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05/07/2010
IconThere's A Franchise For Just About Everything... Cliff Ennico www.creators.com The conventional wisdom says nobody is starting small businesses or buying franchises anymore because of the currently strong economy. Because people can now find "safe" jobs in corporate America, the conventional wisdom says, they're less likely to take the risk of starting a business from scratch, with no regular paycheck, no benefits, etc., etc. And, as is often the case, the conventional wisdom is wrong, wrong, wrong. I've been bouncing around the country attending and speaking at trade shows the past couple of weeks, including the annual Connecticut Franchise and Self-Employment Showcase sponsored by The Entrepreneur's Source ( www.theesource.com ), a franchise brokerage network that is itself a franchise. With 25 national franchises in attendance at the one-day event, and several hundred attendees from just about every New England state looking to learn more about franchises, I can assure you that franchising is still very much alive and kicking, thank you. Steve Lehman, the organizer of the yearly showcase and an Entrepreneur's Source counselor based in Fairfield, Connecticut ( slehman@optonline.net ), explained the record attendance: "The traditional career economy no longer exists. It's up to each individual to utilize their skills to position themselves to become self-sufficient and take control of their own destiny. If they don't do it, they'll end up working for someone that did." Lehman said that the demand for franchises from Baby Boomers age 45 and up -- who are nervous about being "left behind" in the shrinking world of large U.S. corporations but who are also nervous about starting a business from scratch without the "handholding" and support that franchises offer - is stronger than ever and continuing to grow. Thinking of starting a basic retail or service business? There probably is a franchise already doing it. If you think I'm kidding, consider the following actual franchises: Ageless Remedies ( www.agelessremedies.com ), a skincare and "apothecary" medspa franchise offering a variety of skin care treatments (warning: in many states you have to be a physician to buy one of these); AllOver Media ( www.allovermedia.com ) - help small businesses in your area with "nontraditional" advertising and promotional solutions (think gas pump and taxicab rooftop ads); Aussie Pet Mobile ( www.aussiepetmobile.com ) - you buy a truck and go to people's homes to groom their pets; Colorworks ( www.colorworksusa.com ) - fix the paint scratches on people's cars; 1867 Confederation Log Homes ( www.confederationloghomes.com ) - hey, this is how Abe Lincoln got started; Entrees Made Easy ( www.entreesmadeeasy.com ) - people come to you and tell you what they want for dinner the next several days - you cook the meals for them, and they heat the meals up at home; Expense Reduction Analysts ( www.expense-reduction.net ) - you help businesses cut their costs, and take a percentage of the cost reduction; Fibrenew ( www.fibrenew.com ) - repair leather, vinyl and plastic auto seats and home furnishings; Instant Imprints ( www.instantimprints.com ) - customize teeshirts, banners, signs and promotional tchotchkes for local businesses; Interface Financial ( www.interfacefinancial.com ) - you buy a small business' invoices at a discount and collect from the customers; Mad Science ( www.madscience.org ) - set up children's parties with science-oriented themes, games and fun projects; ProShred ( www.proshred.com ) - you go around to offices shredding their documents in the back of your truck (hmm . . . a lot of potential Government work here . . . ); Robeks ( www.robeks.com ) - a restaurant chain offering fruit smoothies, yogurt drinks and other "healthy fast food" products; Spanish Fun ( www.spanishfun.net ) - teach Spanish to preschoolers; Winfree Business Growth Advisors ( www.winfree.org ) - consulting and coaching services for small business owners and entrepreneurs (hey, wait a minute, that's what I do!). Even if you're NOT thinking about buying a franchise, it's a good idea to check out the franchises that are engaged in the business you are thinking of starting on your own. Sooner or later, as these franchises grow, they will be "in your face" and you will have to deal with them as competitors. If there's a franchise with a compelling business model doing the type of business you want to do, maybe it's a sign you should call them and offer to be their local franchisee before someone else does. Just be careful . . . a lot of franchises my clients are looking at right now are "early stage" and haven't thoroughly tested their business models yet. