BizzBangBuzz by deal attorney & business lawyer, Anthony Cerminaro: November 2005

11/30/2005

Tips for that first VC Meeting

Ed Sim offers these tips for the first VC meeting:

"1. Be flexible...
2. Have a well-honed elevator pitch...
3. The Slide Deck: make it short and sweet, 15-20 slides will do...
4. Listen and ask questions: try to get feedback about your business and the opportunity...
4. The Demo...I like them live, but...there are 20 things that can happen in a demo, 19 of which can go wrong. So be prepared and have a cached version of your service to walk through.
5. Next steps: In any meeting, never forget to ask about the next steps...

A couple of other points to add:
Pre-meeting: Research the VC...

A couple of don'ts: don't be late, don't be arrogant, and don't ask for an NDA before you start the pitch."

BlawgWorld 2006 free eBook Published

According to various studies, approximately 80,000 new blogs launch every day, including dozens of legally-oriented "blawgs." No one knows how many blawgs exist, but whatever the number, monitoring them would amount to a full-time job. For this reason, the folks at The TechnoLawyer Community have published BlawgWorld 2006, an eBook designed to take you on a journey through 51 of the most influential blawgs.

To receive your free copy of BlawgWorld 2006 visit http://www.blawgworld.com and register at no charge.

Business Help for Veterans

There are 25 million living Americans veterans - all having proudly served our country. When their tour of duty ends many dream of becoming business owners. And the US Small Business Administration can help.

In the November edition of SBA Solutions, discover what resources and finance options are available to vets. Plus, tips for anyone starting a business. Also visit the SBA's Office of Veterans Business Development that formulates, executes, and promotes policies and programs to assist veteran entrepreneurs for more about the resources and lending programs designed especially for veterans.

Hollywood Slanguage

"Dealing with Hollywood? Variety's Slanguage Dictionary can demystify the industry lingo and make it possible to translate its articles into English." Please access this IPTAblog article for a link to the Slanguage Dictionary.

How to Conduct an Employee Exit Interview

Good article from Post Money Value on the proper way for a technology company to conduct an employee exit interview. Hightlights include:

1. Do the interview yourself until you hit 100 people...
2. Say Thank You.
First words spoken at an exit interview. Thank you for working here and contributing, all of us appreciate it. And mean it. Say thank you.
3. If a re-hire, then give them a priority ?come on back? pass...
4. Free software/services/equipment for over X number of years...
5. Keep a connection...
6. Respect...
Respect will get you armies of people you aren?t paying for, perspective you probably need, and help you won?t have to ask for...Good people move on for lots of reasons and assuming bad stuff wasn?t the prime reason, it makes good sense to retain some value in that relationship."

Free Materials, Articles and Ideas from Businessballs

Businessballsis a free online self-help, and training and development resource for people and organizations, run by Alan Chapman, in Leicester, England. The site features "free materials, articles, and ideas for ethical personal and organizational development, compassionate leadership, self-help and self-fulfillment...for learning, self-help and for helping others, and for bringing more compassion and humanity to organizations and beyond."

Are Entrepreneurs Just Born That Way?

"Passion. Vision. Focus. Courage. Will. These are just a few signature traits of successful entrepreneurs. But where do these traits come from? Are they hard-wired into our DNA or acquired over time, like wrenches in a toolbox?

Thomas Harrison, a former cell biologist turned marketing guru...concurs that there are indeed born entrepreneurs, he concedes that others may have latent traits, which can be teased out and developed by using the eight techniques described in his book.

Are you in the lucky gene club? Find out by taking this entrepreneurial personality quiz [from Forbes.com] , adapted from Harrison's book. The 30 questions are geared toward measuring five broad aspects of personality: openness to experience, conscientiousness, extroversion, agreeableness and neuroticism. Just choose an answer for each question, and check the results when you're done."

