Free Data Security Kit for Small Businesses

"An IDG News report yesterday announced the availability of a free Better Business Bureau (BBB)customer data security kit through their 'Security and Privacy -- Made Simpler' website that was launched on Monday (3/27) for the benefit of small businesses, that typically do not have the resources to have a full information security program. The report contained some interesting statistics:

56% of U.S. small businesses experienced data breaches in 2005.
20% of small businesses do not use virus-scanning software for email.
60% of small businesses do not protect wireless networks with encryption."

Read more and find links at this Realtime-ITCompliance post.

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Software Patents & Startups

"No one will sue you for patent infringement till you have money, and once you have money, people will sue you whether they have grounds to or not. So I advise fatalism. Don't waste your time worrying about patent infringement. You're probably violating a patent every time you tie your shoelaces. At the start, at least, just worry about making something great and getting lots of users. If you grow to the point where anyone considers you worth attacking, you're doing well.

We do advise the companies we fund to apply for patents, but not so they can sue competitors. Successful startups either get bought or grow into big companies. If a startup wants to grow into a big company, they should apply for patents to build up the patent portfolio they'll need to maintain an armed truce with other big companies. If they want to get bought, they should apply for patents because patents are part of the mating dance with acquirers.

Most startups that succeed do it by getting bought, and most acquirers care about patents. Startup acquisitions are usually a build-vs-buy decision for the acquirer. Should we buy this little startup or build our own? And two things, especially, make them decide not to build their own: if you already have a large and rapidly growing user base, and if you have a fairly solid patent application on critical parts of your software."

So states Paul Graham and much more in his essay Are Software Patents Evil? that is well worth reading.

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Business Plan Template

This Business Plan Template from e-magnify "is taken from the Center for Entrepreneurial Assistance's 'Entrepreneur's Guide - Starting and Growing a Business in Pennsylvania' and was used for the 2002 WriteIdea contest, Southwest Pennsylvania's first business plan competition for women."

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Don't Blame the VC; It's Your Fault

"The fundamental reason that only 2% of start-up business can attract professional investment is that the majority of entrepreneurs don’t understand how to properly structure a business or understand the investment process. Most of the new ventures that don’t get funded are due to:

* A belief that an Idea or a Technology + Capital = Success.
* An inability to understand the difference between an idea and what it takes to execute that idea into a revenue-generating business.
* The ignorance of not recognising that the funding process is structured to mitigate foolish risks and flesh out the criteria for success.
* The lack of communication and presentation skills.
* Unwillingness by the entrepreneurs to make an investment in developing the required skills to meet the critical success factors and adjusting their attitude to work in partnership with investors.

There are some fundamental rules successful investors, be they angels or VC’s, have in their bible. Investors who don’t always follow these rules are family, friends and fools.

Rule No 1
The idea is worth only 20% of the value of the venture...

Rule No 2
People – not ideas technology or money - build companies, thus they are worth 50% of the value of the venture...

Rule No 3
A successful and fundable business requires a sound structure right at the start, thus the structure is worth 30% of the value of the venture...

Rule No 4
Only products and services that can relieve a significant identified group of customer’s pains can generate revenue...

Rule No 5
Investors expect to exit with significant returns within six years...

Rule No 6
Strategies that are developed without total awareness of the forces and threats that can impact your business will inevitably fail..."

Read much much more in this excellent, comprehensive and pulls-no-punches article by Gerry Lemberg.

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How a Start-up Evolves

"Businesses grow from start-up to conglomerate in three distinct phases, each of which is driven by a different type of person. The differences and conflicts between these waves of activity help explain why so many small companies self-destruct as they grow, and why so many large companies are so bad at doing anything new.

Chapter 12 of Robert X. Cringely's Accidental Empires gives an excellent analogy between the growth of a company and a military operation. He talks about three waves of expansion, each with its own characteristics and each one driven by people with very different sets of skills.

The first wave to hit the beach when entering new territory consists of commandos. These are people who, in Cringely's words, 'Work hard, fast, and cheap.... Their job is to do lots of damage with surprise and teamwork, establishing a beachhead before the enemy is even aware that they exist.' Simply put, they create something out of nothing, turning an idea into a product. A commando can literally do the work of a hundred normal employees when they've got the right problems to work on. A start-up without commandos has nothing to sell.

The second wave consists of infantry, exploiting the opportunity created by the commandos. These are the people who turn a promising start-up into a profitable business with systematic development, manufacturing, and sales efforts. They provide structure to the company that allows it to grow beyond an activity shared by a half-dozen friends into a real business. As Cringely says, 'While the commandos make success possible, it's the infantry that makes success happen.'