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconABCs for the Work at Home Mom - Part 1 By Jill Hart CWAHM.com Work-at-home moms face many different challenges. From learning to accept help when needed, to building confidence in ourselves, to remembering the reasons why we chose to work from home. Below is the first in a series of tips to help work-at-home moms in the simplest of ways - the ABC's. A = Adjustments. A work at home mom must expect the unexpected. She must be prepared to adjust her schedule at any given moment for any number of reasons - a sick child, a backed up drain, or an upset client. A mom who learns to welcome these moments as a chance to show love to her family and concern for her clients will be ahead of the game in the end. Approach these "interruptions" with a great attitude and see what a difference it makes. B = Better. Works at Home Moms have to be on top of their game. To run a business as well as manage a household takes determination and scheduling. You may not feel like you have a schedule, but take a look at your day/week and see how you are spending your time. Next, think about what you can do better, what you can delegate and what would be better off removed from your schedule to allow you to spend your time in a better manner. C = Confidence. You wouldn't be a work at home mom without it. Take time to celebrate each success no matter how minute it may seem. Each success will help grow your confidence and turn you into a savvier businesswoman. D = Dry - Don't let things dry up. Keep content fresh, offer new products and services whenever possible. This will keep you motivated and keep customer returning. E = Effort - Don't kid yourself. It takes a TON of effort to make a home-based business successful. Don't give up with thing get rough. Keep plugging away - it will pay off F = Feisty - Every work at home mom has to be at least a tad bit feisty. :) Stand up for your business when need be - don't be afraid to say no when necessary. G = Generosity - When I fist began my business I sought advice from many successful work-at-home moms. One of the best pieces of advice I received was that what I gave to others would come back tenfold. I've found that to be very true. Helping others is as much a blessing to me as it is to others. H = Help - There will come a time that you'll need help. You must be willing to accept it, to allow others to do for you what you cannot. In turn, try to be a help to other when they are in need. I = If - If you don't do it, who will? Mothering is such an important role that gets overlooked so often these days. Always remember that being there for your children is the BEST gift you can ever give them. J = "Just for you" - Take a little time to do something just for you each day. Even 5 minutes of doing something you enjoy can revive a tired mommy. K = Keep - Keep your chin up. It will get better. Don't let a lag in business growth get you down. Find some creative ways to get the ball rolling again. L = Laugh - Take time to laugh with you kids each day. And don't be afraid to laugh at yourself when need be. M = Mommy - Remember, the reason you do all that you do is for those little ones who call you "Mommy." Working from home can be difficult, but it is well worth the effort. By keeping things in perspective we can reduce the stress that we put on ourselves. Remember these ABC's and you'll go far in your work-at-home career. ABOUT THE AUTHOR: Jill Hart is the founder of Christian Work at Home Moms, CWAHM.com . Hart is also the co-author of the upcoming book, Home Based Blessings, due out in November 2006 for Christian moms who want to work at home. Hart and her husband, Allen of CWAHD.com (Christian Work at Home Dads) reside in Nebraska with their two children. Permission Granted for use on Dr.Laura.com More >>

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05/07/2010
IconDallas "King Of Customer Service" Cliff Ennico www.creators.com Here's a pop quiz: who are your most important employees? You? Your senior managers? I humbly submit that your most important employees are those, regardless of rank, with whom your customers actually come into contact. You can talk all you want to about customer service and how important it is, but if your "front line" employees don't get it, neither will be your customers. I was in Dallas last week giving a presentation at the Dallas Convention Center. The center was only about four blocks away from my hotel, but they were long blocks, and between the 90-degree heat and a recent leg fracture that prevents me from walking long distances, I needed a cab to get back to the hotel after my presentation. I waited over 20 minutes, and couldn't get a cab to save my life. When one driver heard where I was going, he just took off, looking for a better fare. I was beginning to think about risking the long (for me) walk to the hotel when a member of the Convention Center's maintenance staff named Jerrold (according to his name tag) drove up in a beat-up old golf cart. "I see you're having trouble getting a cab. Where are you going?", he asked. I told him, and he said "get in, I'll take you there." I looked at the golf cart and said "in that thing? You can't drive this on a city street." Jerrold smiled at me with a mouth only half-full of teeth, and said "We don't need no roads. Hop in!" I did, and for the next 15 minutes we drove the four long blocks to my hotel . . . ON THE SIDEWALK . . . at about five miles an hour, fast enough that pedestrians had to jump out of our way. In a golf cart, there is nowhere to hide, but to make 100% sure we were seen by everyone in Dallas, Jerrold honked his horn and waved at every pedestrian he knew (Jerrold is a popular guy in downtown Dallas, and he had clearly done this before). As the golf cart lurched around lampposts and trees, sometimes missing them only by inches, I started a conversation with Jerrold: C:I really appreciate this, Jerrold. I know it's a short distance, but I've got a bum leg and I really can't walk it. J:It's my pleasure, sir. C:Don't call me 'sir'. The name's Cliff. J:I can't help that. It's how my Momma raised me. She taught me to treat everyone I meet with respect, no