A Takeaway from Ferguson – Protection for Small Business Owners

By Brittany Robinett

FergusonUnless you’ve been living under a rock, you have undoubtedly heard about the racial tension and civil unrest surrounding recent events in Ferguson, MO. On August 9th, Michael Brown, an unarmed black teenager, was shot fatally shot by a white police officer, Darren Wilson. Protests emerged amidst numerous controverted facts and unanswered questions, sparking cries of racism in the American justice system. Since the shooting, local entrepreneurs began to experience a decline in business. As tensions escalated, many were forced to board up windows and shut down.

On November 24th, the St. Louis County prosecutor announced the grand jury’s decision not to indict Wilson, triggering a local and national uproar. Riots ensued, leaving many small businesses looted, vandalized, or destroyed. Many business owners were by themselves, because they lacked the financial resources necessary to recover from such a catastrophic loss. In a few short minutes, many livelihoods were sacrificed in a community that had already lost so much.

The events of Ferguson, MO illustrate just how easily small businesses can bear the costs of civil unrest. Ferguson businesses find themselves asking, “How much does it cost to recover? Who bears the costs?” The tumultuous events have left many business owners wondering how they would cope in the same situation. Protests and riots are not as easily insured against as natural disasters and fires, because there’s no way to assess the risk and potential loss stemming from human emotion or civil discord. However, while those risks are unforeseeable and incalculable, they are not completely uninsurable.

The smaller your business, the more challenging and costly it is to prepare for extreme situations. As a business owner, it is crucial to consider all contingencies affecting your business – no matter how unlikely they might be. It is important to consider those protections available to you. Hopefully, some of the following steps will provide some guidance on how to combat the risks of a civil uproar.

Investigate your insurance coverage.

First and foremost, it is important that you know what exactly your insurance covers and what coverage options are actually available to you. Many small businesses are eligible for a “Business Owner’s Policy” (BOP), which resembles a bundled policy of property insurance and general liability insurance. Under a BOP, there might be a way to recover lost income and expenses incurred when business comes to a halt as a result of some covered event. BOPs can include “business interruption insurance,” which reimburses a business for some of those losses. This business income coverage is not automatically triggered with the mere passing of a covered event. Certain requirements must be met, such as severe physical damage to the property that either prevents the business from operating or prevents customers/employees access, or a government-imposed curfew or restriction that keeps people from accessing the business.

As a business owner, you want ask your agent what events and harms are specifically covered under your current policy. Ask whether coverage includes business interruption insurance, and if it does, find out whether your business is eligible. Even where you are eligible, it is important to determine whether your policy covers only specific, named events or it covers all events that might result in harm to your business. If your insurance does not offer such coverage, it might be worth shopping around to determine whether another policy might better protect you and your business.

Backup your data.

Particularly where so much business data is stored electronically, it is crucial to back your data to an offsite location. Even absent a risk of rioters stealing or destroying your business, it is incredibly unwise to have all of your business’s electronic data stored to one physical location. There are a number of online backup services for small businesses. If you do not already have a system in place, you would be very wise to research which option suits your business and your budget best. (Click here to review some of the top-ranking systems.)

Budget for emergencies.

It never hurts to budget for emergencies. Depending on your financial situation, “budgeting” might mean investing at the outset or storing funds in case necessity arises. Should you invest beforehand, you might be wise to install roll-up doors or security grills. Doing so will provide you a quick-and-easy mechanism to board up your business, should the situation arise. Should you elect to put off “boarding up” unless necessary, make sure you have funds stored away to purchase plywood and other necessary materials to secure your place of business.

Invest in a security system.

In the context of emotion-driven people, do security systems serve a significant deterrence function? Maybe not. However, being able to identify a culprit might enable you to pursue civil damages from harms caused. If alarms enough are not to dissuade someone from intruding, video surveillance might provide you a remedy for that intrusion. Additionally, given that social media drives today’s news outlet, surveillance might provide some disincentive.

Ultimately, no state, no city, and no business are immune to the risk of a civil uproar. Like any storm, once you are in the path of destruction, you are bound to get hit. All you can do is have faith in the safeguards you have in place and hope for the best.

Bexley Law Firm, LLC
http://www.bexleylawfirm.com

About the Author:  Brittany Robinett is a rising third year law student at the Georgia State University College of Law.

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Thin Mints and Business Hints

The Simple Brilliance Behind Girl Scout Marketing Practices

By Brittany Robinett

The year of 2014 has ushered in several stories about successful Girl Scouts members who have rightfully earned their “cookie business” badge, as several made headlines for selling an abundance of America’s favorite cookies.

