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Small Business Survival Guide Starting, Protecting, and Securing Your Business for Long-Term Success AUTHOR:  Cliff Ennico...
<ul><li>Thirty million Americans are involved in small businesses and entrepreneurial start-ups.  Unfortunately, statistic...
Chapter 1 - Your Competitors: They’re Out There <ul><li>There are four types of competitors you must watch out for: </li><...
Chapter 2 - Your Creditors: Your Worst Nightmare <ul><li>Two Types of Creditors </li></ul><ul><ul><li>The financial credit...
Chapter 3 - Copycats: “The Sincerest Form of Flattery” <ul><li>If your business runs successfully, you will soon encounter...
<ul><li>Preventing Theft of Tangible Goods </li></ul><ul><ul><li>Put locks on all your doors. </li></ul></ul><ul><ul><li>I...
Chapter 4 - Crooks, Flakes and Frauds -- in a Word, “Thieves” <ul><ul><li>An agreement not to compete within a fixed perio...
Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><li>Motivating Your Employees Without...
Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><ul><ul><li>Do not be emotional. </li...
Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><li>Dealing with Deadbeat Customers a...
Chapter 6 - The Government:  Your Biggest Partner <ul><li>Under-Reporting Income </li></ul><ul><ul><li>Avoid payments in c...
<ul><li>Statistics show that more than 50% of marriages in the United States end in divorce.  Furthermore, divorce courts ...
<ul><li>It is not easy to dissolve a partnership. In fact, the only way to get rid of a business partner is to buy him or ...
<ul><li>When going into business with friends or family, it is best to follow the following advice: </li></ul><ul><ul><li>...
Chapter 10 - Heirs, Successors, and Old Age <ul><li>Someday you are going to have to retire and it is best that you start ...
Chapter 11 - Lawyers, Accountants, and Other Professionals: How They Can Steal Your Success <ul><li>Finding the Right Lawy...
Chapter 12 - Yourself: “I Have Met the Enemy, and It is Me” <ul><li>Here are some tips on how you can mold yourself to bec...
Chapter 12 - Yourself: “I Have Met the Enemy, and It is Me” <ul><li>Building a Board of Advisors </li></ul><ul><li>Here ar...
BusinessSummaries.com is a business book Summaries service.  Every week, it sends out to subscribers a 9- to 12-page summa...
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Small Business Survival Guide

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Small Business Survival Guide

  1. 2. Small Business Survival Guide Starting, Protecting, and Securing Your Business for Long-Term Success AUTHOR: Cliff Ennico PUBLISHER: Adams Media Corporation DATE OF PUBLICATION: 2005 NUMBER OF PAGES: 220 pages
  2. 3. <ul><li>Thirty million Americans are involved in small businesses and entrepreneurial start-ups. Unfortunately, statistics show that more than 80% of small businesses fail within their first five years. Business owners often fall prey to greedy lawyers and accountants, cut-throat competition, and mounting debts and taxes. </li></ul><ul><li>As a small business owner, you need to protect yourself against creditors, crooks and competitors. Author Cliff Ennico provides you with effective and affordable strategies for conquering small business predators. </li></ul>THE BIG IDEA
  3. 4. Chapter 1 - Your Competitors: They’re Out There <ul><li>There are four types of competitors you must watch out for: </li></ul><ul><ul><li>Direct - has targeted the same customers you have; is trying to trigger the same fears and passions in your clients to persuade them to buy; </li></ul></ul><ul><ul><li>Indirect - has targeted the same customers you have; is trying to trigger the same fears and passions in your clients to persuade them to buy; </li></ul></ul><ul><ul><li>Actual - is in business today. </li></ul></ul><ul><ul><li>Potential - will be in business in the future and has superior economies of scale. </li></ul></ul><ul><li>Four Ways to Leapfrog the Competition </li></ul><ul><ul><li>Focus on a niche in the market that is not being served enough by your competition and saturate it. </li></ul></ul><ul><ul><li>Get intellectual property protection. </li></ul></ul><ul><ul><li>Get big fast by launching major marketing and distribution campaigns. </li></ul></ul><ul><ul><li>Take things to the next level by changing the way people view your product or service. </li></ul></ul>