Seven Deadly Founders' Sins

David Beisel compiled this list of the Seven Founding Sins ? common mistakes which often divert entrepreneurs off the path towards success.

"Inauthenticity...A founding team should not only have the relevant experience, but also immediate and authentic understanding of the end-users?/customers? need...

Sloth...founding a company is not a full-time job. It?s a full-time life...

Extravagance...employees treat resources with the same respect that those in power do.

Taciturnity...Founders need to ensure that all of the constituents who are involved in making the company a success...are regularly updated....

Greed....

Arrogance...Founders must realize the limits of their abilities and seek help/input when others on the team are more informed or in a better position to make decisions...

Indecisiveness...In the end, tough choices are indeed tough, founding entrepreneurs need to make them..."

Read more in this Genuine VC post.

A Thanksgiving Prayer

gratitude
Originally uploaded by TigerTigerTiger.

"O God, when I have food,
help me to remember the hungry;
When I have work,
help me to remember the jobless;
When I have a home,
help me to remember those who have no home at all;
When I am without pain,
help me to remember those who suffer,
And remembering,
help me to destroy my complacency;
bestir my compassion,
and be concerned enough to help;
By word and deed,
those who cry out for what we take for granted.
Amen."

by Samuel Pugh

Forecast Early and Often

"Forecasting is a pain, so we adopted the model of as 12-month rolling forecast with quarterly reforecasts (and correspondingly quarterly incentive comp structures) out of necessity. For early stage companies in emerging industries, there are simply too many moving parts in the business to provide enough visibility to produce an accurate 12-month budget. There are really four factors at work here:

- Investment...
- Competition...
- M&A...
- Recurring revenue: for any business that has a recurring revenue model, missing your numbers in a given month or quarter makes it nearly impossible to get back on track for the rest of the year since next quarter's number depend on making this quarter's numbers...."

So forecasting early and often is a great solution to this problem, and it's a particularly effective tool to keep the team motivated. Read more in this Matt Blumberg post.

How to Compute a Reasonable Royalty Rate

"Among the most frequently asked questions I get from start-up companies is: How much should I pay for licensing in a technology?...While most companies seem to use a valuation method I like to call "pulling a number out of the air," there are three primary methods used by licensing professionals to assess the value of IP assets. These are the Cost Method, Market Method and Income Method. With all of these methods, good data and data projection are critical in determining the appropriate numbers.

In the Cost Method, the value is the cost incurred in developing or purchasing the relevant technology or intellectual property....
In the Market Method, the method for determining value is to learn what comparable technologies have licensed for recently....
In the Income Method, value is the estimated revenues the technology is likely to produce (and savings it is likely to generate) and comparing this to the estimated cost to generate the same revenues or savings from other sources, that is, total annual returns. Basically, it's a method of determining what you can afford (or not afford) to pay in the end..."

Read more in this Patent Baristas post.

Executive Summaries of Management Issues

For a limited time, you can access the dozens of 10-12 page executive summaries from this TEC webpage. These roughly 10-page summaries provide excellent overviews of many pressing issues facing business owners and executives today.

Online Version of Uniform Commercial Code (UCC)

The Cornell Law School Legal Information Institute offers this online version of the Uniform Commercial Code stating:

"This on-line version of the U.C.C. does not include the official comments...For the U.C.C. as enacted by a particular state and proposed revisions to articles click here"

19 Ways to Raise Money for Your Business

To help you get your head around the different ways you can finance the growth of your business, Entrepreneur.com has compiled these mini-guides to raising money that cover basic information on the following 19 different financing sources.

