Small Business Advice from the New York Business Expo – by Cliff Ennico

I had the privilege of attending the 2012 New York Business Expo last week at the Javits Center in New York City.  This event, which grows bigger and bigger each year, boasted thousands of attendees and over 100 exhibitors with products and services designed to help small businesses and their owners.

As I do when attending any trade show, I look for the “little” exhibitors that are just getting off the ground.  Here is some advice from people who have “walked the walk” and are struggling to build a successful business in the icy crucible that is the Big Apple.

“You cannot project a professional image when talking on a cellphone.  There is too much background noise.  If you have a service business you still need a professional phone system with a message center and call forwarding technology that will tell people you are serious about your business.”  Danny Danny Lu, Seawolftech.com (provider of VOIP, SoftSwitch, SoftPhone and IP phone systems).

“Fail fast, fail often, and fail cheaply.  Technology is so cheap now you can throw a million things online at the same time and see which ones catch on.”  Nelly Yusupova, DigitalWoman.com (networking organization for women in technology).

“Text messaging is the wave of the future.  I mean, look at all the kids today.  To be successful, a small business has to learn to market itself in 140 characters or less using no vowels.”  Virginia Gudiel, Wordivate.com (mobile marketing solutions).

“If you’re buying a franchise, don’t be afraid of franchises that run their own ‘company stores.’  When franchises run their own stores, they are going through the same challenges you are, and are more likely to adapt quickly to market changes than those who don’t own stores.”  Bob Wenson, LittleCaesars.com (pizza franchise, competes with Domino’s).

“If you want to raise capital for a startup, worship your credit score, and make sure any credit card balances are less than 30% of the available credit on those cards.”  S. Colin Fraser, ColleenDwyer.com (finds loans for small businesses and entrepreneurial startups).

“If you want to impress a customer, make a BobbleHead or action figure of yourself and send it to them.  They will be a daily reminder of who you are, and they’re a lot harder to throw away than a business card.”  Stewart Barnett, AllBobbleheads.com (makes custom BobbleHead dolls for celebrities and business owners).

“There are five websites now for every man, woman and child in the United States.  If people can’t find your site, it’s not worth having one.”  Frank Holland, eZanga.com (search engine marketing consultants, and probably the only company in America named after a frog that committed suicide).

“Bend over backwards for your customer.  If his computer server breaks down at midnight, get out of bed, load a new one in your car, and drive it up to him so he’s back up and running the next morning.”  Robert Mulé, computerns.com (information technology network consulting and outsourcing firm).

“If you’re thinking of buying a fast-food franchise, don’t get caught up in trendy concepts.  Invest in something that’s going to be around for a long while.  Cupcakes are so yesterday.  Frozen yogurt was big in the 1980s, faded out in the 1990s, and is coming back again.  But burgers are forever.”  Marty Casey, Mooyah.com (franchise offering high-end burgers, fries and shakes, competes with Five Guys Burgers and Fries).

“If you’ve got employees working at remote locations, there’s a good chance they’re wasting time, running personal errands on your time, or otherwise goofing off on the job.  By tracking their location at all times, you reduce overhead costs and keep them on their toes.  When the cat’s away, the mice will play.”  Jason Gaines, LaborSync.com (GPS service that tracks employees’ time and location with their mobile devices).

“No one ever drowned in their own sweat, and no one ever died from eating too much broccoli.  Although some people get gas.”  Ellen L. Harnett, backtobasicwellness.com (diet and nutrition consultant and “digestive diva”).

“You need to get into the game of golf to be considered a member of the inner circle with your business associates, your peers, your boss.  It is there that rousting about and bumping shoulders with business associates, you will be seen as a real person, a new person to them and perceived as having more in common back in the office or in the industry. It’s the development of this kindred spirit among the players that in the business world leads to promotions, to big figure deals.”  Joan Cavanaugh, BoardroomGolf.com (golf instruction for executive and entrepreneurial women).

Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books.

Five Techniques to Keep Your Business From Being Sued (Part 2 of 2) by Cliff Ennico

(3)           Put “Disclaimer” Language In All Your Contracts and Business Correspondence.  Every document you suppliers, customers and clients sign is a legal contract.  Even some they don’t sign are legal contracts as well.  Make sure all contracts contain “disclaimer” language.

There are two types of legal disclaimer:  “warranty disclaimers” and “limitations of liability”.

