News on Social Media in the Workplace

From The Tennessean comes Businesses crack down on workers using social network sites

Workplace restrictions on the digital world are forcing employees to give their fingers a rest, even though we've become a society that can't get enough of social networking sites and other online diversions.

Among U.S. companies, 54 percent completely prohibit workers from visiting social networking sites for any reason while at work, according to a report last week from Robert Half Technology.

Nearly one-fifth permit social networking for business purposes only, and 16 percent allow limited personal use.

In the future, more companies will move to block access to social media and monitor what their employees do online, although not completely ban Internet use, said Nancy Flynn, founder and executive director of the ePolicy Institute, which advises employers on how to limit cyber risks.

She doesn't recommend that companies ban all personal Web use or prohibit texting on personal cell phones.

"What I do recommend is that employers put clear rules into place as to how much time you're allowed for personal electronic communication and the times of day to engage in personal use, whether that's the lunch hour or during breaks or for an hour a day," Flynn said.

I emphasized that paragraph.  Clear rules help on several levels.  Take a good look at what your employees do and your business's needs.

About the business' needs, take a look at Breaking: Twitter costs British economy less than people who gaze out the window.

Avoiding Common Legal Business Mistakes

I find I do can find no way to easily summarize Common Legal Mistakes Businesses Make and How to Avoid Them, Part II from John L. Watkins. The best I can do is list the topics covered:

• Mistake Number 6: Ignoring Key Contractual Provisions
• Mistake No. 7: Assuming it's Non-Negotiable
• Mistake No. 8: Using Internet Forms
• Mistake No. 9: Letting Your Employees Vary Your Terms and Conditions

Business owners - read this article. Anyone reading me for any length of time knows that I emphasize preventive law. Here is an article showing business owners what can be prevented.

What Happens to the Business if There is a Divorce?

Consider this scenario from The Golden Scribe's Prenuptial Agreements to Protect the Family :

In a similar fashion, business partners can be protected with a prenuptial agreement. If Tom and Scott have worked over the past five years to create a successful business, and Tom is about to get married, the business and its assets can be protected by the prenuptial agreement. This not only protects Tom, but it protects Scott, as well. Without a prenuptial agreement, Tom and Scott’s business could potentially be torn apart by a divorce.

What happens to your business if this was you or a partner or other co-owner? Don't know for sure? Get yourself to a lawyer ASAP. If you are in Indiana and do not already have legal counsel, give me a call.

Oh, what if everyone is married before starting the business? Think about a post-nuptial agreement.

Small Business Owners - Mistakes to Avoid

I agree with Rush on Business that Avoid These 11 Common Mistakes of Small Business Owners deserves republishing but I would add one:

"On the Texas Small Business Law Blog there is an helpful post on the common mistakes made by small business owners. The common mistakes listed by business attorney David Willis include:

1) Under-capitalization.
2) Failure to plan and adjust for growth.
3) Over-emphasis on the type of business organization.
4) Failure to understand the impact of an employee.
5) Failure to understand the impact of employees.
6) Not having an employee manual.
7) Thinking: 'I've got some experience, I can do this myself.'
8) Not keeping up with the paperwork.
9) Failure to plan for litigation.
10) Not having an electronic document retention policy in place.
11) Failure to consult an attorney."

My addition: get a Certified Public Accountant. Taxes - especially sales and employee withholding - can be fatal to a small business.

Small Businesses - Tips for The Hard Times

All right, I cannot think of another phrase that describes our economy so well as this: it sucks. I offer these posts as examples of what is good about being a small business owner right now.

From The Pinque, Inc. Diaries:

It's a great time to be a small business owner!

Despite what they've been telling you, it's a great time to own a small business.

If you're a small business owner, you knew going in that this wasn't going to be easy. If you wanted easy, you wouldn't have listened to that little voice that told you could do something better than what everyone else was doing.

Instead, you believed in your talents and your creativity. You knew you could use them to accomplish something better. And now you can.

This is the opportunity you've been waiting for.

As a small business owner, you don't need to be afraid of getting laid off, or not getting a raise this year. Your position is secure, and how much money you make next year depends only on you.

You're actually in a perfect position to take advantage of this economic downturn. Unlike large companies, you're easily able to adapt to what your target market needs, and make sure you're meeting those needs.

That's right - your target market still needs you. That fact hasn't changed. Exactly what they need from you may be changing, but they still have goals they need your help to reach.

What does your target market need from you right now?

If you're not sure, you need to find out. Start connecting with them in the places where they spend their time and discover what their concerns are right now.

Then come up with ways you can help them solve those problems. You have the flexibility and the creativity to come up with solutions that meet your market's changing needs.

Make sure your market knows how to find you.

If they're in a panic too, your clients and potential clients are probably not going to seek you out. This is why it's more important than ever to make sure your business is visible to them every day, in multiple ways.