1. Start-Up Financing
2. Equipment Leasing
3. Community Development Financial Institutions (CDFIs)
4. Microloans
5. Asset-Based Loans
6. Bank-Term Loans
7. SBA-Guaranteed Loans
8. Private Loan Guarantees
9. 504 Loans
10. Royalty Financing
11. Federal Government Venture Capital
12. Angel Investors
13. Electronic Matching Services
14. Business Incubators
15. 401(k) Financing
16. Direct Public Offerings
17. Reverse Merger
18. Initial Public Offering
19. Institutional Venture Capital

Kauffman eVenturing Coming Out

"After about a year in the making, our site Kauffman eVenturing is ready for its public coming out party! The site is designed for busy entrepreneurs, and is well on its way to being packed with relevant, practical and timely information on how to manage and expand your business.

We will offer original articles, written by entrepreneurs drawing on their own experiences, and an in-depth aggregation of the 'best of the best' existing articles and tools to guide you on the path to high growth. The site will cover many topics organized around six key subject areas:

Finance & Accounting
People / HR
Sales & Marketing
Products & Services
Operations
The Entrepreneur "

IRS Puts Early Stage Company Valuations in Focus

"Recent tax law changes have put increased focus on private company common stock valuations. This new law, IRC Section 409A, applies to "discounted" stock options (options having an exercise price that is less than the stock's grant date fair market value), and imposes significant penalties on noncomplying awards. This puts private companies under increased pressure to be able to support and defend their valuation determinations. Proposed regulations issued in connection with the new law set forth protective presumptions on which private companies may (and should) rely in making valuation decisions."

The Heller Ehrman Venture Law Group has prepared and assembled these private company valuation materials including a summary of principles useful in valuing early stage companies, that will be helpful to companies as they adjust to these developments.

Thanks to my colleague, James Cummins, for the link.

Yale Stuns Duke with Last Second Goal

"There are games where the final score sums up all you need to know.

And then there are games where a simple tally of goals or points is woefully inadequate, like reducing Bob Dylan's songs to notes on a sheet of paper.

The scoreboard shows that Yale upset No. 3 seed Duke 2-1 on Sunday to advance to the third round of the NCAA women's soccer tournament. But those numbers reveal little about one of the most dramatic endings in the tournament's history. Like saying the Los Angeles Dodgers beat the Oakland A's 5-4 in Game 1 of the 1988 World Series or Colorado beat Michigan 27-26 on the gridiron in 1994, the score alone deprives those were weren't on hand of an amazing story.

Anyone in attendance on Sunday won't soon forget the game's frantic final seconds, culminating in Yale senior Laurel Karnes putting the ball in the back of the Duke net with just one second remaining..."

Read more in this ESPN.com piece. Thanks to darling daughter for the link to this great article.

Issues in Technology Company Mergers & Acquisitons

This article by Jaqueline A. Daunt provides an excellent overview of the issues facing technology companies that are either looking at being aquired as an exit strategy or are seeking to grow through acquistions, stating:

"A recent survey showed that between two and five emerging technology companies (TechCos) are acquired for every one that does an initial public offering (IPO). Acquisitions can provide strategic, operating and financial benefits to both TechCo and the company acquiring it (LargeCo). A strategic acquisition can provide TechCo's shareholders with earlier liquidity than an IPO, with less risk and dilution. It also can provide TechCo with the immediate leverage of LargeCo's established manufacturing or distribution infrastructure, without the dilution, time and risk of internal development.

A strategic acquisition can provide LargeCo with the new products and technologies necessary to maintain its competitive advantage, growth rate and profitability. Ill-conceived or badly done acquisitions, however, can result in expense and disruption to both businesses, the discontinuance of good technologies and products, employee dissatisfaction and defection, and poor operating results by the combined company. By understanding the key factors that lead to a successful acquisition, TechCo and LargeCo can improve the probability of achieving one."

Break-Even Analysis

"For any new business, you should predict what gross sales volume level you will have to achieve before you reach the break-even point and then, of course, build to make a profit. For early-stage businesses, you should be able to assess your early prediction and determine how accurate they were, and monitor whether you are actually on track to make the profits you need. Even the mature business would be wise to look at their current break-even point and perhaps find ways to lower that benchmark to increase profits. "

Read more in this article from businesstown.com.