matter who they are. C:Your Mom is a very wise lady. People rarely treat others with respect anymore. J:Man, you know that! And it's a shame. You don't have to be in love with someone to treat them like they're somebody special. Because you never know. It's like one of those movies where you help somebody out, and he turns out to be an angel in disguise. You never know who that person is going to be. For all I know, you may be an angel!" C:(Laughing). It's not likely, Jerrold. I'm a lawyer. J:Yeah, but if you really WERE an angel, that would be a really good disguise, don't you think? You'd fool a lot of people with that one! C:You got a point there. So, Jerrold, tell me - how do I know YOU'RE not an angel? J:Oh, you can ask my boss or my Momma about that, sir . . . they'll tell you! C:Don't call me "sir". By this point we had reached the hotel. I offered Jerrold a $20 tip, which he declined. He dropped me off and, with a wave of his hand, drove the golf cart back up on the sidewalk and headed back to the Convention Center, parting the pedestrians like Moses parting the Red Sea . . . Memo to the Dallas Convention Center: you have a beautiful human being on your maintenance staff who knows more about customer service than most entrepreneurs do. His name is Jerrold, and he may or may not be an angel. Treat him with respect, because he deserves it, and also because if you don't he'll tell his Momma on you. And that's one lady I sure wouldn't want to mess with . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconBefore You Sign That Nondisclosure Agreement Cliff Ennico www.creators.com "I left corporate America a while back to start my own consulting firm. I've pitched my services to a couple of large companies, but nobody will even talk to me until I sign their standard form of nondisclosure agreement (NDA). I realize this is standard practice, but I'm started to get nervous that I might be 'signing my life away'. Could you give me some tips on what to look for when I'm given an NDA to sign?" Nondisclosure agreements (NDAs for short), also called "confidentiality agreements", are the bane of the independent consultant's existence. Most companies won't talk to you until you sign one, because they're nervous you will blab all of their trade secrets to competitors - something you as a professional would never do anyway. Most NDAs are fairly harmless, but every once in a while you will see some "gotchas" in these. Here's what to look out for. First, look at how the company defines "confidential information" in the NDA. Is the company required to tell you (preferably in writing) that something is confidential, or are you required to keep EVERYTHING you get your hands on confidential, including the copy of The Wall Street Journal you happen to pick up in their office lobby? If it's the latter (most attorneys use a "shotgun" rather than a "rifle" approach when drafting NDAs, because they really don't know what kind of information the company is going to show you) make sure the "laundry list" is reasonable. Look out for language that requires you to keep secret the "existence of a business relationship" with the company - this may prevent you from using the company as a reference after your consulting job is finished. The "laundry list" should include only items (such as customer lists and intellectual property) that any company would view as confidential and proprietary. If the list includes intangible items such as "ideas", "know-how", "skills", "concepts" or "knowledge" - be careful. The company might look at anything you learn on the job as confidential, which can cause problems for you down the road (see below). Every NDA contains two basic agreements: an agreement that you will keep all Confidential Information strictly confidential, and will not disclose it to anyone without their approval; and an agreement that you will not "use" any Confidential Information for any purpose other than to perform your consulting duties for the company. The first clause (called the "nondisclosure" clause) is relatively harmless - make sure you are permitted to disclose Confidential Information to your attorney and other employees of the company "if necessary in connection with the performance" of your duties under the agreement. It's the second clause (called the "nonuse" clause) that can sometimes be a "gotcha". If not carefully drafted, this clause can act as a "backdoor noncompete agreement", preventing you from working for other companies where you would have little or no choice but to use knowledge and information you gained while working for the company that made you sign the NDA. Most NDAs have a clause requiring you to return copies of all Confidential Information in your possession when the consulting job is done. Make sure this clause allows you to destroy the information instead of returning it as long as you certify to the company in writing that you've destroyed it. Otherwise (unless you keep meticulous records) the company may demand that you return information months or years after the consulting job is over and you just . . . can't . . . find it. It's probably a good idea to have an attorney look at the first few NDAs you are asked to sign - most attorneys will only charge a half-hour of their time. After you've done a few, you should know enough to be able to spot the issues on your own. One more thing: beware the company that "buries" an actual noncompete clause (as opposed to a "nonuse" clause) in the fine print of their "standard" NDAs without clearly labeling the agreement a "noncompete and nondisclosure agreement". If a company doesn't notify you of the noncompete language, and you spot it when reading over the NDA, save yourself some legal fees, hand the (unsigned) form back to them, and walk out the door. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconWhen You Really Have To Fire Someone: Ten Tips [Part 1] Cliff Ennico www.creators.com "I run a small printing business, and have decided to fire one of our employees for some very good reasons. She comes in late every day, is rude to co-workers (they all hate her), and has begun badmouthing the business to some of our key customers. My fear is, of course, that she will sue me. She is our only female employee, and is over 50 years of age. She also told me she is taking medication for depression. We have other workers in that age range, but no other females. I really need to get rid of her, but I can't afford to be sued either. What should I do?" If you had to describe every employer's worst nightmare, this one comes close. Firing an employee - looking someone straight in the face and telling them they no longer have a source of income - is one of the toughest things you will ever do when running your own business. It's often as hard on the person giving the bad news as it is on the person receiving it. And yet it still needs to be done, especially in a situation like this where a rebellious employee is "poisoning the well" and bringing the entire business down with her. And yet, employees DO have rights, and we should all be thankful we live in a society in which they do. If the real reason you are firing this person is because you want to make this business a "boy's club" from which women are excluded, she has every right to sue you for discrimination. Do a little soul searching before you read further, and make sure you don't have any "secret motives" that could cause you legal trouble down the road. Assuming there aren't any, and assuming this person is an "at will" employee - someone who doesn't have an employment contract that guarantees employment for a specified time period - here are ten tips to help you remove the cancer from your business with a "zero to low" risk of being sued for wrongful termination. Check your past feedback. If you have been giving this employee glowing performance reviews and a raise each year, she will understandably be shocked when you call her into your office and give her the boot. Look back at your relationship with this employee, and if you have been sending her overly positive signals, do not fire the employee immediately. Instead, start changing the signals and let her know in no uncertain terms that she's not "living in Kansas anymore". Give her a warning. Because she is your only female employee, I would suggest that you not fire her outright. Instead, sit her down in your office, explain that you are unhappy with her performance, and give her a limited period of time (I would suggest 30 days) to turn things around. Make it very clear that if she continues to badmouth the business to customers and suppliers, you will "have no choice but to" terminate her immediately. Prepare a "memo to the file" detailing what you told her. Focus on specific behavior goals. DO NOT focus on her status as a female, or the fact she is taking medication. DO NOT allow the employee to drag you into such a discussion. Instead, give the employee a list of behaviors you find unacceptable, and tell her exactly what she needs to do to get back into your good graces. Have a witness present. Do not meet with this employee alone. Because she is the only female in your office, she may claim that you made unwanted advances or attempted to harass her sexually. Have a witness present at every meeting with this employee - I would recommend that person be a woman, such as your wife or a female relative, that will make your employee feel more comfortable that you are not singling her out because of her sex. Oh, and if you're engaging in an extramarital affair, make sure the witness is not the "other woman", as you are then opening yourself up for blackmail (please don't laugh; I could tell you stories . . . ) Fire early in the week, never on Friday. Assuming the employee does not turn things around for the better (given what you're saying in your e-mail, it's highly unlikely), fire her early in the work week. Never fire someone on a Friday, because then they can "stew about it" over the weekend, and come into work the following Monday ready for a fight, or even worse. More next week . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconPutting "Cool, Compelling Content" In Your Newsletter [Part 2] Cliff Ennico www.creators.com You can't sell anything to anybody unless you first get their attention with the "three C's" -- "cool, compelling content". If your marketing literature, newsletter or Website lacks the "three C's", you might as well be sending out spam e-mail for all the good it will do. Let's take the three C's in reverse order. "Content" - it isn't enough anymore to say "here's what I've got to sell; it's really great!" Your newsletter or Website must have something on it that will inform people or explain something, like the "Cleaning News" article about dust mites in last week's column. Right now you are standing on dust mites: there may even be some in your hair or clothing. Bet you didn't know that, huh? What