The third wave consists of police. Once the business has grown into its market niche, the third wave is an occupying force intent on holding territory. Author Eric Raymond describes middle managers as "conservators of the stability of the organization," which makes the presence of middle management a clear indicator that the third wave has arrived. A middle manager's job is to say no to ideas that don't originate from on high, somewhere near the CEO. This prevents the enormous size of the company from tearing it apart..."

Read more in this Motley Fool article (free registration required).

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Models for Managing Uncertainty

"In making strategic decisions under uncertainty, we all make forecasts. We may not think that we are forecasting, but our choices will be directed by our anticipation of results of our actions or inactions.

Indecision and delays are the parents of failure. This site from ubalt.net is intended to help managers and administrators do a better job of anticipating, and hence a better job of managing uncertainty, by using effective forecasting and other predictive techniques."

Topics covered in this comprehensive and detailed site include:

# Chapter 1: Time-Critical Decision Modeling and Analysis
# Chapter 2: Causal Modeling and Forecasting
# Chapter 3: Smoothing Techniques
# Chapter 4: Box-Jenkins Methodology
# Chapter 5: Filtering Techniques
# Chapter 6: A Summary of Special Models
# Chapter 7: Modeling Financial and Economics Time Series
# Chapter 8: Cost/Benefit Analysis
# Chapter 9: Modeling Advertising Campaign
# Chapter 10: Economic Order and Production Quantity Models for Inventory Management
# Chapter 11: Modeling Financial Economics Decisions
# Chapter 12: Learning and the Learning Curve
# Chapter 13: Economics and Financial Ratios and Price Indices
# Chapter 14: JavaScript E-labs Learning Objects

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Hiring Your First Employee

Looking to bring your first employee on board? Need a refresher on legal issues involved in hiring? This article from entrepreneur.com will help you understand the legal requirements of hiring staff so you don't hit any rough waters down the line.

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How to Sell Your Business

I created a Squidoo lens on How to Sell Your Business as a companion to the one I put together on How to Buy a Business. The steps outlined in the lens are available here, but with related links and resources set forth in the lens omitted.

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The Only Certainty About a Forecast is that It Will Be Wrong

When used as a management tool, rolling forecasts have an edge over many other performance management systems. This excerpt from the new book Reinventing the CFO explains how to make forecasts realistic and effective stating:

"The purpose of forecasting is to inform decision making (to help shape future outcomes), not to predict the future. In reality, forecasting is necessary only because organizations cannot react instantly to changing events. That's why fast reaction is more important than (even accurate) prediction—because accuracy is rarely achieved. Indeed, the only certainty about a forecast is that it will be wrong. The question is by how much. Narrowing that variation comes from learning, experience, decent information systems, and ultimately, judgment....

That's why adaptive organizations focus less on annual budgets or long-term views and more on rolling views—usually rolling forecasts that always look twelve to eighteen months ahead. Rolling forecasts, if well prepared, form the backbone of a new and much more useful information system that connects all the pieces of the organization and gives senior management a continuous picture both of the current position and the short term outlook..."

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Emerging Technologies to Watch

This special report from Technology Review identifies and discusses the following emerging technologies as having particular potential for impact on business, medicine or culture.

Comparative Interactomics
Nanomedicine
Epigenetics
Cognitive Radio
Nuclear Reprogramming
Diffusion Tensor Imaging
Universal Authentication
Nanobiomechanics
Pervasive Wireless
Stretchable Silicon

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Question Your Beliefs

"Mistaken beliefs have power over you because you treat them as the truth. A belief is no more than a thought or opinion that's automatically treated as correct. In reality, they have no greater likelihood of being right than any other thoughts. But once we give them the label 'belief,' we convince ourselves they're different and must not be questioned. Whether they're our own beliefs, or ones we've accepted from others, or the commonly-held beliefs of the society in which we live, they aren't necessarily true - even if that's how we've come to treat them.

Question your beliefs constantly..."

Read more in this post from The Coyote Within.

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Tricks of the Trade

This post from Be Excellent provides this list and related link from Business 2.0 of 25 tricks of the trade for everything from finding great employees to sparking creativity and even knowing when to pass on a deal.