Whenever you sell something, or perform a service for somebody, you make certain warranties about the quality of your work which will be legally binding if you don’t disclaim them.  Even if you don’t make any warranties about your work, the law will impose “implied warranties” enabling someone to sue you if they are not disclaimed.

Your disclaimer should clearly state that “except as expressly stated in this contract, the undersigned makes no warranty, express or implied, about the products supplied, the performance of services or any other matter.”  The disclaimer should be in boldface type clearly visible to the reader – burying the disclaimer in the contract’s “fine print” won’t help you.

A “limitation of liability” disclaimer says that even if you do make a serious mistake, all you have to do is give the client her money back, and you’re off the hook.  She can’t sue you for anything else.

Make sure your “limitation of liability” prevents you from being sued for “consequential and incidental damages.” These are “ripple effect” damages caused by your mistakes.  So, for example, let’s say you design and sew a dress for a client in the entertainment industry.  The dress falls apart during a television appearance.  Several audience members take cell phone pictures of the “wardrobe malfunction” and post them on YouTube.  The client’s reputation is ruined, she can no longer get work, late-night television show hosts are making her the butt of all their jokes, people are Tweeting that she is “the next Charlie Sheen”, her spouse divorces her, and she’s living in a diaper box under the Brooklyn Bridge.  If you have not specifically disclaimed “consequential and incidental damages,” you are liable for everything that has happened to your client if a court finds (as they almost certainly will, since you knew the client was a celebrity) that her damages were “reasonable and foreseeable”.

(4)            (Consider) Transferring Key Assets To Your Spouse or Other Family Members.  This isn’t for everyone, but if you’re just starting out in business you might want to transfer some key assets (such as your house or an investment portfolio) into the name of your spouse or another family member you trust.

Do not wait until someone is threatening to sue you to start selling your precious antiques for $1 each. The courts will not uphold a transfer if they think it’s a “fraudulent conveyance” being made solely to cheat someone.  But if you make the transfer before you’ve done anything to hurt anyone, it should stick.

If the transfer is to your spouse, make sure she is not involved in any way in your business.  Otherwise the two of you will be viewed as “partners” and a court will set aside the transfer.  Also, make sure you follow all legal formalities.  If you are transferring title to your house, record a “quitclaim deed” in the local land office.  If you are transferring personal property (such as antiques or cars), have your attorney draw up a “bill of sale” (similar to a deed for real property) and sign it before a notary.  Do all the things you would do if you were transferring the asset to a total stranger.

If the transfer is to someone other than your spouse, make sure the person changes his will so that the asset will come back to you if he dies.  Otherwise there’s a risk the probate courts will transfer the asset to someone other than you, or (worse) to you and your seven brothers and sisters as co-owners.

And remember . . . you are making a legal transfer.  If you and your spouse divorce, you will not only be without a spouse.  You will also be homeless.

(5)  Don’t Do Business With Crazy People.  I’m serious.  Whenever a client of mine is sued, one of the first things they say is “I KNEW IT!  I knew this person was going to be trouble!”  Your gut instincts should always be trusted – if a prospective client or customer behaves in an irrational or highly eccentric manner, or has a reputation of treating people unfairly, he probably is going to be trouble.

You are not legally required to do business with every Tom, Dick and Harry who calls you.  If you sense a potential client is a lawsuit waiting to happen, get rid of him.  Let him down gently and professionally, by saying something like “I’d really like to help you, but I’m booked solid for the next few months and I know you need this job done right away.”

Then . . . refer him to your toughest competitor.

Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books

Five Techniques to Keep Your Business from Being Sued [PART 1 OF 2] by Cliff Ennico

Without a doubt, hands down, the most common question I get from new clients is:  “Hey Cliff, I’m thinking of starting a business, but I’m afraid that if I make a mistake, someone is going to sue me, I will lose my house and my spouse will divorce me and take the kids.  How can I keep from getting sued when I run my own business?”

Just about every entrepreneur I come in contact with asks that question at some point.  And if they don’t, they really want to but are embarrassed to come out and say it out loud.

So here’s my answer, in two words:  you can’t.

That’s right.  There is no magic bullet that will prevent people from suing you.  If you foul up badly enough, and the other person has tons of money and loves to sue people, you will be sued.  America is a highly litigious country where everyone is entitled to their day in court.  Anyone can sue anybody else for just about anything, and the risk of being sued is part of the joy of running your own business.  You have to live with that.  If you don’t like that, go somewhere else where commercial disputes are resolved by kidnapping and shooting the offending party.