is more, your "content" must be freely available, especially if you are selling on the Web, because people expect information on the Internet to be free. If you go to my Website at cliffennico.com, you will see links on my home page to a number of articles I've written over the years answering the "most frequently asked questions my small business clients ask". Not sure what type of legal entity to set up for your small business? You can download, absolutely free, my five page "Demystifying the Business Organization" outline: sit down with this thing tonight over a cup of strong coffee (okay, maybe a VSOP brandy) and you will come away knowing as much about LLCs and corporations as most attorneys do. People in America these days are highly educated (or think they are), they do NOT want to be condescended to, and they are extremely afraid of being "taken" because they didn't know enough when they entered the marketplace. They appreciate it when you take the time - without charge or obligation -- to give them the information they need to make an intelligent choice. Putting free information on your Website or newsletter is a great way to tell them "hey, you can trust me - I know how confusing this stuff is, and I care very much that you make the right decision about buying X." "Compelling" - in today's fast paced marketing environment, you only have a couple of seconds to grab your customer by the throat and get his attention. Look at the Website of most attorneys, and what will you see? A photo, a biography, and maybe a list of articles the attorney has written for prestigious law journals (the latter obviously to impress you with the size of the lawyer's brain). Forgive me, but isn't this information pretty useless when you're thinking about hiring an attorney? Do you really care what your attorney looks like, as long as she is competent and can get the job done for you? The four things you want to know when you hire an attorney are: is the attorney experienced? has she ever done before the work I need done? can I communicate with this person? how much will it cost me? If I don't find the answers (or at least some clues) on your Website, I'm looking for another attorney! Especially if you are selling services, you have to know what your customers are looking for, and make sure they see it (and nothing else) on your Website. Finally, your sales spiel has to be "cool". People don't want to be lectured anymore - they had enough of that in school. They want to be entertained, amused, stimulated, even aroused by your advertising. The best marketing you can get on the Web is to have people e-mailing each other saying "hey, check out this guy's Website! This guy's a lawyer, but he's really down to earth and even has a sense of humor!" Tell me you're not going to look at my Website after reading that . . . Think back to your childhood, and try to remember some of the ads you saw on TV. I guarantee all the ones that will come to mind were fun, entertaining or inspirational in some way. My entire philosophy of life comes from an early 1970s commercial for Schlitz beer: "You only go around once in life, so you gotta grab all the Gusto you can!" (Remember that one, my Baby Boomer brethren? You probably haven't thought about Schlitz beer in decades, but you haven't forgotten the slogan, have you?) Giving your market the three C's - "cool, compelling content" - won't guarantee that your business will succeed. It will, however, dramatically improve your odds of getting your market's attention, and that can only be a good thing. Because if you can't keep 'em awake, you can't sell 'em anything. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconPutting "Cool, Compelling Content In Your Newsletter [Part 1] Cliff Ennico www.creators.com "I am planning to launch an e-mail newsletter in an effort to promote a local service business. But I'm not exactly sure what should go in it. I don't want the newsletter to sound too 'salesy', yet at the same time I want people to know about the excellent service I provide. Do you have tips for people in this situation?" It's a lot harder than it ever used to be to "broadcast" your marketing message to folks. Thanks to the Internet, we are living in a "pull" world when it comes to advertising. You can't "push" your message into people's faces anymore, because there are too many ways for people to block the message out. Instead, your customers have to find you, and seek out your message. As a syndicated columnist, I get more than 50 e-mail newsletters every day. Some of these I actually signed up for, but most of them are from well-meaning friends, publicists and nonprofit organizations who have put me on their list along with just about every business journalist in these United States. I use the "preview" pane in Microsoft Outlook, so when an e-mail arrives from an unknown source I can scan it quickly and figure out if it's worth opening. It takes me about 2 to 3 minutes to scroll through my morning e-mail, hitting the "delete key" merrily as I go. If you are trying to reach me with your marketing message, you've got exactly 2 seconds and about five or six words to catch my attention before I move on. You're not about to do that unless your newsletter contains some "cool, compelling content" that reaches out, grabs me by the throat and doesn't let go - what I call the "three C's" of Internet marketing. A number of years ago, a middle school English teacher in our town started a