Most of us are familiar with the hilarious story that came out this February about a young scout from California who ingeniously set up shop in front of a medical marijuana clinic. Within a mere two hours, she managed to sell over 100 boxes of cookies. (This, of course, was not well-received by many chapters, who found it inappropriate for its members to sell in front of adult establishments.) Then, this March, we heard about an Oklahoma City scout who broke the all-time cookie sells record, selling up to 18,107 boxes within a seven-week period. How did she reach this record? According to her, she simply asked every person that she met to buy a box.

Thin MintIt’s interesting to contemplate how much media attention the organization’s cookie sales receive. What enables these young girls, ranging from ages of 5 to 17, to influence their communities enough to create and maintain what has grown into a $700 million empire? (Given, our taste buds have all been captured by the spiritual experience that is a Do-si-do.) There must be some common sense principles at work that businesses of all sizes can take note of and employ.

Along with leadership skills and community involvement, the organization aims to instill entrepreneurial skills into its members. What seems to impress the media the most, however, is the outgoing marketing strategy that the girls learn to employ. At the end of the day, the Girl Scouts is not a business – it’s a youth organization that operates at a national level. However, although a national organization, cookies must be sold and bought locally from a Girl Scout. Perhaps this focus on a national brand at a local level shows just how important it is for customers to attach people to a brand.

The Girl Scout’s online marketing materials cite the number of facts that the girls are advised to consider during the selling season. Summed up, each of these points encourages the girls to sell their cookies with four customer-based principles in mind:

  • Customer outreach
  • Customer loyalty
  • Customer interest

Why do you see local scouts selling outside of Kroger or in front of your neighborhood park? It’s because they recognize the importance of coming to the customer. The Girl Scouts do not have shops or stores; rather, cookies are sold seasonally, and quite frankly, nobody keeps track of when Thin Mints are “in season.” Scouts understand that it is not the customer’s job to keep informed about their product; rather, they realize a duty as young entrepreneurs to keep their customer base abreast about what they can “bring to the table.” They bring the cookies to the customer; they are encouraged to offer samples. Whatever it takes to earn and secure a customer, that’s what they aim to do. Ultimately, they operate with the ideal intention of keeping no person in the dark about their product – something all businesses should strive towards. Whether it’s keeping clients up-to-date through the mail, phone calls, or a gentle reminder through a discounted service, businesses are responsible for reminding clients why they are worth it.

Girl Scout customers tend to be a loyal base, buying annually when the chance arises. Of course, repeat purchase practices cannot develop if past customers are not given chances to buy in subsequent years. One frequently undervalued way to thank a customer for their support is to follow-up and ask that they subscribe to your services again. Offer loyalty points and discounts to returning customers, and extend those offers to individuals who have not come back yet. Keep record of services or products needed by individual customers so that you can tailor those benefits accordingly. At the end of the day, every customer is a person, and every person wants to feel remembered.

A contributing factor to the Girl Scouts repeat customers is not just a love for Thin Mints, but a co-existing love for supporting a cause. The Girl Scout organization has transparent goals and principles that it has formed a business model upon, and most community members are willing to support a cause they can understand. Make clear to your customers what your business stands for, be it in the way your employees interact with them or the advertising materials that you send their way. People might not always care about what someone stands for; however, they generally care that they stand for something. Make sure you know what that is, whether it is providing a subliminal sandwich or saving the world.

At the end of the day, children can teach us a lot. Let them!

Bexley Law Firm, LLC
http://www.bexleylawfirm.com

About the Author:  Brittany Robinett is a rising third year law student at the Georgia State University College of Law.

 

BYOD – Making Mobile Devices Work for Your Business

By Brittany Robinett

Today, many businesses are implementing “bring-your-own-device” policies, which permit employees to conduct company business on their own mobile devices.  Encouraging the use of employee-owned devices can save employers the costs of purchasing and maintaining technology, while motivating employees to work harder through increased flexibility and mobile access to the workplace.android-199225_640

Decreased overhead expenses?  Increased workplace productivity?  Sounds like a win-win.

However, allowing employees to conduct company business on their own devices can prove less than cost-effective, as it subjects businesses to multiple security and liability risks.  The greatest of these risks are caused by the removability of devices from the workplace, and the accessibility of confidential company data outside of the workplace.  Employers can mitigate these risks by creating protocols to decrease dangers posed by using personally-owned devices.