In Flanders Fields

Poppies
TigerTigerTiger.

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved, and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

"The poem 'In Flanders Fields' by the Canadian army physician John McCrae remains to this day one of the most memorable war poems ever written. It is a lasting legacy of the terrible battle in the Ypres salient in the spring of 1915.

The most asked question is: why poppies?

Wild poppies flower when other plants in their direct neighbourhood are dead. Their seeds can lie on the ground for years and years, but only when there are no more competing flowers or shrubs in the vicinity (for instance when someone firmly roots up the ground), these seeds will sprout.

There was enough rooted up soil on the battlefield of the Western Front; in fact the whole front consisted of churned up soil. So in May 1915, when McCrae wrote his poem, around him bloodred poppies blossomed like no one had ever seen before."

Find much more on this poem and its author here

For those who would wish to pray for veterans, here is a short prayer

Please God take care of all the Veterans.
Look out for them and watch over them.
They protected people and strived to keep them safe.
Thank you.
Amen.

10 Points on IP Portfolios

"IP has become fully integrated within the fields of art, science, commerce and law, yet understanding the overlap and implications of this integration can be challenging. As a basic primer, here are 10 things you should know about IP portfolios:

1. There Are Different Types of IP and Associated Protections...
2. IP Rights Can Overlap...
3. Just Because You Have a Patent, Doesn?t Mean You Can Practice the Invention...
4. It Can Be Expensive to Procure and Maintain IP Rights...
5. It Can Also Be Expensive to Ignore Other?s IP Rights...
6. Getting the IP Right Is Only Half of the Equation; You May Need to Enforce the Right...
7. Choosing an IP Practitioner Is a Significant Decision...
8. IP Rights Are Not a Requisite for Commercial Success, But They Can Be of Great Help...
9. Valuation of IP Rights Can Be Difficult; Know When to Hold ?Em and Know When to Fold ?Em...
10. Common Sense Is Underrated When Developing IP Portfolio Strategy..."

Read more in this Goodwin Procter article from Mondaq (free registration required).

Mind Your Own Business

Mind Your Own Business is a website "where you can find the links to turn your entrepreneurial dreams into reality. Created by the U.S. Small Business Administration and Junior Achievement, this site walks you through five easy steps of business ownership - whether you've just had a brainstorm for your first business venture or you've been at it a few years.

So go Mind Your Own Business, and find out about the challenges and rewards of being an entrepreneur."

Start Up EPA Offers Assistance to Bay Area Entrepreneurs

"East Palo Alto Micro-Business Initiative, which does business as "Start Up," is a private, nonprofit organization whose mission is to promote economic development in and around East Palo Alto, California, by providing training, capital, and other assistance to help establish and support locally-owned and operated small businesses...Start Up graduates own and operate a number of successful enterprises. Most of these start out as home-based, part-time income supplement streams but may go on to be full-time self-employment resources for the entrepreneurs and their employees."

Among the many business resources that are accessible from the website is this step by step guide to creating a business plan.

Work For Hire Agreements Prevent the Unexpected

"You should be greatly concerned about who owns the work you specially commission. For example, unless there is a special kind of agreement in place before any work begins, someone who contributes material to your new book or web site can, in theory, sell that same material elsewhere without your permission. Worse still, if there is no written agreement, and you want to adapt that material, or publish it elsewhere, you will probably need that person's permission.

Similarly, if you hire someone to illustrate one of your short stories, unless there is a written agreement that says otherwise, you may be surprised to learn that the illustrator has become your coauthor. These seemingly odd results follow from the fact that under copyright law, authors are presumed to own the copyright in the works they create. The best way to avoid these problems is by having a written agreement in place before any work begins."

Read more in this article by Attorney Lloyd J. Jassin.

Take Me to Your Google

"Paul Graham, an essayist and programming language designer, has an interesting essay about the 'venture capital squeeze.'