part-time business cleaning people's windows and carpets. He realized that most of his business would come from repeat customers. So whenever he cleaned someone's carpets or windows, that homeowner was added to a subscription list to his quarterly newsletter, which he called: THE CLEANING NEWS!!! "The Cleaning News!!!" (the three exclamation points were part of the title) was a single-page newsletter printed on both sides. The headline was done in 14 point Gothic script on a professional looking masthead - just like the New York Times - and was accompanied by his slogan, "All The Dirt You Need To Keep Your Home Clean!". You would open the envelope, and jumping out at you would be his lead story, something like "IT'S DUST MITE SEASON ONCE AGAIN!!!", accompanied by a quarter-page photo of a dust mite blown up 5,000 times. Ever see a dust mite up close and personal? Trust me, it is one UGLY bug . . . The story would begin, "these hideous creatures are living in the carpet you are walking on - RIGHT NOW - in your bare feet!" Stephen King and Dean Koontz combined had nothing on The Cleaning News!!! The second page was a series of tongue-in-cheek household cleaning tips in "question and answer" format, along the following lines: "Q:Is it all right to use a toothbrush to clean the tile grout in your shower stall? A:Yes, this is perfectly acceptable, but remember not to use it as a toothbrush afterwards." Silly? Ridiculous? Unprofessional? Let me ask you two questions: do you like the author of "The Cleaning News!!!"? would you hire him to clean your carpet? Enough said. "The Cleaning News!!!" was not junk mail. It was LITERATURE. People looked forward to each issue. People saved copies of "The Cleaning News!!!" and showed them to their friends at work. People called this guy and ASKED to be put on the mailing list for what was essentially an advertising flyer! You can't sell anything to anybody anymore unless you first get their attention with "cool, compelling content". More next week . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconTaking Customers With You When You Change Jobs Cliff Ennico www.creators.com "For the past several years I have been employed by a local accounting firm. During this time I have developed close relationships with several of the firm's clients. A number of these clients have been dealing exclusively with me as opposed to the firm's partners, and I view them (rightly or wrongly) as 'my' clients. I am leaving the firm shortly to set up my own practice in the same town, and would like to notify these clients of my change in status, but I'm afraid the firm will sue me for 'stealing business'. I've never signed any sort of non-compete agreement with the firm. What are my legal risks here?" First of all, no business "owns" its clients or customers. People are free to use whatever service providers they like, and agreements that prevent them from doing so are often viewed as illegal "restraints of trade" and are struck down by the courts. Second of all, this situation is every employer's worst nightmare. You spend years training someone in the hopes they will help you grow your business, and the next thing you know they've quit and taken half your customers with them. Shame on this accounting firm for not requiring all of its employees to sign a "non-solicitation" agreement, in which the employee promises not to contact any of the firm's customers or clients for a period of XXX months after leaving the firm's employment for any reason. Unlike non-compete agreements (which prohibit ex-employees from working in the same field or profession within a certain geographic area), non-solicitation agreements are viewed as a legitimate effort by a business to protect its goodwill, and are often upheld by the same courts that routinely strike down "non-competes". Still, even though your firm did not make you sign a non-solicitation agreement, you may have some legal liability to your former employer if you blatantly try to steal its customers. To date, 42 states have adopted some form of a statute called the "Uniform Trade Secrets Act". If your state has adopted a version of the Uniform Trade Secrets Act, you are prohibited from stealing your employer's "trade secrets" and using them for your own benefit, even without a written agreement with the employer. In most states, a firm's client list would be considered a "trade secret" unless its content can be "readily obtained through some independent source". So if you download the firm's entire client list onto a computer diskette or CD and send a letter to everyone named on that list announcing the opening of your new firm, your old firm will almost certainly view that as a theft of its "trade secrets" and will sue you for that. However, taking out an advertisement in a local newspaper (or a local Chamber of Commerce publication) saying that "Joe Blow, formerly with XYZ Accounting Firm, has now opened his new office at ____________" probably will not be viewed as "trade secret" theft, as you are making a general solicitation to the entire community that is not targeting your old firm's clients (even though virtually all of them read the same local newspapers and trade publications). What about directly contacting clients with whom you had a personal relationship during your tenure at the accounting firm? While there can be no guarantee your firm will tolerate any solicitation of business, consider: limiting the solicitation to those clients