1. Extreme Benchmarking. Compare everything you do against your rivals
2. Bad News Folders. Keep a constant eye out for trouble
3. Strategic Strategy Reviews. Turn going-through-the-motions meetings into no-holds-barred debates
4. A New Office Pool. Use prediction markets to tap hidden knowledge
5. The Tech Box. Create a lending library of ideas
6. Outside-In R&D. Bring in experts to help spark new ideas
7. Office Graffiti. Let workers speak their minds (brainstorm)
8. Surgical Visits. Seek brutally honest feedback from customers
9. The Contra Team. Appoint official devil's advocates to challenge the merits of deals
10. Equity as You Go. Take no stake until you earn it
11. The Chief Shareholder Officer. Head off shareholder trouble before it starts
12. Always-On Board Members. Get the directors out of the boardroom
13. The Corporate Beehive. Use office design to keep the queen in touch with the worker bees.
14. The Job Audition. Turn the interview process into an all-encompassing tryout
15. Peer-to-Peer Promotion. Let employees choose their leaders
16. The Shrink Shrinker. Reward workers for keeping their hands off the merchandise
17. The Anti-Star System. Determine pay using just two factors: Profits and seniority
18. The Pyramid Scheme. Use kickbacks--the legal kind--to attract executive talent
19. The Long Goodbye. Keep retirees in the labor pool
20. The Three-Minute Huddle. Start each day with a lightning-fast, all-hands briefing
21. Gainsharing. Pass cost savings on to those who achieved them
22. Open-Source Ad Campaigns. Let your customers do the marketing
23. Late-Night Recon. Turn employees into trendspotters
24. The "Just Looking" Badge. Neutralize your customers' worst fears
24. Phone Shopping. Become your own customer

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Follow the Leaders

From this Random Thoughts from a CTO post.

When leaders make a mistake, they say, "I was wrong."
When followers make mistakes, they say, "It wasn't my fault."

A leader works harder than a follower and has more time;
a follower is always "too busy" to do what is necessary.

A leader goes through a problem;
a follower goes around it and never gets past it.

A leader makes and keeps commitments;
a follower makes and forgets promises.

A leader says, "I'm good, but not as good as I ought to be;"
a follower says, "I'm not as bad as a lot of other people."

Leaders listen;
followers just wait until it's their turn to talk.

Leaders respect those who are superior to them and try to learn something from them;
followers resent those who are superior to them and try to find chinks in their armor.

Leaders feel responsible for more than their job;
followers say, "I only work here."

A leader says, "There ought to be a better way to do this;"
followers say, "That's the way it's always been done here."

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'Do Nothing' is America's Most Popular Estate Plan

"If you don't make a Will it doesn't mean that you don't have one - it just means that you didn't write the one you have. For those who don't write their own Will, there are intestacy statutes that say who gets what and how...'Letting the state decide may save the decedent a few hours of thinking through their exit plan, but it can be exceedingly costly and aggravating to those left behind. Ultimately leaving a will is a much better legacy than dying without one.'"

Sound advice and more from this You and Yours Blawg post.

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Favorite Business Model

Fred Wilson's Favorite Business Model:

"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.

Examples:

Skype – basic in network voice is free, out of network calling is a premium service

Flickr – a handful of pictures a month is free, heavy users convert to Pro

Trillian – the basic service is free, but there is paid version that is full featured..."

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Strategic Planning FAQs

" 1. What is strategic planning?
2. What are the key concepts and definitions in strategic planning?
3. What are the basic steps in a strategic planning process?
4. What do I need to know before I start the planning process?
5. What are the individual roles in a planning process?
6. What's in a mission statement?
7. What's in a vision statement?
8. What is a situation assessment?
9. How can we do a competitive analysis?
10. What is a strategy and how do we develop one?
11. What should a strategic plan include?
12. How do you develop an annual operating plan?
13. How do we increase our chances of implementing our strategic plan?
14. Should I use an external consultant?
15. How do I use retreats in the planning process?"

Answers may be found in this article from Alliance for Nonprofit Management: Strategic Planning.

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Public Speaking Tips

"As Jerry Seinfeld once noted, at a funeral, most people would rather be in the casket than giving the eulogy, since public speaking stresses people out more than death. But giving talks doesn’t have to be such a frightening affair...There are some simple steps that should help make public speaking a better experience - for both you and your audience.

Presentation format
Before you start planning your presentation, find out from the organizers how much time you have and what format they envision for your talk...

Audience
Get information about who will be attending your presentation...

Location
If you have the opportunity, take a look at the location before the time of the talk...

The take-away message...
Start out with this summary statement in mind and build your presentation around it.

Outline
Once you have an idea of your presentation’s main message, spend some time thinking about the structure of the entire talk...

Strong start
The first couple of minutes of your talk should be the most prepared and polished. You want to get off to a good start...

Motivation
Spend a bit of time up front talking about the inspiration and importance of your message...

Timing
Wrap up your talk on time. To achieve this goal, ask someone to give you time cues by indicating when you have five minutes left, two minutes and when you have run out of time. Once you get the last notice, you should stop talking...

Flexibility
Organize your talk and know it well enough to have the flexibility to skip certain parts or expand on others depending on the circumstances...