To summarize, he says VCs have found themselves in competition with acquirers, with Google first on the list. Companies like Google have realized they can acquire a company early, and bypass venture capitalists. Graham proposes VCs, in response, should let entrepreneurs partially 'cash out' early, so that the entrepreneur's interests are aligned with the long-term huge results that VCs crave. "

Read more in this SiliconBeat summary article or read the Paul Graham essay The Venture Capital Squeeze.

The Deming Plan-Do-Check-Act Cycle

"W. Edwards Deming in the 1950's proposed that business processes should be analyzed and measured to identify sources of variations that cause products to deviate from customer requirements. He recommended that business processes be placed in a continuous feedback loop so that managers can identify and change the parts of the process that need improvements. As a teacher, Deming created a (rather oversimplified) diagram to illustrate this continuous process, commonly known as the PDCA cycle for Plan, Do, Check, Act*:

PLAN: Design or revise business process components to improve results
DO: Implement the plan and measure its performance
CHECK: Assess the measurements and report the results to decision makers
ACT: Decide on changes needed to improve the process "

Read more in this balanced scorecard article.

Startup Resources

This list of articles and links from MIT Professor Hadzima is worth exploring for useful information about organizing and operating an entrepreneurial enterprise.

A Technology Entrepreneur Guidebook

Reprinted below are the major topics covered in the Technology Entrepreneur's Guidebook (pdf). I draw your attention in particular to the "Accounting Policies" and "Legal Issues" sections that provide good overviews of basic issues.

Entrepreneurship
A Sensible Approach to Writing a Good Business Plan
Raising Venture Capital
Accounting Policies and Procedures for Early Stage Companies
Legal Issues for Early Stage Entrepreneurs
Managing Explosive Growth in Technology Companies
Choosing an Exit Strategy

If You Have Died, Call....

Did I hear this correctly? During last night's football game, I swear I heard a lawyer advertisement seeking potential plaintiffs for pain patches gone wrong state,
"If you have suffered serious injury or death, please call...."

Won't this be difficult for the deceased to do?

Let Your Passion Lead the Way

Some interesting observations from The Lazy Way to Success:

"When you start a business, what must lead the way should be your own interest in or love for whatever it is you want to do. Loving what you do miraculously attracts all the necessary resources, people and opportunities....Your passion doesn’t have to be about any particular product or service. For me, my passion is the process – building teams, collaborating with others, wrestling with creative challenges, supplying customers with value, entertaining paradigm-shifting ideas, dreaming of the potential for fast growth, and being socially responsible to all the stakeholders, not to mention Mother Earth. I am passionate about those things, so if all those elements are present, then it doesn’t make a lick of difference if the end-product is ice cream or telecommunications...or whatever."

Deal of Lifetime

The purchase of a residence may be the single largest transaction in which most individuals will ever be involved. For an entrepreneur or small business owner a similar statement can be made about the buying or selling of a business. In short, it is often the deal of a lifetime.

Legal considerations affect even the most basic aspects of such a transaction. For example, the risk of assuming unwanted environmental or employee benefits liabilities may rule out a particular structure for a transaction or prevent the transaction from going forward at all. Consultations between client and counsel at an early planning stage are essential to (1) close the deal in a timely manner, (2) ensure a smooth post-closing transition, (3) avoid surprises about the value of the business, and (4) avoid the assumption of unwanted or unknown liabilities. Read more....

[I am posting a link to an earlier article I wrote to demonstrate a workaround to the Blogger "read more" problem.]

Seven Steps to Career Growth and Excellence

"Achieving excellence in our work is an integral part of feeling genuinely satisfied in life. We want our careers or businesses to blossom, making us financially secure and content with our achievements. Here are seven stepping-stones that lead to career growth and excellence. When used as part of a total action-plan, these stepping-stones can contribute tremendously to the fulfillment that you desire.