Begin connecting with your market on social media sites, if you're not there already. Write articles that solve your readers' problems, and publish them in places where your potential clients will read them. Launch a business blog that helps you establish an ongoing dialogue with your market, so they know you're still there and that you're listening to them.

Strengthen relationships with other small business owners. (This is where MakeMinePink comes in!)

The most powerful thing you have going for you is your relationships with other small business owners. Instead of spending energy lamenting our economic troubles, we need to encourage each other and work together to stay the course.

This is from Small Business for Beginners' Will Your Small Business Fail?:

Have you researched your market? If you’re just jumping in, without doing the research, you may end up in trouble. Sure it sounded like a good idea when you thought of it, but without background information you’re walking into a wall. What type of demand does your service or product have? Is it enough of a demand to warrant a full business around it? Is the market all ready saturated? What are people willing to pay for this product or service, and how far off the mark are you with your pricing?

One of my downfalls is my record keeping. I have to push myself to stay on top of it. Record keeping is vital, and something you don’t want to slack on. Not only will you have records and transaction for things like taxes, but you’ll be able to analyze your data to see what things may or may not be working for your small business.

The other thing many small businesses don’t have in tact is sufficient capital. When you’re starting out there are often expenses you haven’t thought of. Sure you can figure out your main beginning expenses, but what about the day to day operations? What about when things come up? If you don’t have immediate access to funds when you need them, it can be detrimental to your business.

Lastly, many small businesses don’t have a marketing plan. They go about all details of their business and just assume that people will show up. My friend, if you don’t have means to grow your business, and gain new customers, you’ll eventually stagnate and your business will no longer thrive. Marketing is a crucial element in building the success of your business.

Avoid common pitfalls, and your small business will have the chance to survive longer than most!

Even more cheering may be this cartoon.

Less cheering is the knowledge that we live in perilous times. I see it in my own business and the business of my clients. Legal problems will increase and budgets will be strained. Letting legal risks mount only results in greater costs to the business. If your current lawyer only offers hourly billing, then you need to give me a call. And if your business does not have a lawyer, call and let me see what I can do for your business.

Business Survival: Buy-Sell Agreements

I have written before about the problems solved by having a buy-sell agreement, but Importance of having buy-sell agreements from Bermuda's The Royal Gazette presents the issue again in a very well written article.

What follows applies to any business organization having more than one person as owner: corporation, limited liability company, partnership.

"As a business owner, one of the earliest decisions you will make is how to build your team. Should you run the business on your own, or take on partners? There are strong arguments both for and against partnering with others and sharing equity; however, we would like to focus on a different aspect of partnerships that many do not think about - until it is too late. While partnerships are almost always formed with the best of intentions, it is important to have a mutually agreed framework for ending the business relationship BEFORE it is needed."

Not a single thing I disagree with in this paragraph - including the "BEFORE". The article then gives three scenarios where not having a buy-sell agreement means trouble, if not ruin, of the business. Followed by this:

Benefits of a buy-sell agreement include:

• Establishing a "fair', structured plan for a shareholder exit - this is particularly important during contentious circumstances.

• Enabling a smoother transition while normal business operation continues.

• Creating liquidity and a ready market to sell a business interest - exiting shareholders are more certain of being able to "cash-out" of their equity positions. In Bermuda, where there is a limited pool of buyers, this can be critical!

• Mapping out the events which will trigger the buy-sell - this aids in eliminating ambiguity and reducing possible disputes.

• Providing procedures for dispute resolution, removing emotion from the decision-making process.

• Pre-determining the process by which the business interest will be valued - this will save both time and money when it comes time for a shareholder to sell their stake.

• Assigning a value to the business interest without necessitating a purchase/sale transaction - this is particularly important in divorce scenarios!

• Protecting against unwanted new partners - this provides incumbent shareholders with an opportunity to either increase or decrease their existing shareholdings.

• Determining payment and financing terms.

Bermuda may be smaller than Indiana but selling a closely held business is not easy. Indiana has no great pool of buyers looking to buy out a closely held business. The article goes onto describe the process for reaching an appropriate buy-sell agreement:

1 Choose the appropriate agreement structure. The three basic types of buy-sell agreements are repurchase agreements (in which the entity buys the interest from the exiting party), cross-purchase agreements (in which one or more existing shareholders buy the interest from the exiting party) and hybrid agreements (which may allow the founder first priority to buy the interest and other owners or partners the second option to buy).

2 Negotiate the major provisions. The provisions are the meat of the agreement and outline how exactly a business interest will be sold and to whom.

3 Determine value and price. Map out how the business interest will be valued and priced in support of the provisions. Will a business valuation professional be used? Will a previously agreed upon formula be used?