Confidence and enthusiasm
You have been chosen as a speaker because you know your topic. Make sure that you exude confidence during your presentation...Be sure to enjoy your talk and show your enthusiasm about the content...

Question-and-answer session
If there is a Q&A segment then be sure to keep a polite demeanor throughout. Thank people for their questions and feel free to praise them for good points. If you are not sure how to respond to a query then express your appreciation for the insightful comment and note that you will look into it.

Practice makes perfect
Practice the presentation a few times: more if you have less experience, less if you are a more seasoned public speaker...Don’t write out the material word-by-word and don’t plan on reading text...Memorize the structure of the talk and the outline, but not every word.

Contact information
Finish by giving the audience some contact information, including an email address and Web site when applicable...

Read more in this excellent article by Eszter Hargittai.

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Getting to Yes in Agile Development

"Agile Development embodies good negotiation techniques. Good negotiation leads to better project outcomes.

Negotiation, meaning "discussion intended to produce agreement", is fundamental to every software project. Developers and customers must reach agreement on what the system is supposed to do. A wise agreement will define achievable goals and meet the users' real needs. How should we reach wise agreements? How should we reach agreements that create good outcomes for both parties?

There are excellent answers to these questions...in the classic book, Getting To Yes"Getting to Yes"...[by] Fisher and Ury...[who] call their approach "principled negotiation". It contains four key elements:

*Separate People from the Problem
*Focus on Interests, not Positions
*Invent Options for Mutual Gain
*Use Objective Criteria"

Each is explained in "Getting to Yes". This article from AgileKiwi discusses just one - Focussing on Interests, not Positions.

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Are Open Source Business Models Viable?

"The 'open-source' process of creating things is quickly becoming a threat—and an opportunity—to businesses of all kinds. Though the term at first described a model of software development (where the underlying programming code is open to inspection, modification and redistribution), the approach has moved far beyond its origins. From legal research to biotechnology, open-business practices have emerged as a mainstream way for collaboration to happen online.

New business models are being built around commercialising open-source wares, by bundling them in other products or services. Though these might not contain any software “source code”, the “open-source” label can now apply more broadly to all sorts of endeavour that amalgamate the contributions of private individuals to create something that, in effect, becomes freely available to all.

However, it is unclear how innovative and sustainable open source can ultimately be. The open-source method has vulnerabilities that must be overcome if it is to live up to its promise...

Read more in this article from Economist.com.

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Venture Capital Term Sheet Provisions

This is a link to Brad Feld's term sheets series of posts. Topics covered:

Price, Liquidation Preference, Board of Directors, Protective Provisions, Drag Along, Anti-Dilution, Pay-to-Play, Dividends, Redemption Rights, Conversion, Conditions Precedent to Financing, Vesting, Information Rights, Registration Rights, Right of First Refusal, Voting Rights, Employee Pool, Restriction on Sales, Proprietary Information and Inventions Agreement, Co-Sale Agreement, Founders Activities, Initial Public Offering Shares Purchase, No Shop Agreement (also Unilateral or Serial Monogamy), Indemnification, Assignment

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The Irrational Entrepreneur

"'Irrational passion may just be the ticket to overcome the paralyzing effect of irrational fear.'

More than one observer has emphasized the importance of an entrepreneur's passion. There is new scientific evidence that suggests that the assertion may be true, at least initially. It strikes me that there are important implications for how a promising start-up gains access to the capabilities it needs to execute its business model over time...

Read more in this post from David Bayless.

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Raising Capital Requires Securities Laws Compliance

"Raising capital requires knowledge of not only the financial markets but the securities markets. A company must comply not only with federal securities laws, but also with the securities laws of each state in which the issuer sells a security. The sad fact is that hundreds of deals fail because of poor decisions made as to its financing structure.

Privately held companies rely on two primary transactional exemptions from registration under federal securities laws. The first exemption from registration is provided by Section 4(2) of the 1933 Securities Act. This section provides an exemption for sales of securities by an issuer that does not involve a public offering. Privately held companies have relied on the so-called 4(2) exemption for the private placement of securities, but the exemption is not a defined set of rules. Consequently, issuers were forced to interpret and rely on federal case law that interpreted the legislation, but the cases evolved over time so issuers were always struggling to determine the most recent interpretation of the statute.

In contrast, the second exemption from registration is provided by a set of rules promulgated by the SEC and known as Regulation D. If an issuer follows the rules set forth in Regulation D, the issuer is afforded a safe harbor from registration for the securities issuance. It should be noted that transactional exemptions afforded by Section 4(2) and Regulation D are still subject to the SEC's antifraud provisions."

Read more in this excerpt from the Handbook of Financing Growth from VC Experts that reviews these typical offerings, as well as high yield debt, PIPES, reverse mergers and other options.