1. Make a Commitment to Excellence...
2. Empower Yourself and Others by Continuing to Learn...
3. Multiply Your Efforts through Networking...
4. Communicate Powerfully...
5. Lead with Empathy...
6. Maintain Physical, Mental, and Spiritual Fitness...
7. Serve with Love, Faith, and Gratitude..."

Read more in this article by Steve Brunkhorst for the National Business Association

E-Signatures 101

"Federal and state e-commerce laws provide that electronic contracts and signatures cannot be denied enforceability solely because they are electronic. Electronic records must satisfy similar requirements to their written counterparts so that the enforceability of a record or signature remains valid despite its electronic form. "

For more on the basics of electronic signatures, see LeapLaw's Ledger, November 2005.

Small-Business Employment Law Guide

You may download from this NFIB website:

"A free publication from the U.S. Department of Labor [that] helps small-business employers understand their rights and responsibilities under federal employment laws. The Employment Law Guide summarizes DOL's most widely applicable laws.

The guide describes statutes and regulations administered by DOL that affect businesses and workers. Each law has it own chapter organized by the standard discussed, such as wage and hour, health and safety or retirement. Within each chapter, sections describe which employers are covered by a certain statute, the basic requirements of each statute, employee rights, opportunities for compliance assistance, sanctions or penalties for non-compliance and correspondence to other federal, state or local laws. To give users a better understanding of each law, chapters link to the statute discussed as well as to interpretive materials and other regulations.

The guide is written in plain language, not legalese. It focuses on giving employers introductory information to help them develop wage, benefit, safety and health and non-discrimination policies for their businesses. The guide gives information to businesses, particularly new businesses, about which DOL laws most likely affect them. An overview describes the most applicable laws and covers three categories: generally applicable regulations, federal contractor regulations and industry specific regulations. "

The Encyclopedia of Small Business

Check out the Encyclopedia of Small Business site that is, well, an encyclopedia of small business terminology.

What Do VCs Really Look For?

Many articles have been written about the criteria venture capitalists use in selecting companies in which to invest. This article from Entrepreneur.com is one of them that stresses the latest information received from a recent gathering and is well worth reading in its entirety. A couple of nuggets follow:

"Business Model. Will the numbers map out? In other words, once someone takes a sharp pencil and starts tracing where every revenue dollar comes from and then seriously challenges every expense it'll take to generate that revenue dollar, will you have:

-a profitable model?
-a repeatable model?
-an expandable model?
-a predictable model?
-a defensible model?"

and

"The team is still an important part of the equation, but the entrepreneur is just as important. Here's what the investors are looking for in both:

-Passion: The entrepreneur must demonstrate a contagious excitement about their vision for the company.
-Tenacity: The entrepreneur must prove they have the stamina and willpower to stay with their vision through thick and thin.
-Flexibility: The entrepreneur must be willing to reevaluate and refocus their plans when things don't work out as anticipated.
-Commitment: The entrepreneur must be willing to invest enough of their own money into this project to convince investors they're serious.
-Teamwork: The entrepreneur's team must prove they can work effectively together.
-Coachability: The entrepreneur and their team must be coachable. No team knows everything they need to know to succeed.
-Knowledge: Investors prefer to back teams that really know their market by having backgrounds that are rich and impressive in the market niche for which the company is engaged."

Dealing with Security Issues in IT Contracts

"In today's IT contracts, it is important to address security issues during the negotiation process rather than trying to sort them out later in litigation. By consulting the 10-point checklist [from DennisKennedy]...,you will have a number of ways to negotiate security protections in your IT contracts by approaching the issues in a number of different directions. You may not get all you ask for, but you should be able to get some protection or get a good sense of how comfortable you will be with a vendor who is not willing to stand behind its security efforts."

The Face of a Startup's Offices

Excellent point from this Genuine VC post:

"A startup's office directly speaks to prospective & current employees, customers, and investors. Not only does it communicate an outward and explicit message, but like a face, it provides insight into what's going on underneath the surface."