  4. 5. Chapter 2 - Your Creditors: Your Worst Nightmare <ul><li>Two Types of Creditors </li></ul><ul><ul><li>The financial creditor - anyone who lends money to your business (i.e. bankers, a rich relative, etc.) </li></ul></ul><ul><ul><li>The judgment creditor - people who got a judge or the law to agree that you owe them money (i.e. a man who injures himself in your store). </li></ul></ul><ul><li>How to Avoid “Veil Piercers” </li></ul><ul><li>Here are three disciplines you must adopt to eliminate the threat of veil piercers: </li></ul><ul><ul><li>Use your business name everywhere. </li></ul></ul><ul><ul><li>Maintain a separate checking account. </li></ul></ul><ul><ul><li>Use a signature block that specifies the corporation’s name as well. </li></ul></ul><ul><li>Here are other tips you can use: </li></ul><ul><ul><li>Consider transferring some of your personal assets to your spouse to protect assets against creditors. </li></ul></ul><ul><ul><li>Look into insurance as a defense against liability. </li></ul></ul><ul><ul><li>Treat your clients </li></ul></ul>
  5. 6. Chapter 3 - Copycats: “The Sincerest Form of Flattery” <ul><li>If your business runs successfully, you will soon encounter people who will attempt to compete directly with you or people who will start knocking off your products or services. Relax. Remember that imitation is the sincerest form of flattery. Besides, there are always ways to deal with this. </li></ul><ul><li>Here are some tips on how to deal with copycats: </li></ul><ul><ul><li>Remember that intellectual property is your company’s most valuable asset. Since your idea can not be legally protected, do not talk about it to anyone who has not signed a nondisclosure agreement. </li></ul></ul><ul><ul><li>Protect your business name. The best way to do this is to register a trademark or a copyright. </li></ul></ul>
  6. 7. <ul><li>Preventing Theft of Tangible Goods </li></ul><ul><ul><li>Put locks on all your doors. </li></ul></ul><ul><ul><li>Install bars on your windows, especially if you are in a high-crime area. </li></ul></ul><ul><ul><li>Use alarm systems. </li></ul></ul><ul><ul><li>Put your valuables in a heavy safe that is bolted to the floor. Put it in an inconspicuous place such as an attic or basement. </li></ul></ul><ul><ul><li>Keep a vicious, barking dog for a pet. </li></ul></ul><ul><ul><li>Remove trees or signage that would enable burglars to gain entry into the premises without being seen. </li></ul></ul><ul><li>Preventing the Theft of Ideas and Trade Secrets </li></ul><ul><ul><li>Have your employees sign the following agreements: </li></ul></ul><ul><ul><li>A confidentiality agreement. </li></ul></ul><ul><ul><li>An agreement not to solicit customers or employees for a fixed period of time upon termination of employment. </li></ul></ul>Chapter 4 - Crooks, Flakes and Frauds -- in a Word, “Thieves”
  7. 8. Chapter 4 - Crooks, Flakes and Frauds -- in a Word, “Thieves” <ul><ul><li>An agreement not to compete within a fixed period of time upon termination of employment. </li></ul></ul><ul><ul><li>An ownership of intellectual property agreement. </li></ul></ul><ul><li>Checking Our Potential Partners, Employees, and Consultants </li></ul><ul><ul><li>Ask for reference checks. </li></ul></ul><ul><ul><li>“ Google” candidates on the Internet. </li></ul></ul><ul><ul><li>Hire private investigators. </li></ul></ul>
  8. 9. Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><li>Motivating Your Employees Without Giving Away the Store </li></ul><ul><ul><li>Remember that you can’t ask employees to do something simply because you are the boss. </li></ul></ul><ul><ul><li>Let employees know that their success depends on their performance and adherence to work policies and not their personal relationship with you. </li></ul></ul><ul><ul><li>Provide incentives on a group basis and not on an individual basis. </li></ul></ul><ul><ul><li>Be humane. </li></ul></ul><ul><ul><li>Make your employees see the logic in what they are doing. </li></ul></ul><ul><li>Preventing Lawsuits from Ex-Employees </li></ul><ul><ul><li>Document the employee’s performance and provide at least one “fair warning” before you terminate employment. </li></ul></ul><ul><ul><li>Conduct an exit interview. Here are some tips: </li></ul></ul><ul><ul><ul><li>Have a witness present. </li></ul></ul></ul><ul><ul><ul><li>Explain clearly your expectations and how they had not been met. </li></ul></ul></ul>
  9. 10. Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><ul><ul><li>Do not be emotional. </li></ul></ul></ul><ul><ul><ul><li>Keep the meeting short and go straight to the point. </li></ul></ul></ul><ul><ul><ul><li>Schedule the meeting on a Monday and not a Friday. </li></ul></ul></ul><ul><ul><ul><li>Make sure that the employee is locked out of the computer system prior to the exit interview. </li></ul></ul></ul><ul><ul><ul><li>Ask for their keys to the office and other company property they might have. </li></ul></ul></ul><ul><li>Good Contracts Make Good Clients </li></ul><ul><ul><li>Do not give your customers a chance to cheat you. </li></ul></ul><ul><ul><li>A good solid contract should have the following: </li></ul></ul><ul><ul><ul><li>The services you will perform. </li></ul></ul></ul><ul><ul><ul><li>The services you will not perform. </li></ul></ul></ul><ul><ul><ul><li>The amount you will be paid. </li></ul></ul></ul><ul><ul><ul><li>The assumptions underlying your fee quote. </li></ul></ul></ul><ul><ul><ul><li>When you will be paid. </li></ul></ul></ul><ul><ul><ul><li>The consequences to the client should payment not be made. </li></ul></ul></ul>