Technorati Tags: securities, compliance, business, finance

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Entrepreneur All-Star Event Set for April 6

Two outstanding panels of today’s entrepreneurial leaders — including Glen Meakem, the founder of FreeMarkets; Sunil Wadhwani, the CEO of iGATE; and Carl Cohen, Managing Director of Raptor LLC — will join Allegheny County Chief Executive Dan Onorato and other entrepreneurial experts to share their insights at a lunchtime event 11:30 a.m. - 1:30 p.m. Thursday, April 6 at the Engineers’ Society of Western Pennsylvania (ESWP).

The panels, moderated by Karl Schieneman, the 2004 Ernst and Young Entrepreneur of the Year, will offer lessons and information to current entrepreneurs on the success of start-up companies, and their lasting impact on the Pittsburgh Pennsylvania region. The event is sponsored by:

ELifelines.org, an organization co-founded by Schieneman that connects new entrepreneurs with experienced entrepreneurial mentors at no cost;

H E L P Pittsburgh, Helping Entrepreneurs Learn from Peers, a free, Pittsburgh-based entrepreneur networking and support group; and

M2Technology: A web site and networking consulting business that created the web site www.elifelines.org as a portal for entrepreneurial news about Entrepreneurial Lifelines and HELP.

Panel One includes Tim Palucka, author of a 125-year history of the Engineers’ Society of Western Pennsylvania, speaking on the historical contribution of businesses in Pittsburgh and nationally; Frank Demmler Director of Innovation Works, speaking on his experiences as a present-day entrepreneur; and Dan Onorato, Allegheny County Chief Executive, speaking on the future of the region and how collaboration among entrepreneurs can help Pittsburgh be a center of innovation and leadership in commerce.

Panel Two consists of three entrepreneurs who have founded successful Pittsburgh-based businesses, including Glen Meakem, co-founder and CEO of FreeMarkets Onlin (now part of Ariba), Carl Cohen, Executive Managing Director of Raptor LLC and Sunil Wadhwani, CEO of iGATE.

The fee for the event is $25, $15 for students, and includes lunch.

All interested parties should contact ESWP to make reservations by visiting http://www.eswp.com/eswp/program.htm or by contacting ESWP at 412-261-0710, ext. 10.

Technorati Tags: pittsburgh, startups, entrepreneurship, startup, legal

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New Posts by Category Sidebar

I implemented a new and revamped "Posts by Category" section on the sidebar for your use and enjoyment. The module is a workaround for the problem in Blogger of not being able to categorize your posts. Essentially, what I did was to create and save links to searches of this blog using keywords arranged in a logical progression from business startup to exit. The "categories" are thus self-organizing and updated automatically (I hope). Any feedback would be appreciated.

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Setting Up a Small Business Identity & Access Management System

"The steps for setting up an access management system in [a small or midsize business] (an SMB) are similar to that of larger enterprises. The difference, as with many IT issues, is that SMBs have more limited resources and smaller budgets. However, the approach is essentially the same.

There are three steps: evaluation, planning, and implementation and provisioning. "

Read more in this two-part series on identity and access management options for small and midsized businesses from SearchSMB.

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On Using Existing Solutions in New Ways

"Entrepreneurs each have strengths in different areas. Some of them are amazing operators who make remarkable things happen on a limited budget. Others are geniuses in their area of expertise and they transform their entire industry. Still others have a knack for finding a hole in an existing market and successfully exploiting it to turn a profit.

Some of the most successful entrepreneurs I have seen are re-arrangers. They take existing solutions (sometimes from other industries) and they apply them in new ways/scenarios to create value.

If I were forced to pick one quality that is indicative of success in business it would be this ability to find new uses for existing solutions."

Read more in this post from David V. Lorenzo.

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Dirty Dozen Top IRS Scams for 2006

"First, the IRS NEVER communicates via email (other then auto-confirmations). All news, good and bad, arrives in the mail...

Each year the IRS issues a list of the 12 "most notorious tax scams" that it is monitoring...The IRS and the Courts have made it clear that 'involvement with tax schemes can lead to imprisonment and fines. The IRS pursues and shuts down promoters of these and numerous other scams. Anyone pulled into these schemes can also face repayment of taxes plus interest and penalties.'

THE 2006 DIRTY DOZEN:

1. Zero Wages.
In this scam, new to the Dirty Dozen, a taxpayer attaches to his or her return either a Form 4852 (Substitute Form W-2) or a "corrected" Form 1099 that shows zero or little wages or other income...

2. Form 843 Tax Abatement.
This scam...involves the filer requesting abatement of previously assessed tax using Form 843...

3. Phishing...
A typical e-mail notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official-looking Web site. The Web site then solicits a social security and credit card number...