Open Source Derivative Works Can Be Scary

"Many users of open source software are frightened by the term "derivative works." They worry that they might accidentally create derivative works that will infect their own proprietary software." This is particularly true if the open source software being used or linked to is distributed under the GNU General Public License (GPL) or the Open Software License (OSL), both available at www.opensource.org/licenses. This is so because the GPL and OSL require that derivative works be offered to the public under the terms of the applicable license.

This article by Lawrence Rosen provides a good summary of the issues involved and the emerging law in this area. He suggests the following as guides in determining whether a derivative work has been created:

"Here’s how I would decide in the edge cases that I described above:

· The primary indication of whether a new program is a derivative work is whether the source code of the original program was used, modified, translated or otherwise changed in any way to create the new program. If not, then I would argue that there is not a derivative work.

· The meaning of derivative work will not be broadened to include software created by linking to library programs that were designed and intended to be used as library programs. When a company releases a scientific subroutine library, or a library of objects, for example, people who merely use the library, unmodified, perhaps without even looking at the source code, are not thereby creating derivative works of the library.

· Derivative works are not going to encompass plug-ins and device drivers that are designed to be linked from other off-the-shelf, unmodified, programs. If Linux is designed to accept separately-designed plug-in programs, you don’t create a derivative work by merely running such a program under Linux, even if you have to look at the Linux source code to learn how to do so.

· In most cases we shouldn’t care how the linkage between separate programs was technically done, unless that fact helps to determine whether the creators of the programs designed them with some apparent common understanding of what a derivative work would look like. We should consider subtle market-based factors as indicators of intent, such as whether the resulting program is being sold as an “improved” or “enhanced” version of the original, or whether the original was designed and advertised to be improvable 'like a library.'”

Create an E-Commerce Business Plan

"Many people have great ideas for online businesses, but the truth is that few people can translate those ideas into reality. It's a complex process and it takes knowledge, vision, persistence, technical skill, money, and just as much business acumen as it takes to make a bricks-and-mortar business successful. There are many pitfalls for the unwary, so it helps, before you start, to create a realistic business plan that is as complete as possible."

This article from John Bremner provides a good overview and details specific to the development of an online business. For example, he states, regarding the website aspect of the business plan:

"There are also a number of other questions you need to answer about your solution:

What will be your business domain name?
What are you going to sell?...
What information will you provide for each product? Will you show pictures? If so, how will you obtain them?
Are you going to need a transactional or a display site?
Will you have multiple departments or just one? Will it be a vortal, a portal, a shopping mall, or a single shop?
Is web-space an issue?
Will you be taking credit-card details? If so, who will be your Payment Service Provider, and what will be your security arrangements?
Will you be letting out web space on your site to others as a way of increasing revenue streams, or not?
Are you aiming for a worldwide market, or a local market?
How will you achieve search-engine registration and maintenance?
What will the site look like?...
Who is going to run, update and maintain the site?
How will you keep customer information safe? If you are not using an Applications Service Provider, what will you do about data backups, how will you provide telephone support for visitors to your website, and how will you deal with problems?
How will you keep track of stock and orders, arrange delivery, and deal with complaints, returns, refunds, out of stock items, and order tracking?
What shipping options will you offer?
Will you have a special offers area?
How can you generate additional revenue through your website? Advertising? Subscriptions?"

Dictionary for Small Businesses

This Web Site provides definitions as a ready reference to 2,500 of the most commonly used terms encountered by the start-up entrepreneur, the small business person and the student of business theory. Found via this Small Business CEO post. Thanks, Steve.

Beware of Potential Acquirers on Fishing Expeditions

"It is always nice to have a large company call you and express acquisition interest. That being said, go into the conversations with a skeptical eye and make sure you do not waste your time as these strategic discussions can quickly lead to a dead end if not managed appropriately....If you manage this process appropriately you may find yourself in a great place as many of the best acquisitions happen when companies are bought and not sold. The downside is that these discussions can suck up lots of your precious resources and be a tremendous distraction to your management team."