Allowing employees to conduct business on their personal devices puts stored data at risk, because that data leaves the workplace.  This non-stationary data may fall prey to wandering eyes, as employees may connect to public access points or private access points that are not properly configured.  Plus, mobile devices are frequent targets of theft.  Passcodes and other security features are not foolproof, and they do not necessarily protect the contents of memory cards or hard drives.  Some of these dangers may be eliminated by requiring employees to use a VPN (or a “virtual private network”).  A VPN allows employees to access their employer’s intranet securely when working remotely.  These networks require authentication prior to access, which helps protect against data breaches.

Employers should always have breach response plan in place.  These plans should focus on complying with regulation requirements, assessing risks of potential breaches, and preventing future breaches.  When it becomes clear that data has been compromised, immediate action should be taken to determine whether federal and state regulations require the data to be reported.  Once a determination is made, necessary parties must be immediately notified.  Even if no regulations demand notification, it is important to determine what data has been compromised, what risk the compromise poses, and what steps could have prevented the compromise of such data.  Encourage employees to report any breaches; it should be remembered that they, too, are exposing themselves to greater legal liability, and should be punished for blatant wrongdoing, not necessarily accidents.  Employers can encourage reporting by providing employee training to recognize at-risk situations data apprehension.  (Note: As the use of mobile technology within the workplace is a growing trend, it is important to keep abreast of new regulations, as the government has given the topic a great deal of attention.  Attorney consult can ensure that nothing goes unnoticed and save employers the hassle of conducting their own research.  They can also provide oversight in drafting company protocol and employee consent agreements.)

Companies should lay out clear frameworks for data preservation and destruction on personal devices.  Personal devices present a unique problem when it comes to preserving data for legal discovery.  Legal counsel can help businesses determine whether a preservation duty exists and what that duty requires.  Employers may demand that employees sign consent agreements, recognizing that their devices may be subject to search and seizure should litigation require it.  Signing a consent agreement puts employees on notice that their devices could be subject to future search and seizure processes.  (This is especially important, as personal and professional information often become intermingled with the dual-use of mobile devices.)  Also, business owners are advised to maintain duplicates of all company-related information from employee devices.  That way, data can still be produced, if not from the original device.

Once a duty to preserve disappears and data is no longer needed, employers should make sure that company data is properly destroyed from device storage.  Simply “deleting” data, such as documents, emails, and contacts from a memory card is not always enough, as the device’s internal storage may retain information.  For this reason, employers should require that devices be restored to factory settings prior to an employee parting with a device.

Bexley Law Firm, LLC
http://www.bexleylawfirm.com

About the Author:  Brittany Robinett is a rising third year law student at the Georgia State University College of Law.

Estate Planning: Safeguarding Your Business when Hindsight Is Not an Option

By Brittany Robinett

“What would you do to protect your loved ones?”  For most people, the instinctual response is “anything.”

Hourglass

It should follow that those individuals would plan to protect their families in case something unfortunate, such as terminal illness or death, befell them.  Statistics, however, speak to the contrary.  A recent poll revealed that too few Americans – a maximum of 50% – have wills in place.  Even fewer have arranged a living will or power of attorney to carry out their wishes in the event of incapacitation.  Perhaps such inaction stems from the misconception that wills are for the wealthy or from fear of thinking about the unpredictable end.  Regardless of social status, however, surprises are rarely welcomed by the survivors left to pick up the pieces.

Suppose I instead asked, “What would you do to protect your business?”  It seems to escape many small business owners that their personal estate includes, in fact, their business, and it is in their best interest to establish a plan for it to continue in their absence.  For both emotional and financial reasons, owners often resist relinquishing control; yet transfer of ownership, like death, is inevitable.  Planning for the future not only eliminates stress on the bereaved, but it is also cost-effective.

Consider some consequences that could arise if your business’s affairs were not in order.  If death or illness struck, could family members and co-owners tie up loose ends?  Would someone be familiar with all associated accounts, know how to run the business, and manage it accordingly?  How would the IRS value and tax your estate’s assets?  Would the estate be left to probate and at what expense to your loved ones?  When you weigh the risks, why wouldn’t you plan ahead?

Every business structure is unique, and the steps necessary to protect each differ.  Additionally, the personal interests of owners influence those steps.  Legal counsel can evaluate these concerns and advise the best course of action for a business to take.  While plans may differ, there are certain safeguards that all small business owners should consider adopting: a living will, a power of attorney, and a trust.

