecting your company information or intellectual property
• Insufficient insurance (especially if you have employees)

There are many areas that can leave your company vulnerable . . . many of which can be easily rectified. For more guidance on the potential risks to keep an eye on, I’ve created a handy tool, Is Your Business Legally Healthy?, available through my GreatBusinessLawResources.com site. It’s an easy-to-follow questionnaire. Because it’s self-scoring, you’ll know right away if your company is thriving or slowly succumbing to an unidentified illness.

I saw the film The Rocker on PPV last weekend (if you’re a Spinal Tap fan, I think you’ll enjoy it . . . and the music kept my toes tapping). In addition to underscoring the power of YouTube (ya gotta see it!), the film got me thinking: When it comes to networking–and building a community of suitable potential alliance partners–are you a rock star or an opening act?

That’s the dichotomy Seth Godin raises in his recent blog post, “Opening Acts and Rock Stars” Are you trying to cast as wide a net as possible, hoping for any possible fish? When someone asks you about your target market, is your response, “Oh . . . anyone, really”?(I actually had a self-proclaimed sales guru say that to me!).

Or are you creating a solid foundation of small groups–communities–of loyal fans who will help spread the word?

You’ve reached a point where you’re ready to tear your hair out. You’re pulled in 17 different directions and, try as you might, you haven’t found a way to manufacture the 28-hour day. Much as it’s daunting, you’re staring down an inescapable fact: In order to grow your business, you . . . need . . . staff. But what kind? In-house or outsource? Full-time or part-time? Hourly or project-based?

Part of that decision you’ll base on the cost. Here are some of the pros and cons of the different options, nicely outlined by Linda Coleman at BizTaxTalk.com (Note: She looks at it from the perspective of the worker choosing how to be hired):

Employee:
Pros: Always at your beck and call/dedicated work force

Cons: You pay for the privilege with employment taxes, benefits and increased risk of employment liabilities (discrimination suits, employee theft, time for supervision and training)

W-2 “Consultant” (someone hired out to you by a broker or third-party service):
Pros: Can get full-time staff without the need to offer benefits (the broker may do so); mitigates the risk of IRS penalties for choosing the wrong employment category

Cons: You pay a higher fee to the employment broker who provides you with the employee; cost could be prohibitive<

1099 Sole Proprietor:
Pros: You only pay for what you need when you need it; no need to account for employment taxes/withholding or benefits

Cons: Big risk that the IRS (and state tax authorities) will consider your 1099 proprietor an employee and thus subject you to penalties and interest for late taxes–even if you have an agreement stating that the worker is an independent contractor (the IRS will disregard form over substance)

Independent Contractor (B2B):
Pros: By hiring a corporation or LLC to provide the services you need, you can avoid getting caught in the employee/contractor “net”; no need to account for employment taxes/withholding or benefits

Cons: Independent contractors are independent businesses with their own client base; service may not be immediate.

Like this is news? But it seems that some employees just don’t get it (no pun intended). A recent 2^nd Circuit case, Patane v. Clark and Fordham University, held that even viewing porn in one’s office (a somewhat private place) is a no-no. In Patane, Professor Clark watched hard-core S/M tapes on the VCR in his office, left tapes scattered on the floor and had new purchases shipped to the office. His poor secretary, Patane, could see the smut through the glass partition of the office, on the floor when she entered his office, and when opening his mail (which was part of her job). The final straw was when Clark started to use her computer for porn access. The court held that “the mere presence of pornography in a workplace can alter the status of the environment for women . . . and is relevant to assessing the hostility” of the workplace.

If you have any questions about whether porn is legally permitted at work, let’s make it as simple as . . . green eggs and ham.  Here’s my initial stab at a no-porn company policy:

We want no porn behind closed doors
We want no porn left on your floors
Don’t put it on an iPod
Or camera with a tripod
We are not a company of boors

Do not surf porn for play
At any time of the work day
To your co-workers do not avail
To your friends do not e-mail
Or lose your job you certainly may

Steps to take when facing the presence of porn at work:

• Don’t put up with it.  Reaffirm the anti-harrassment policies to all employees.  Be vocal and visible in your enforcement of the policy.
• Prevent it from coming into the workplace.
• Keep an ear open for office gossip about who’s displaying it (”Did you see the pictures on Jim’s computer! What was that, a ZZZ-cup?”)
• Install appropriate firewalls and filters to prevent pornography access on workplace computers
• Lead by example.

Remember that when you have an awkward work environment, you’re not just at risk of a lawsuit. Porn is a huge contributor to loss of employee productivity . . . which means a less efficient (and profit-making) business for you.

Because “one size does not fit all.” And because “you get what you pay for.”
In “a whopper of a sexual harrassment claim” (thanks to blog author Jon Hyman for the turn of phrase I couldn’t resist), the case of EEOC v. V & J Foods, Inc., a Burger King franchise had an employee manual that outlined the procedures to be followed in a sexual harassment grievance. However, the policy was written in a convoluted and confusing manner and–significantly–provided no way to bypass a harassing supervisor. When a part-time teenage employee ran into a problem with her supervisor, she didn’t follow the grievance procedure in the manual.

The Seventh Circuit Court of Appeals didn’t care that she didn’t follow the proper procedure. The employment manual wasn’t clear to the average employee (in this case the average employee would be a teenager or high school graduate). In fact, the court found that the complaint procedure was confusing even for adults and, as a result, the grievance process was unreasonable.

The issue for your employment manuals is that they need to be clear and easily understood. If you do download them from the internet, make sure you show them to your attorney in order to demystify the boilerplate and insert the right provisions for your business. Otherwise, you could end up with a document full of policies and procedures that no one is required to follow.

Between paper and pixels, the amount of information that one company has to retain can become staggering. Plus, like Arthur Anderson, if you shred (or delete) information that you should have retained (or you’re destroying because you were just named in a lawsuit), that fact can be held against you in court.

There’s a way around that. You can implement a routine document retention (and destruction policy) that governs how and when you can destroy documents. If you set the policy and implement it routinely before there’s litigation on the horizon, you can protect your company.

For a free white paper that looks at what to retain and for how long, go to theHRSpecialist.com/