4. Zero Return.
Promoters instruct taxpayers to enter all zeros on their federal income tax filings...

5. Trust Misuse.
Promoters doing nothing but selling trust packages urge taxpayers to transfer assets into trusts...[that they falsely claim] will reduce income subject to tax, create deductions for personal expenses and reduce estate or gift taxes...

6. Frivolous Arguments.
Promoters make totally false and misleading claims such as: 1. The Sixteenth Amendment concerning congressional power to lay and collect income taxes was never ratified; 2. Wages are not income; 3.
Filing a return and paying taxes are merely voluntary...

7. Return Preparer Fraud.
Dishonest return preparers skim a portion of their clients' refunds and charge inflated fees for return preparation services...

8. Credit Counseling Agencies.
[Some] credit counseling organizations...claim they can fix credit ratings. But all too often, they are merely pushing debt payment plans or impose high set-up fees or monthly service charges that may add to existing debt.

9. Abuse of Charitable Organizations and Deductions.
Tax-exempt organizations are constantly used in various ways to improperly shield income or assets from
taxation...

10. Offshore Transactions.
Individuals avoid U.S. taxes by illegally hiding income in offshore bank and brokerage accounts or using offshore credit cards...

11. Employment Tax Evasion.
The promoter tells an employer not to withhold federal income tax or other employment taxes from wages paid to employees...

12. "No Gain" Deduction.
Filers attempt to eliminate their entire adjusted gross income (AGI) by deducting it on Schedule A..."

From Steve Leimberg's Estate Planning Newsletter # 942 (March 13, 2006) at http://www.leimbergservices.com
that is reprinted with permission at this You and Yours Blawg post .

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Got Simple? Watch for IRS Letter

"The IRS has been busy auditing SIMPLE IRA plans and discovering a great deal of noncompliance as far as whether or not the plans have been properly amended for EGTRRA. At a recent Mid-Atlantic Pension Liaison meeting, IRS announced their intent to notify all 190,000 employers across the country who maintain SIMPLE IRA plans in an effort to motivate employers to get the amendments done."

Read more in this Benefitsblog post.

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Family is Family & Business is Business: Not

"Talk to enough family-business owners, and one thing becomes clear very quickly: For those with their own name on the shingle, business and family life are intertwined. Yet with increasing specialization, competition from corporate giants and from outsourcing, family businesses are under more pressure than ever to innovate, find new efficiencies, and improve performance. In this five-part Special Report, BusinessWeek Online looks at the future of the family business and explores how savvy owners can see their businesses grow and prosper in the coming years -- along with examples of companies that are doing just that."

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On Leasing Retail Space In an Office Building

Most things you ever wanted to know about leasing a retail space in an office building (as opposed to a shopping center or mall) may be found in this Holland & Knight article from Mondaq.

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How to Avoid Business Litigation

"Litigation is merely one tool used to attain specific goals, which may be achieved more efficiently by other means...and it is sometimes the best approach for resolving a dispute...Depending on one's perspective, [however] any number of reasons can be listed to support an argument that litigation should be avoided." This excellent article by Brit T. Brown lists the following five reasons:

1. Cost Control...
2. Risk Avoidance...
3. Distraction...
4. Damage to Business Relationships...
5. Public Relations..."

The article continues with explanations as to the root causes of litigation and provides tips for avoiding lawsuits, stating:

"Why Does Litigation Happen?

Some of the manageable reasons...

1. Stubbornness/Pride...
2. Lack of Knowledge/Understanding...
3. Passion/Emotions...
4. Failure to Communicate...
5. Greed...

Five Common Sense Ways to Avoid Litigation

1. [Follow] The Golden Rule...
2. Improve Communications...
3. Analyze your company's historic performance to determine what activities typically result in getting you into litigation...
4. Rapidly respond to potentially threatening developments in their earliest stages (i.e., don't sit on it...
5. Incorporate risk shifting and litigation alternative provisions into your business practices...

Many business disputes will be either directly or indirectly related to contractual instruments. Hence, one powerful way to avoid litigation is to include litigation avoidance provisions within your contractual instruments..." [Numerous examples of such provisions are provided in the article].

Technorati Tags: business, management, entrepreneurship, startup, legal

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It's 11 o'clock: Do You Know Where Your Trade Secrets Are?

"The information age has made it even more important for businesses to protect their confidential data from misappropriation by competitors, former employees, or others who want to benefit from a company’s most valuable asset, its intellectual capital. Many companies do not realize that a wide array of business information may, in fact, be protected under trade secret law...

What may be protected as a trade secret? A trade secret can be almost any information used in the operation of a business, which is both sufficiently valuable and secret enough to allow a business a competitive advantage. There is no need for invention or novelty, which are among the requirements for patent protection...