1)     A living will documents an individual’s healthcare wishes in the event of incapacitation.  Living wills ensure that these wishes will be carried out, even if the person cannot express them.

2)     Two types of power of attorney are recommended for business owners: a healthcare power of attorney and a durable financial power of attorney.  A healthcare power of attorney is a document appointing an individual to make healthcare decisions fulfilling the wishes of the incapacitated.  For various reasons, an owner might not want a person with healthcare power of attorney to have additional financial control.  Since incapacitated persons cannot legally contract, a financial power of attorney appoints someone to handle your financial affairs and run the business within the scope of your instruction.  Financial POAs may handle anything from paying bills, to handling paperwork, to managing the business in your absence.

3)     A trust permits an owner to transfer property with others while retaining some management authority and ability to recover income and benefits.  Since the trust owns your assets, there is no fear of them going into probate.  Essentially, it allows a business to run in your absence while freeing it from any personal debts and obligations upon death.

In the words of Lieutenant General Claude Christianson, “Your biggest enemy is the unknown and assumptions.”  Don’t be your own worst enemy.  Plan for today so that the fruits of your labor can be enjoyed tomorrow.  Those you leave behind will surely thank you for it.

Bexley Law Firm, LLC
http://www.bexleylawfirm.com

About the Author:  Brittany Robinett is a second year law student at the Georgia State University College of Law.

Goodwill Hunting

It could be argued that a business’s most valuable asset is its goodwill. Most business owners would likely agree that although goodwill can take years to establish, it takes only minutes to destroy.

Goodwill” is a qualitative measure of a company’s reputation, market presence, and customer loyalty. This aspect of a business is very difficult to attach a price, but any competent business will zealously guard their company’s goodwill at any cost.

While any natural disaster can destroy inventory and real estate, a store’s good reputation can withstand almost any storm. So too can the most solid of foundations be shattered by poor decisions and lousy consumer outreach.

reputation

Right now, one of my favorite shows on television is “Bar Rescue.” Bar Rescue is a reality show featuring host, Jon Taffer, a long-time food & beverage industry consultant specializing in nightclubs and pubs, who “rescues” failing bars, pubs, taverns, and grills from the brink of failure. Each episode focuses on a single failing establishment and it is up to Taffer to figure out what is the cause of the problems. Often, the root issue is a combination of poor service, management, and décor. Most of these issues can be solved with training the management and staff, retooling the drink and food menus, and renovating the interior of the restaurant or bar. In essence, the establishment gets a healthy new coat of paint and everyone is happy. Every now and then, however, Taffer has to completely overhaul everything, including the image and reputation of the establishment. Essentially, the business has so completely ruined their goodwill in its community and market that it must start from scratch.

No business should allow this to happen to itself. Reputation is more than just the sum of employee’s personalities, but a reflection of how a company conducts business. It is not just the price of goods and services, but the value offered to customers and clients. A business must always ask itself: Why should someone give me money instead of my competition? What is it that sets this business apart from any other business in that market place?

Poor goodwill is not a symptom, but the product of a diseased company culture. Whether fueled by apathy, poor management, greed, or some other cause, the result is almost always the same: failure. While some companies can survive controversy by tapping an almost limitless reserve of goodwill stored up over decades (i.e., Toyota, with its seemingly endless chain of recalls), others can falter and crumble under much less scrutiny (i.e., Kmart, which was once a titan in the superstore market, but is notorious for very low quality products and selection).

Goodwill can be cultivated and preserved by establishing sound business strategies, competitive prices, and excellent customer service.  In addition, a business must possess strong internal processes to ensure productivity and efficiency and to minimize exposure to unnecessary litigation.

A small business legal consultant can assist owners and managers in making sound business decisions to protect the company’s goodwill by providing expert advice and consultation on a host of issues, including hiring practices, employee management and compensation, vendor relationships, inventory and financial planning, and other day-to-day business decisions.

Robert S. Bexley, Attorney
Bexley Law Firm, LLC
http://www.bexleylawfirm.com

What can small businesses learn from Paula Deen?

I am an active user of Facebook. The site provides an easy to use forum to keep in touch with friends, family, and to help promote the things that interest you. It is also a good way to share ideas and to discuss the topics of the day with people from a wide variety of backgrounds and cultures. So, when a hot issue starts making its way around the country, it is inevitable that Facebook users will be there to dissect it in every way possible.

I do not want to be sued by Paula Deen, so here is a picture of a pound of butter.