  10. 11. Chapter 5 - Suppliers, Customers, Employees, and Contractors: Keeping Them Happy <ul><li>Dealing with Deadbeat Customers and Winning </li></ul><ul><ul><li>Choose your customers. </li></ul></ul><ul><ul><li>Get paid up front. </li></ul></ul><ul><ul><li>Charge interest on overdue invoices. </li></ul></ul><ul><ul><li>Get leverage over your customer. </li></ul></ul><ul><ul><li>Go over their heads. </li></ul></ul><ul><ul><li>Develop a mean </li></ul></ul>
  11. 12. Chapter 6 - The Government: Your Biggest Partner <ul><li>Under-Reporting Income </li></ul><ul><ul><li>Avoid payments in cash. If you are still given cash, provide a written receipt and keep a copy for yourself. </li></ul></ul><ul><ul><li>Keep a separate checking account for your business. </li></ul></ul><ul><ul><li>When depositing multiple checks, record each deposit separately. </li></ul></ul><ul><ul><li>Keep merchant card statements. </li></ul></ul><ul><li>Taking Too Many Deductions </li></ul><ul><ul><li>Know exactly what you can and cannot deduct; and </li></ul></ul><ul><ul><li>Keep records backing up every deduction you take. </li></ul></ul><ul><li>Government Regulation: The Need to Get Involved </li></ul><ul><ul><li>Read publications and newsletters that announce new business regulations. </li></ul></ul><ul><ul><li>Talk to small business lawyers. </li></ul></ul><ul><ul><li>Get politically involved. </li></ul></ul><ul><ul><li>Develop a relationship with a lobbyist who specializes in business regulations. </li></ul></ul>
  12. 13. <ul><li>Statistics show that more than 50% of marriages in the United States end in divorce. Furthermore, divorce courts usually provide large chunks of cash and assets to the non-working spouse. </li></ul><ul><li>As a business owner, you must be able to find ways to protect your business against an ex-spouse in possibly bitter court proceedings. The best way to do this is to find ways to safeguard your assets prior to getting married. Here are some tips you can use: </li></ul><ul><ul><li>The Buy-Sell Agreement - An agreement where the founders of a business agree that if something happens to a founder, the other founders will buy the departing founder’s stake. </li></ul></ul><ul><ul><li>The Prenuptial Agreement - An agreement that states that the spouse has no interest in the entrepreneur’s business. </li></ul></ul><ul><ul><li>The Disclaimer Agreement - A simple letter from a spouse that claims that in the event of a divorce, he or she will not lay claim to the other party’s shares in a corporation. </li></ul></ul>Chapter 7 - Spouses and Ex-Spouses: Potential Business “Thieves”?
  13. 14. <ul><li>It is not easy to dissolve a partnership. In fact, the only way to get rid of a business partner is to buy him or her out for an agreed-upon price. Unfortunately, sometimes partners just don’t hold up to their end of the bargain. Here are some strategies to get rid of a partner: </li></ul><ul><ul><li>Sign employment or independent contractor agreements. </li></ul></ul><ul><ul><li>Create a buy-sell agreement. </li></ul></ul><ul><ul><li>Use the “Golden Rule” Buyout where parties agree that each partner can offer to buy each other out for a price determined by the offering partner. </li></ul></ul>Chapter 8 - Business Partners: Entering and Exiting Partnerships
  14. 15. <ul><li>When going into business with friends or family, it is best to follow the following advice: </li></ul><ul><ul><li>Choose to go into business with them because they complement your strengths and weaknesses; and they have something to contribute to the business. </li></ul></ul><ul><ul><li>Treat them the same way you would treat a total stranger. </li></ul></ul><ul><li>Here are other tips on going into business with your friends and family: </li></ul><ul><ul><li>When a family member agrees to invest in your business, always be clear as to whether the money is a loan or an investment. </li></ul></ul><ul><ul><li>Make sure everything is on paper. The fact that they are your family and friends does not make exempt them from filling up the paperwork. </li></ul></ul>Chapter 9 - Family and Friends: Should You Do Business with Them?