It isn’t necessary to take unreasonably expensive steps to maintain trade secrets. A trade secret owner must take only "reasonable" steps to ensure the secrecy of information. Courts have held the following measures "reasonable" under some circumstances to maintain the confidentiality of trade secrets:

Advising employees of the confidentiality of the trade secret information.
Limiting access to business information to a "need to know" basis.
Controlling access to physical facilities where trade secret information is located.
Obtaining non-disclosure agreements from third parties before allowing them access to such confidential information.

Developing and implementing a plan to protect your confidential business information is essential. Here are a few steps you can take:

Conduct employee background checks...Execute written agreements...Educate your work force...Institute an information control policy...Secure your virtual and physical facilities...Audit your trade secret portfolio... Conduct exit interviews..." Adopt and enforce a blogging policy.

Read much more in this article by Scott D. Marrs and John W. Lynd.

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Financial Statements 101

"Do you know how to read a financial statement on your own? Do you know how to read your own personal and business financial statements?

Knowing how to do this is an essential skill not just for entrepreneurs but for everyone. However, for the entrepreneur having this skill can mean the difference between having a thriving business that continues to thrive and winding up in bankruptcy. The annals of the bankruptcy courts are strewn with cases of entrepreneurs who entrusted their accounting to others and, not knowing how to read the financial statements of their own businesses, were surprised when they found that the business was ultimately unsustainable. The purpose of this article [from The Cash Flow Blog] is to help prevent this from happening to you--and to arm you with the skills you need to structure your business to your benefit from the outset."

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Squidoo Lens Becoming Popular

The Squidoo lens on How to Buy a Business that I created and told you about earlier has become popular. My lens started out ranked as 400 thousand something and is now at 175 after peaking at about 150. As another avenue to try to establish yourself as an expert on a topic, I would encourage other bloggers and blawgers to create additional lenses. Here is the lead in to the How to Buy a Business lens:

"If you have decided to take the entrepreneurial plunge, buying an existing business may be the best and fastest way to dive in. Lil Sawyer, Managing Director of Funding Links Inc. has identified the following as the advantages of business acquisition vs start-up:

1) Much lower risk of failure,
2) Business generates cash flow from day one (preferably positive cash),
3) Proven business concept and processes,
4) Proven products, services, marketing and sales strategies,
5) Established customer base providing referrals and references,
6) Established suppliers,
7) Trained employees in place,
8) Immediate credibility and perception of success,
9) Seller likely to lend support and may assist with financing,
10) Easier to secure affordable financing to complete the acquisition.

This lens outlines a ten step process by which you can buy a business and start swimming in entrepreneurial waters."

Technorati Tags: business, legal, law, buy+business, startup, entrepreneurship

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Maintain a TIP Kit for Effective Trademark Infringement Response

"Doug Lytle, Esq., of Duckor Spradling Metzger & Wynne in San Diego, points InhouseBlog to his recent article in The Intellectual Property Strategist, a publication of American Lawyer Media. The article, "A TIP for Responding to Trademark Infringement", provides excellent suggestions that will help companies quickly and effectively respond to trademark infringement claims." For a link to the article, see this post from InhouseBlog, from which the foregoing quotation was taken.

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Step by Step Business Plan Workbook

If you're starting a business or need to find financing for your existing business, this step by step business plan workbook from the Dept. of Small Business Services of the City of New can help. The workbook contains a tremendous amount of useful information, charts and outlines presented in an understandable way to enable you to effectively put together your business plan.

Technorati Tags: business, management, entrepreneurship, startup, legal

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OnCall BizAttorney™ Solution

Nothing is more frustrating about the billable hour billing system than the fact that it discourages clients from contacting their attorneys for helpful legal advice. That is why I developed the OnCall BizAttorney™ legal services package.

If you want to have the freedom to call your business lawyer, as needed, without worrying about the “meter running” each time, the OnCall BizAttorney™ legal service retainer program may be the answer. For a fixed fee, to be agreed on in advance based on expected needs, you will be free to contact me by phone, fax or e-mail - just to confirm something you aren’t quite sure about; or if you do have a legal issue, to confirm whether it’s major or something easily resolved.

Perhaps most importantly, this encourages you to be proactive, to ask about issues before they become problems, and not wait until it’s too late.

The scope of the retainer, the term and the fee would all be agreed upon in advance. If a matter arises which is outside the agreed-on scope, I would advise you on possible next steps and you can determine whether, to what extent and on what terms you would require additional services. You may find more information and a contact form on my law practice website.