Having said that, there are some things you can do to keep the risk of lawsuits at a minimum — five things, in fact, that probably will reduce your risk of being sued by 95% or more.  By doing as many of these as possible, you are doing everything you possibly can to keep lawsuits at bay.  Here they are:

(1)           Form a Corporation or Limited Liability Company (LLC) For Your Business.  By doing this you put a “wall” up between your business assets (the stuff you use in your business) and your personal assets (everything else – your house, your cars, your kid’s college tuition fund and so forth).  With a corporation or LLC, if someone sues you they can still get to your business assets, but your personal assets should be protected.  Just be sure you treat the corporation or LLC with respect:  do all the required paperwork, file your tax returns promptly, and make sure every customer, client and other potential troublemaker knows they are dealing with a corporation or LLC, not you individually.

Specifically, you should make sure that:

  • your corporation or LLC name appears prominently on your business cards, letterhead, website, marketing materials and any other information about your business that you make public;
  • your corporation or LLC has its own checking account, that all checks are made payable to the corporation or LLC (NEVER to you personally), and that you deposit all business checks in the corporation’s or LLC’s bank account; and
  • be sure to include the corporation or LLC name and your official title when signing letters, checks, documents and anything else that may have legal effect – for example, “XYZ Corporation, by John Doe, its President”.

(2)           Get As Much Liability Insurance As You Can Afford.  Even with a corporation or LLC, your business assets are still open to attack in a lawsuit.  Also, having a corporation or LLC does not relieve you of personal liability for physical harm you cause other people.  If you hit someone with your company car, both you and your corporation or LLC will be liable.  So you still need insurance.

There are two types of business liability insurance policy: “commercial liability” and “errors and omissions” (E&O for short).

Commercial liability coverage protects your business against lawsuits from people who suffer accidents or injuries on your property (think of it as “slip and fall” insurance).  If you have a retail location or office space where you regularly see clients, you absolutely need commercial liability protection.

But what if you work out of your home and make it a point not to see clients there (a good idea, by the way)?  If you work out of a home office, your homeowner’s insurance probably will not protect you if a customer or client is injured on your premises.  You will need to purchase a “home-based business rider” to your existing homeowner’s insurance policy.

E&O coverage protects you from lawsuits arising out of your mistakes or breaches of contract (think of it as malpractice insurance for ordinary people) — for example, a construction contractor who uses substandard materials in building a house, a manufacturer who fails to deliver a key component on time for a client’s product launch, or an information technology (IT) expert who accidentally downloads a computer virus to a customer’s computer system.

Get as much liability coverage as you can afford – I usually recommend at least $1 million per occurrence and $3 million overall for my clients who have service businesses.  The premiums are deductible, and you will sleep better at night.

More next week . . .

Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books.

eBay Seller Protection Team LIVE today!

Today I have the pleasure of introducing Rich Matsuura and Ann Almeida of eBay’s Seller Protection team to my audience. Rich & Ann are eager to hear YOUR stories as an eBay seller and have you tell them what you need from them.

I am very encouraged with the amount of resources eBay is allocating to this team and the backing they have. As an eBay seller since 1997, I feel strongly that when eBay is listening, it is our DUTY to talk to them! So please come, and bring all your seller friends.

We will be live on Talkshoe on the Scanpower Channel at Noon EST today, October 22nd.

This PDF is a great explanation of the team and its mission.

eBay Seller Protections Flyer

And here is the wonderful Skit that the eBay Seller Protection Team did last year at the eBay Radio Party.

 

eBay Traffic Reports – Are Your Working?

Sellers at eBay are in an uproar lately.

What might be causing this, you ask?

Traffic reports, the graphs that help you understand your business better by being able to see how many page views and visitors you have each day, have gone down. These reports, provided by eBay and powered by Omniture, seem to have shown severe drops in traffic to sellers’ sites beginning back in August. Over the last month, however, the numbers continue to dwindle and eBay sellers everywhere began to be concerned that they were losing business. Sometimes with programs such as these, a glitch causes the whole site to have issues and it’s easy to see why sellers might have been concerned about a glitch. With continued sales to most sites, however, it’s easy to see that it is just a problem with the traffic reports themselves.