  15. 16. Chapter 10 - Heirs, Successors, and Old Age <ul><li>Someday you are going to have to retire and it is best that you start planning for your golden years. Here are some things that you should definitely start working on today for a brighter future tomorrow: </li></ul><ul><ul><li>Make sure you have insurance. Purchase life insurance, disability insurance and long-term care insurance. </li></ul></ul><ul><ul><li>You need a retirement plan. Choose a plan that sets aside the most amount of money tax-free for your retirement. </li></ul></ul><ul><ul><li>Transfer your business assets by providing gifts during your lifetime: </li></ul></ul><ul><ul><ul><li>Lifetime gifts. </li></ul></ul></ul><ul><ul><ul><li>Family Limited Partnerships . </li></ul></ul></ul><ul><ul><li>Transfer your business assets upon your death with: </li></ul></ul><ul><ul><ul><li>“ Key Person” Life Insurance. </li></ul></ul></ul><ul><ul><ul><li>Buy-Sell Agreement with Life Insurance. </li></ul></ul></ul><ul><ul><ul><li>Credit Shelter Trust. </li></ul></ul></ul><ul><ul><ul><li>Generation-Skipping Trusts and Dynasty Trusts. </li></ul></ul></ul>
  16. 17. Chapter 11 - Lawyers, Accountants, and Other Professionals: How They Can Steal Your Success <ul><li>Finding the Right Lawyer </li></ul><ul><ul><li>Hire a lawyer before you get sued. </li></ul></ul><ul><ul><li>Decide between big or small law firms. </li></ul></ul><ul><ul><li>Choose lawyers with skills in contracts, business organizations, taxes and licenses, and intellectual property. </li></ul></ul><ul><ul><li>Follow your instincts. </li></ul></ul><ul><li>Ten Ways to Drive Your Lawyer or Accountant Nuts </li></ul><ul><ul><li>Forgetting that lawyers are businesspeople. </li></ul></ul><ul><ul><li>Waiting until the last minute to call a lawyer. </li></ul></ul><ul><ul><li>Expecting Park Avenue service for Wal-Mart rates. </li></ul></ul><ul><ul><li>Not being up-front about deadlines. </li></ul></ul><ul><ul><li>Playing the “gotcha” game or sending the message that you cannot wait to sue him or her for malpractice. </li></ul></ul><ul><ul><li>Not responding quickly to requests for information. </li></ul></ul><ul><ul><li>Not confirming a fee quote in writing. </li></ul></ul><ul><ul><li>Over-negotiating the free. </li></ul></ul><ul><ul><li>“ Sandbagging” the lawyer by asking for a discounted fee and then hitting them with a highly-complex job. </li></ul></ul><ul><ul><li>Sending important confidential information through e-mail. </li></ul></ul>
  17. 18. Chapter 12 - Yourself: “I Have Met the Enemy, and It is Me” <ul><li>Here are some tips on how you can mold yourself to become a better entrepreneur: </li></ul><ul><ul><li>Never let your enemies see your weaknesses. </li></ul></ul><ul><ul><li>Do not show insecurity, fear, or lack of knowledge and experience. </li></ul></ul><ul><ul><li>Remember that self-confidence is vital to your success. </li></ul></ul><ul><ul><li>You must know your weaknesses. </li></ul></ul><ul><li>Avoiding “Willy Loman Syndrome” </li></ul><ul><ul><li>Willy Loman was a character from the classic tragedy, Death of a Salesman. Willy was unsuccessful and he eventually committed suicide. Here are some lessons you can learn from his story: </li></ul></ul><ul><ul><li>Don’t believe your own B.S. </li></ul></ul><ul><ul><li>Sometimes the people who stand in your way are the ones who love you. </li></ul></ul><ul><ul><li>Find out what works and keep doing it. </li></ul></ul>
  18. 19. Chapter 12 - Yourself: “I Have Met the Enemy, and It is Me” <ul><li>Building a Board of Advisors </li></ul><ul><li>Here are five people that you should keep on your board of advisors: </li></ul><ul><ul><li>Your accountant or bookkeeper. </li></ul></ul><ul><ul><li>Your lawyer. </li></ul></ul><ul><ul><li>An insurance agent or benefits planner. </li></ul></ul><ul><ul><li>A mentor. </li></ul></ul><ul><ul><li>Your spouse, significant other, or a loved one. </li></ul></ul>
  19. 20. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES

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