Read more about this process and the questions to ask of your potential acquirer in this post from Ed Sim.

Anthony needs ...

From a post by Jack Vinson comes another "do-this-instead-of-work meme" for your pleasure. This time you ask Google what you need by doing a quoted search for "yourname needs". Then list the top ten hits, possibly removing the pornographic ones. My list follows:

1. Anthony Needs Coaching In Game Of Life
2. Anthony Needs Your Feedback
3. Anthony needs touches, and to forget the past
4. Anthony needs every second to achieve some measure of atonement.
5. Anthony needs you to know that the kid isn't his.
6. Anthony needs all the help he can get.
7. Anthony needs a new team.
8. Anthony needs to know.
9. Anthony needs to go.
10. Anthony needs to film more.

Pick Partners Carefully

This excellent article from Jeff Cornwall discusses some of the issues faced by a business founder deciding whether and with whom to partner in starting a business. Some of the questions to ask before "tying the knot" include:

"- Do your share the same vision for the business?
- Do you share the same aspirations for the business? Does one want to build an empire while the other create a simple lifestyle kind of business?
- What are your work habits and work ethic? Are they compatible enough to keep the partnership feeling fair to all the partners?
- How much time off to you plan to take each day, each week, each year?
- How much money will you put into the business?
- How much do you expect to get out of it?
- Who will be the President of the company? What roles will the other friends play?
- How will decisions be made?
- What is everyone's credit rating? Can all help to guarantee a loan, if necessary?
- What if one of you gets married and the new spouse gets a job offer in another city? Would you move away?
- What are your core values and how do you want to see them play out day-to-day in the business?
- How will employees, customers, suppliers, etc. all be treated?
- What will you consider to be real success in this business?"

Small Companies Have Big Secrets

"Small companies may have a very large number of trade secrets. These trade secrets are not so well bounded and defined as patents, copyrights and trademarks, and so they tend to blend into each other, forming an interlocking mesh of information that does not easily divide into separate, countable and distinct trade secrets. Finally, trade secrets are created and destroyed rapidly in an information economy, making the management of trade secrets a dynamic process."

This article from the Trade Secret Office, Inc. provides a good overview of trade secrets concepts, a methodology for valuing them, a discussion of litigation issues and helpful recommendations for protecting trade secrets including the following:

"* An inventory of the potential trade secret assets should be conducted immediately. In practical terms, this will involve the preparation of a list of trade secrets with documentation of the dates of creation, places of storage, places of use and other key information necessary for the maintenance of these assets on an on-going basis.

* Employee, contractor, and visitor agreements should be implemented. Careful attention should be paid to both confidentiality and ownership issues, with contractual assignment clauses being implemented where necessary.

* With respect to paper documents and tangible items, procedures for locked file cabinets or other security measures should be implemented.

* Electronic security procedures should be implemented, including, at a minimum, the implementation of login protections on personal computers.

* Access to information should be on a need-to-know basis. Sign out/sign in procedures should be used. Confidential documents should be marked “confidential.” Super-confidential documents should be marked “super-confidential,” and access should be severely restricted.

* Locked bins should be used to discard confidential documents, and these bins maintained by an outside company performing onsite document destruction.

* Accounting procedures should be implemented to track the time, effort and money expended on the creation and development of trade secret assets.

* All persons should wear prominently displayed badges while on the premises. A visitor sign in/sign out badge system should be implemented.

* Manufacturing processes should be restricted from public view.

* The company handbook should devote an entire section to trade secrets. There should be ongoing employee education on the importance of identifying and documenting the existence of trade secret assets, with employee economic incentives for complying with this policy.

* The company should implement a strict procedure for trade secret exit interviews."