4 Determine triggering events. What events will trigger the buy-sell agreement? These can include death, long-term disability, voluntary or involuntary termination, or third party actions, such as personal bankruptcy or divorce.

5 Choose how the buy-sell will be funded. How will the exiting party be paid for their business interest? Will it be an all-cash transaction or can the transaction be financed? What insurance needs should be considered in order to provide immediate cash without causing financial harm to the company.

Which is pretty much the process I have used for years. For those having set up their businesses themselves, I have two questions:

1. Have you got a buy-sell agreement in your corporate bylaws (if you set up a corporation), your operating agreement (if you set up a limited liability company) or partnership agreement?
2. If you do have a buy-sell agreement, does it cover all the points outlined in this article?
   

You can access my other articles on buy-sell agreements here and here and here.

The Importance of Protecting Domain Names

Traverse Legal Blog makes a very good point in its Lawyers Protect Brands & Trademarks In Cyberspace. Call this another example of preventive law or how lawyers can protect a business on a front unknown to the business owner.

If a Business’ Brand is its Greatest Asset... - Domain Name News, The Domain Industry News, ICANN News, Registry News, Domainer News, Domain:

"Matt Asay for Cnet published an article called “Ten things the world can learn from open source “. It is simply a great read for any business owner and additionally, there’s a domain related angle which should be added here.

'A business’ brand is its greatest asset in driving sales. Not its IP. Not its sales team. Brand. Brand is what gives a customer trust that the product (and service behind it) is worth buying, even when another product is cheaper, easier, etc. Vendors need to invest heavily in their brands (through public relations, for example), and it’s the primary area that lawyers become supremely helpful, i.e., through trademark law. A brand should be earned and protected at all costs.'

I also suggest reading Protecting Your Trademark is Protecting Your Goodwill

Online Resource for the Small Business: The National Association for the Self-Employed

NASE is the National Association for the Self-Employed. I make no recommendations for the the organization. I have a friend who belongs but I only wish to point out a resource that focuses on the small business.

"The NASE was founded in 1981 to provide day-to-day support, benefits and consolidated buying power that traditionally had been available only to large corporations. Today, the NASE represents hundreds of thousands of entrepreneurs and micro-businesses, and is the largest nonprofit, nonpartisan association of its kind in the United States.

Since its start-up, the NASE has been an important partner in the explosion of micro-businesses in the United States, supporting the interests of the self-employed with benefits and advocacy initiatives aimed at leveling the playing field between these businesses and larger corporations."

Businesses Check Your Software Licenses!

Why? Check out The IBJ's NewsTalk blog:

"Author Solutions, the Bloomington company that helps people publish their own books, has admitted to using copies of software from Adobe, Microsoft and Symantec.

The penalty? $50,000.

Author Solutions says the violations began under prior ownership and that it cooperated with the investigation.

China is often blamed as a hotbed of software piracy, but what about here? In your experience, how common is it?"

The Indianapolis Business Journal published a story on this case under the headline Publisher hit with $50,000 for software violations.

Contracts: Read' em!

SmallBizResource.com has something I wished I written in Small Print, Big Consequences:

"When you take the time to read a contract before you sign it, you can try to get clauses like that changed. If a company wants your business badly enough, and the change is minor, (i.e., no early cancellation fee), they may agree to the change. But once you sign on that proverbial dotted line and start using the product or service, you'll have little luck getting things like early cancellation fees or other clauses you think are unfair changed."

Online Resource: Business Valuation Resources

Valuing the closely-held business is a tough but important thing. When selling a small business, the question of the business' value comes into play. The business' value also becomes a key point when a member of the business exercises a right to sell their interest. Use Business Valuation Resources And More . . . to educate yourself on valuing a business:

"ValuationResources.Com is a free resource guide to business valuation resources, industry and company information, economic data, and more. Designed as a comprehensive resource guide for business appraisers, the site's audience includes a broad mix of business owners, professionals, students, and other parties interested in business valuation and industry information."

It's Summertime and Time for Small Businesses Checkups

lexisONE(R) reprinted Small Businesses Should Plan Checkup and is worth taking a look at for business owners - although I would bring the business' lawyer as well as accountant for the checkup:

"Accountants and tax professionals say the summer is a good time to take stock of a company and see whether it's meeting its goals and whether there's enough cash on hand for tax payments. It's also time to make decisions about equipment purchases and other capital spending for the second half of the year.

'You want to assess, are you making money or are you losing money,' said Barbara Weltman, a tax attorney in Millwood, N.Y., and author of 'J.K. Lasser's Small Business Taxes.'

This may sound overly simplistic, but tax professionals say many owners really don't know where their companies stand, and those who are losing money need to find that out fast and start making some changes. Companies that are doing well should probably start thinking about their options for example, should the owner or owners withdraw money or leave it with the business to fund its future growth."