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Choosing a Legal Structure of Your Business

"The type of legal format you chose depends on the following factors:

Your need for capital
Your type of business
When you want to start your business
Your ability to finance your business
The number of people involved in the business
The liabilities and risks you are willing to assume
Your personal tax situation
Your plan for taking money out of the business
Your plan for continuing the business if something should happen to you
Your long-range business plan

There are four main ways to organize your business: the sole proprietorship, the partnership, the corporation, sub charter S corporation, and the limited liability company. The legal structure you choose will determine how much paper work you will have to do, how much personal liability you will incur, how you will be able to raise money, and how your business will be taxed. Keep in mind that your initial choice of a business form doesn't have to be permanent."

Read more in this excellent summary from 1000ventures.com.

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Veteran Bootstrapping Advice

A visit from Charles Hagood, co-founder of The Access Group and Health Performance Partners to Professor Cornwall's class provided these tips for the successful bootstrapper:

"1. Cash is King. Enough said!
2. Sometimes Less is More. Having fewer resources can force a business to be more flexible and more resourceful...
3. Keep Your Priorities in Order. Never compromise your ethical principles, even when money it tight.
4. Enjoy the Ride. Love what you do in your business and enjoy each day...
5. Cut Costs, Not Quality. Focus your money on customers when money is scarce.
6. Impress Your Customers, Not Yourselves...
7. If You Have $1 Left in the Bank, Spend in on Marketing...
8. Always Look Bigger and Tougher Than You Are...
9. Continuously Reassess Your Business for Wasteful Spending..."

Read more in this post from The Entrepreneurial Mind.

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Preferred Stockholder Rights Explained

"In addition to traditional terms and conditions found in a company's certificate of incorporation, when an investor finalizes a preferred stock investment, the terms and conditions of the preferred stock will be included in a company's certificate of incorporation. There are several fundamental rights and privileges granted to the holders of preferred stock and these rights and privileges are described in detail in the certificate of incorporation. The rights and privileges include the following categories: dividends, liquidation preference, voting, conversion (including adjustments to the conversion price or antidilution protection), and redemption...

The investors' rights agreement covers four primary rights granted to investors in connection with preferred stock investments. These rights may not be amended or reduced without the approval of a majority of the preferred stockholders. The primary rights include securities registration rights, information rights, preemptive rights to acquire new securities issued by the company, and a grouping of affirmative and negative covenants to which the company must adhere..."

Read more in this Buzz of the Week from VC Experts presenting excerpts from the Handbook of Financing Growth.

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Free Business Plan Software & Templates

"The executive summary is the most important part of the business plan. Many people will only read this. The summary in itself will not secure an investor, however, it can loose them.

Quality - the quality of the summary must therefore be outstanding and you should pay particular attention to it. Obtain critical feedback from others on your drafts.

Stand-alone - it is also used as a stand-alone document when introducing the project to others so it must be able to capture interest and entice the reader to take the next step and request more information - and secure a meeting.

Style – cogent and terse. It should be direct and organized as a series of bulleted paragraphs, each deals with one key area. No waffle.

Length - ideally one page, and certainly not more than two pages.

Content - it needs to:

• Introduce the project in terms of what area it is concerned with, what it is trying to do, and list the key individuals and advisors involved
• Describe the stage the project reached particularly in terms of the "readiness for market" of its products, or product concepts, and outline any intellectual property, such as patents, that may support the products
• Highlight the main market characteristics, including size and growth, and specify the market opportunity that you are addressing
• State the central competitive advantages of your products and/or processes, how distinct they are from the competition and in what way, and how these are important to customers
• Summarize the objectives of the company in the short and long term, and quantify these with specific numbers. Outline the key strategies you will use to achieve them
• Include any "evidence of success" - this may be trade reviews, analyst comments, sales or partnership agreements, working prototypes, market testing, etc. which help to make the project more tangible to the reader and raises confidence in the project
• Highlight any other key issues that should be noted
• State your finance requirements and what stake in the company is available for this (see Financial Structure), and the planned exit strategy for the investor - i.e. how the investor will realize their return from the project."

From the free business plan template available along with other useful templates and materials from Innovateur.

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Without a Net: Going Solo

I believe it was Dennis Kennedy who made a statement to the effect that within a certain time period after you start blogging, you will be doing something different with your career. Well, with all this talk in the blogosphere of "small being the new big" and after writing for 18 months or so on this blog about startups, I caught an irresistible entrepreneurship bug myself. So, starting today, I am officially a solo practioner.

Yesterday was my birthday and my last day at the firm where I spent the past sixteen years practicing business and technology law. Today, I start a new year and a new adventure. Stay tuned for more developments and check out my updated website for more information on my fixed fee legal and independent general counsel practice.


Technorati Tags: business, entrepreneurship, startup, legal

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