for whom you are the "sole and exclusive" firm contact - if you do most of the client's work but the client plays golf with your boss every week, you are not the "sole and exclusive" firm contact and should avoid soliciting that client; waiting until after you leave the firm before sending any e-mail or written correspondence to that client with your new contact information; and not offering the client any discounts or "deals" you wouldn't give to someone who walks in off the street. Under no circumstances should you remove any client files, documents or other client-specific information from the firm when you leave, even if a client says it will follow you. Your solicitation to the client should include a "form letter" for the client to send to your old firm terminating the client relationship and requesting that all files be transferred to your attention. If the client owes any money to your old firm, be prepared to wait until that gets settled before you get the files. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconCan An LLC Member Put Himself On The Payroll? (Part I) Cliff Ennico www.creators.com "My brother and I have a limited liability company (LLC) for our garage business. My brother really is the 'workhorse' in this business - I put in the startup money, and I sometimes do the books - and it's a pain in the neck for him to have to figure out his estimated taxes four times a year. Isn't there a way we can put him on a payroll, pay him a regular salary, and withhold taxes just like we would for an employee who didn't own a piece of the business? You won't believe this, but I've spoken to three different accountants and I've gotten three different answers. Help!" I'm not surprised at all. This is one of the toughest tax questions involving LLCs, and I have devoted at least three prior columns to this subject. Let's begin with the basics. Your LLC is treated as a partnership for tax purposes unless you choose to be taxed another way. If an employee is not a partner (owner) of the business, you can put her on a payroll, withhold income, Social Security (FICA) and Medicare taxes, and deduct her salary the same as if you were a corporation. If the employee is also an owner of the LLC (called a "member"), however, the rules start to get complicated. Legally, a member of an LLC cannot receive a "salary" as such from the LLC. There are only two ways a member can get cash out of the LLC: she can either take a "draw", or take a "distribution" of the LLC's profits. A "distribution" to an LLC member is like the dividend a corporation pays to a shareholder - it is a partial return of the monies the member has invested in the LLC, and is based on the member's percentage of the LLC's net income or profit. So, for example, if you and I are 50/50 members of an LLC, and I take out 50% of whatever's left over in the LLC checking account at the end of a particular month (with your approval, of course, so there's enough money in the account to pay future expenses), that is considered a "distribution". A "distribution" does not reduce the LLC's income for tax purposes (it is precisely the LLC's income that is being distributed), and the member taking the distribution must pay all income and self-employment tax on the distribution. A "draw" is an amount paid to a member for services rendered to the LLC, or to reimburse the member for LLC expenses the member has paid out of her own pocket (for example, many members use their personal credit cards to pay LLC expenses in order to obtain "frequent flier" miles the LLC wouldn't qualify for). A "draw" reduces the LLC's income for tax purposes, and the member taking the draw must pay all income and self-employment tax on the "draws". If a member "draws" more than $1,000 during a calendar year, she must estimate the taxes due on the "draws" and pay the estimated taxes four times a year. If a member is allowed to "draw" specific amounts on a regular schedule (like a salary), the "draws" are referred to as "guaranteed payments" for tax purposes. According to Fairfield, Connecticut CPA Russell Abrahms ( rlabrahms@aol.com ), an LLC can deduct guaranteed payments, which are treated as ordinary income to the member who receives them. While admitting that it is a "pain in the neck" for members to have to estimate and pay taxes on their guaranteed payments quarterly, Abrahms says "the brother may actually end up paying less taxes that way than if he were to take a payroll deduction". He explains that "in some states - such as Connecticut - employers who withhold taxes from their employees' wages have to make payments into the state unemployment compensation or disability fund, which members taking a 'guaranteed payment' type draw don't have to do." Abrahms also points out that in this case, the nonworking LLC member may have to pay self-employment taxes (FICA and Medicare) on the draws he takes out of the LLC account. Because he "sometimes does the books", he's not just a passive investor in the LLC. "This is a very hot issue in the tax community right now," says Abrahms, "and we need to delve into the business details before we can determine whether a member's 'draws' or distributions will be subject to self-employment tax." So does anything bad happen if you put an LLC owner on the payroll and withhold taxes from her "guaranteed payments"? See next week's column . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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