IRS Products for Nothing, but No Free Chicks

Thanks to David Goldman and The Florida Estate Planning Blog for pointing me to five free business products from the Internal Revenue Service. Mr. Goldman lists the products with a brief discussion, so take a look at his blog.

Small Business Administration Resources for Small Business

For start ups or existing small businesses, the SBA has a portal page here. Too much to easily summarize, I suggest bookmarking for future study.

Are you ready for tax time?

Read Find tax breaks for your business before seeing your accountant. You do have an accountant for your business, right?

New Trademark Blog and Declaratory Judgments

What is a declaratory judgment suit? I am glad you asked that question as I found a very good description of declaratory judgment suits in Dilution by Blurring's Declaratory Judgment Actions. Here is the question's answer from the article:

What is a “declaratory judgment”? A declaratory judgment is a judgment from a court that declares the rights of the parties in a dispute.

When would someone file an action for a declaratory judgment? Typically, a person files a declaratory judgment action when another person threatens them with litigation. In the trademark context, if Apple, for example, threatened to sue BlueAir for trademark infringement and BlueAir does not think that they are infringing Apple’s mark, then BlueAir can file a “dec action” in federal court to have the court determine who’s right as they did in this case.

I never get to use declaratory judgments very often but they do have their limits - as noted in the article.

From what I have seen, I like Dilution by Blurring. The blog takes on trademark law in a way that business owners as well as lawyers can understand.

Small Business Resources for Today

Business.gov - this site call itself the business link to government.

Office of Advocacy U.S. Small Business Administration: sign up for regulatory alerts from the SBA.

Use the SBA publications and newsletters to keep up with what is going on and for Indiana there is this:

INDIANA BREAK

(2,956) The Indiana Business Resource, Education, And Knowledge (BREAK) newsletter provides resources to help small businesses start and grow.

Business Information: Dell Offers

Since it is free, I see no reason to mention Financial Management Made Easy from Dell Small Business. The site describes the program like this:

Are you doing everything you can to automate and secure your business finance processes?

Accounting and financial data and process management are essential parts of running a successful small business. Also, compliance and reporting requirements are more stringent than they’ve ever been.

Let experts from PC Magazine and the American Institute of Certified Public Accountants (AICPA) demystify business finance and accounting.

This three-part course consists of three on-demand lessons, each of which is accompanied by downloadable coursework. Best of all, this course is free! All you need is a Web browser to participate, and you can go through the lessons at your leisure.

Talking About Flat Fees - Recording Time

Take a look at Interesting Policies On Recording Time from In Search of Perfect Client Service. The time spent recordig time takes away from doing work for clients. I find that an inconvenient fact that makes hourly fees even less attractive. Which just adds to the arguments for flat fees I wrote about in A Lawyer for Your Business and How to Afford One.

General Businsess Information

Take a look at The Small Business Wiki.

What is a wiki? Think collaboration with lots and lots of people. Wikipedia starts its description of wikis with this:

A wiki is software that allows users to create, edit, and link web pages easily. Wikis are often used to create collaborative websites and to power community websites. They are being installed by businesses to provide affordable and effective Intranets and for Knowledge Management. Ward Cunningham, developer of the first wiki, WikiWikiWeb, originally described it as "the simplest online database that could possibly work".^[1] One of the best known wikis is Wikipedia.^[2]

What has this to do with business? If this wiki develops as others have (think Wikipedia), this may be a good resource for businesses - especially small businesses.

Legal Literacy writes about the intersection of law and business - a subject often raised on this blog.

The purpose of this blog is to make visible the links between business and law. It uses current events and stories and to help you learn from other’s mistakes and raise awareness of the legal environment of business — how it can help you and how it can hurt you. The goal is to bridge the gap between these two disciplines to help you unleash the power of Legal Leverage®.

This blog is based on the book The Business Guide to Legal Literacy: What Every Manager Needs to Know About the Law (Jossey-Bass, 2006). As the Wired GC wryly noted, “It’s cheaper than a lawsuit” and is available through your favorite bookseller, including Amazon.

Since I often touch on intellectual property topics (trademarks, trade secrets, copyrights), IPWatchdog.com gives even more information:

IPWatchdog.com is dedicated to providing a free, reliable and easily understandable resource on intellectual property law and related topics. We promise to demystify intellectual property and explain to you what it is, why you would want to consider obtaining intellectual property rights and how to go about obtaining worthwhile intellectual property protection. We also explain various pitfalls to avoid, as well as what you can do to help yourself.

The founder of IPWachdog.com is Gene Quinn, who is a patent attorney, law professor and author. He launched IPWatchdog.com in October of 1999, and since that time the site has been a trusted resource on intellectual property for over 1 million unique visitors who have come here for information and news.