I do not want to be sued by Paula Deen, so here is a picture of a pound of butter.

Case in point: Paula Deen.

For those of you who have been living on an island with a basketball named Rawlings, here’s what happened: Paula Deen, a celebrated chef that specializes in rich, savory Southeastern American cuisine, is being sued by a former manager of one of Deen’s restaurants for sexual and racial harassment.  During a deposition of Deen, she admitted to having used racial epithets in the past. Once these statements were made public, Ms. Deen clumsily attempted to apologize and ultimately made things worse.  Coupled with some problematic public statements Deen made on some television shows, several very prominent sponsors have chosen to either not renew her contract, or to dump her altogether.

In reading the various responses and replies, I noticed that many people were either dismissive of her behavior or were apathetic to the inane ramblings of yet another celebrity. The problem is that Deen is not just some television celebrity, but a restaurant owner that operates 2 locations and employs dozens of people (not to mention the crew that records and produces her show). Paula Deen is a celebrity business owner, and a business owner still has obligations to her employees and business partners. And Deen’s business owners are none too pleased.

To date, Walmart, Target, Kmart, the Food Network, Sears, Home Depot, and others have all dropped Deen.  Caesar’s Entertainment, which owns Harrah’s Casinos, will rebrand all four of their Paula Deen in-house restaurants. A spokesperson for Caesar’s Entertainment stated, “it is in the best interest of both parties to part ways.”

When entering into partnerships with another business, whether for advertising, endorsements, or for services, small businesses should always ask, “Is this in my best interest?” Due diligence is essential before chaining one’s business to any other entity.  Despite popular misconception, the Food Network did not “fire” Deen, but it did not renew her contract. A fine difference, but an important one. Had her contract not been eligible for renewal right as this controversy broke, then it would have been much more difficult for the Food Network to have terminated the relationship.

A business must sustain itself on the quality of its product or service and its goodwill within the community. Thus, regardless of the personal politics of the owners, to take unnecessarily controversial stances is to court bad publicity. Generally speaking, the best path to take as a small business owner is that of least resistance. Do not alienate your customers. Do not ostracize your business partners. Do not discriminate against your employees. Walmart, Target, Home Depot, etc. risk losing 100 customers offended by Paula Deen’s comments for every one of those who would stick with her to the gates of Hell.

Robert S. Bexley, Attorney
Bexley Law Firm, LLC
http://www.bexleylawfirm.com

Want Great Publicity? Honor a Local Hero!

In the aftermath of the horrors caused in Cleveland, Ohio by Ariel Castro, the man charged with keeping three women captive for over 10 years, one particular person has stood out.  Charles Ramsey, Castro’s neighbor, rescued the three women and then proceeded to gain national recognition after his colorful rendition of the events.  Since then, local small business owner Scott Kuhn has honored Ramsey with the “Chuck Card,” a card granting Ramsey free burgers for life.

“We want to honor our local hero with local food,” Kuhn told reporters.

In addition, Hodge’s Cleveland, the restaurant where Ramsey works as a dishwasher, unveiled a new Charles Ramsey-inspired hamburger.

Is this opportunism?  Exploitation?

No.  Plain and simple, these are the acts of good small businesses honoring a local hero for doing what was right. Ramsey refused a reward, opting instead to turn over the money to the victims. While Ramsey’s actions gained the nation’s attention,  plenty of opportunities exist in the backyards of millions of businesses nationwide.

They sayfireman-100722_640 any press is good press.  That’s not true.  Good press is good press.  Bad press is a failure on the part of a business to control their image and/or business practices. Good press, on the other hand, should be treasured and sought after. One of the best ways to gain good press, then, is to honor those in your community that deserve honoring.

Now, this is not the same as charity. Generally speaking, charity is generosity and helpfulness, especially towards the needy or suffering. An honorarium, however, is a payment for a service on which custom or propriety forbids a price to be set. What this means is that heroes do not charge for their heroism. Thus, it falls upon society to show our appreciation for their actions.

Knowing this, the rest should be easy. Apportion part of your marketing budget as honoraria to local heroes. So, if you run a carpet cleaning business and you hear about a firefighter who rescued a family, send him a letter with a gift certificate for a free house cleaning. If you sell makeup, give a complete make over to the class valedictorian at a local high school. The opportunities are limitless, the goodwill within your community is priceless, and you will know that you have done a good thing.

Robert S. Bexley, Attorney
Bexley Law Firm, LLC
http://www.bexleylawfirm.com