From her ecommerce bytes blog, Ina Steiner got in touch with eBay on Thursday and spokesperson Ryan Moore said “We have identified a technical issue with Omniture reports and are working to resolve it.” With everyone up in arms over the fact that they believed it was eBay who had a problem, leading to a drop in both traffic to the site and sales, it’s easy to see why eBay would want this handled as quickly as possible. On eBay’s system announcement board, they released a letter saying “While we are working diligently to correct this reporting issue, please be assured that actual traffic to eBay Stores has NOT been impacted…We are doing everything possible to restore this data as quickly as possible, and we apologize for any confusion this has created. We will update this post with additional information and an ETA on the permanent fix as it becomes available.” Something we’re all very happy to hear, I’m sure. Traffic reports offer us an indispensable service for our eBay sites and I know several sellers who might be lost without them.

 

Our question is, if this has been an issue since August, why has it taken eBay and Omniture until now to see and try to fix the problem? It’s unlike them to go so long without eliminating the issue. Perhaps they were just as lost as the rest of us as to the cause, or unsure as to whose fault it was. Whatever the case, we’re just glad that someone is doing something about the problem…assuming, of course, that they really are. Only time will tell.

What about you, fellow eBay sellers? Have you noticed this issue with your traffic reports lately? Has it caused you alarm? Let me know!

 

Who Needs A Job?

These are trying times for most Americans who are trying to find work. Odds are you know at least a few unemployed or underemployed folks who would jump at the chance for a position. One of my favorite companies, Amazon has recently announced that they plan to hire over 50,000 people to staff their fulfillment centers across the US for the holiday season. This is quite a massive number, but a very reassuring one for an FBA seller. Most of the jobs they’re hiring for are warehouse positions, and only on a seasonal basis, but Dave Clark, vice president of Global Customer Fulfillment, said that the company expects to keep on thousands of these temporary associates for full time positions. In their press release about the mass hiring, Amazon says that it “employs more than 20,000 people across its 40 U.S. fulfillment centers and pays its full-time, permanent employees 30 percent more than what traditional retail store employees earn—and that doesn’t even include the stock grants that full-time employees receive, which over the past five years have added an average of 9 percent to base pay annually.” Not too shabby! They also go on to boast more about the benefits their full-time workers receive (complete health package, stock options, etc) but I’m not sure why, considering they aren’t hiring for full-time employees. Either way, I’m sure they’re a great company to work for.

 

This announcement put a smile on my face for two reasons: Now as FBA sellers, we can rest peacefully, knowing that our goods will be processed and shipped just as fast as ever this holiday season (I wouldn’t even want to imagine how bad it could get if the company’s warehouses were understaffed during a holiday rush!) and I’m glad to see a company hiring so many people who might desperately need a job to bring the holidays…or even just a paycheck…home to their family this season. If that doesn’t warm your heart, I don’t know what will! Hope that by sharing, I’ve done my part to help spread the word. Let’s help some folks get work!

If you know someone who might be looking for work, you can refer them to: http://www.amazonfulfillmentcareers.com/.

Online Auction Site eBid Celebrating Big Numbers

I can’t say that I’ve ever personally used the online auction site eBid in years, but recently came across an article about them, and my curiosity was piqued, so I wandered over to check out the site. Have any of you ever used the site to list? The company boasts zero listing fees and zero final value fees for the life of your seller account, which is amazing, and the numbers they’ve put up since starting the company in 1999 are staggering, which I believe says a lot about them. There is over $5 Billion in merchandise for sale on the site and they have over 6.5 million live listings going on as we speak.  The site also boasts that they have almost 13,000 different categories of items available for purchase.

There are options available through the site are to buy, sell or have your own eBid store, and it seems very similar to the eBay site, although the setup seems a little easier to grasp for beginners. There is a link on the site comparing the two, so I clicked to see what the difference might be. The ratings for the two sites in fees, selling, buying, security and help available were just about even, so the only difference seems to be in the fees. I’ve enclosed the graph from the site itself so you can see how they stack up, but I must say eBid comes across a clear winner in value for the seller. Is it any wonder they have so many people selling on the site? I think not.

 The site is also one of Google Shopping Marketplace’s Partners, so your items will definitely have a bigger audience and hopefully, more traffic as a result. I couldn’t find much info on the numbers for actual traffic to the site but then again, eBay has been having some trouble keeping record of their sellers’ sites traffic lately, too. (here’s Ecommerce’s article on that topic)

 The site also offers to transfer your listings from eBay to their site for free. (no surprise there…that’s just good marketing strategy) I don’t know if I would jump the gun and transfer everything over to them, necessarily, as I tend to be a bit wary of sites I haven’t worked with before, but with no registration fee and no minimum listing fee, it might be worth it to list a few items and see how it goes. With the holiday season close approaching, a little more exposure for your business can never be a bad thing. Good luck!