Ira

A: If I think about it, there are definitely some strategies I have learned along the way – legal and otherwise – that are inexpensive while also making your business life easier. Some are well known, others are not, but all can make a difference.

And of course, being the lawyer I am, let me note that nothing beats meeting with your own attorney who is aware of your facts and situation. But this list should give you something to talk about.

1. Get creditors to leave you alone, quickly and inexpensively: Especially these days, plenty of folks are being called incessantly by bill collectors. If you want the phone to stop ringing, one thing you can do is invoke the Fair Debt Collections Practices Act. Say something like, “Pursuant to the FDCPA, you are to never call me again about this debt.” (Note: This has to be made to 3^rd party bill collector and not the original creditor.)

Once they have been given notice (doing it by certified mail is even better) they have to stop calling. They may sue you, or not, but the threats will cease.

2. Often, you can do it yourself: There are plenty of times when you don’t really need a lawyer and can do it yourself far less expensively. I am partial to the do-it-yourself law products at Nolo.com, but there are other good sites out there as well, like LegalZoom.com.

Of course, it’s the basic stuff I am talking about here – forming an LLC, creating a will, etc.

3. And when you can’t do it yourself, you may only need a letter: When someone owes your business money it is understandable that you want to sue the bum. But lawsuits are messy and expensive. Many times, a strongly-worded letter from a lawyer can yield even better results than costly, complex litigation, and at a fraction of the price.

4. And if you need more than a letter, negotiate: A little secret lawyers don’t want you to know is that their fees and costs are not written in stone. You can often negotiate better prices. No, they may not reduce their hourly rate, but you can bet that paying 50 cents per copy, or $2 a page for a fax is negotiable.

5. Protect your intellectual property: If you are a creator or inventor, it is vital that you protect your IP – your copyrights, patents, or trademarks. Patents usually require legal help, but copyrights and trademarks can be registered and handled on your own at www.USPTO.gov.

Also, one good thing to know about copyrights is that they need not even be registered with the federal copyright office to be legal; they are created as a matter of law at the moment of creation. See, this sentence is now copyrighted (though registration does offer a lot of extra protection.)

6. What to do if you don’t have a contract: This was one of the more interesting things I learned in law school – sometimes you can enforce someone’s promise to you, even though you don’t have an actual contract, and you don’t even need to hire a lawyer.

It’s called promissory estoppel and happens when you rely to your detriment on someone’s promise.

Example: A contractor asks you, a subcontractor, for a bid for a project and you give a very low bid. The contractor then gets the project but you now say you can’t perform with the low bid you gave. Even though there is no contract, you may be forced to live up to the low bid price because the contractor relied on your promise.

7. Know when to throw it in: When you’re wrong, you’re wrong, and fighting will cost you money.

Today’s Tip: Put it in writing. I know you know this, but make sure you do it, always. Memories fade over time, people remember things differently, and people lie.  Writing prevents all of that from being dispositive.

Register for free with the code “gbb366″

Registration Page

Deanna

A: I know of very few small business people who would trade their lot for a gig with a big business, even given the steady paycheck and benefits that would come with it. The lack of freedom alone would likely emotionally pummel most small business owners (and in fact, probably did – that is why they left.)

But it’s not called “big business” for nothing: Large corporations have bigger budgets, better resources, more people – a whole host of bigger and better advantages small business can only dream of.

But, to quote the wizard in The Wizard of Oz, “You’ve got one thing they haven’t got,” namely, the ability to adjust quickly and move fast.  You are the speedboat to their tanker.  And in an economy like this that is no small thing. The best small businesses shift course, quickly.

Here’s an example: Polly Liu is the founder of Beau-Coup.com, a website that started out offering an amazing array of wedding favors.  Ms. Liu and her husband started the business because, while looking for unique wedding favors for guests at their wedding, “we seemed to come across the same set of products from vendor to vendor.”  They knew they could do better.

Beau-Coup.com was born not long thereafter and while the site is great and the business quickly became successful, the question arose: How to grow, and more importantly, in what area? This is where being a nimble small business really comes in handy.  Beau Coup used Google Analytics and Google AdWords to research and test out new possibilities. They concluded that the next natural extension for them was, maybe not surprisingly, the baby market. Beau Coup soon began to sell favors, accessories, and party supplies for lots of non-wedding events like baby showers, bar mitzvahs, birthday parties, and so on.

The two Google tools Beau Coup used are indeed a great way to test new ideas inexpensively and quickly, but they are not the only way. There are in fact plenty of online tools available that can help you too do some market research and make some smart decisions about what’s working, what’s not, and which way to head next:

• Google Analytics, as indicated, is a free tool that analyzes how visitors interact with a site – from how they found it (referrals) to what they do when they get there (navigation). Savvy marketers can use this info to make smart decisions. For example, by testing new products and seeing which visitors click on most often, you can determine which are most popular. You can then emphasize them in ads, move them to more prominent pages on the site, expand inventory with similar items, etc.

• Microsoft AdCenter allows you to place ads throughout the Microsoft world – on MSN, Bing, etc. and because such ad campaigns are easy to change, they are a good way to effectively and quickly test something new and hunt for new customers. Example, a sporting goods retailer who wants to try his hand at selling archery equipment can create ad campaigns related to bows and arrows, targets, etc. and see what ads and which key phrases work best.

• AT&T (whom I do some work with) allows you to place ads using the online Yellow Pages, on mobile devises, in search engine results, and more. They also have some great local search options.

• Google AdWords, as you likely know, allows you to place ads on Google and throughout the Google world.

• Of course the other big player is Yahoo.

All of these tools allow you to try something new, inexpensively, and see if it works. If this idea of shifting into new markets is of interest to you, here are a few tips to keep in mind:

1. Consider line extensions: A line extension is, as the name suggests, simply a logical expansion of the line of products you already carry. But remember to think broadly – Beau Coup did not just consider wedding products, they thought about celebrations generally.

2. Consider new customers: Who else may be interested in what you offer? How can you reach them? What might they want?

3. Start small, tweak, expand: The beauty of these tools is that you can look before you leap. Test, see what works, don’t spend a lot, test some more, analyze results, and then go for it.

4. Keep your brand in mind: Going in a wholly new direction could hurt your brand. Be careful of that.

Today’s tip: Know a great woman entrepreneur? Ernst & Young is looking for her. The company is now hosting its second annual Entrepreneurial Winning Women contest. Winners

• Receive ongoing personalized business advice from Ernst & Young professionals as well as entrepreneurs, executives and advisors;
• Will get to meet role models, coaches and mentors;
• Will connect with possible investors, partners, customers, and suppliers; and
• Can participate in formal and informal educational sessions

Apply here.

Some companies are closing their doors, some consumers are filing for bankruptcy protection, and many small businesses that sell on credit are concerned about receiving payment—for good reason.

Understanding bankruptcy
If a company or person files for bankruptcy protection, most unsecured creditors stand at the back of the line; they’re lucky to receive pennies on the dollar. Some creditors may gain special status in a bankruptcy proceeding and will ultimately recover more than other unsecured creditors. For example, if you can qualify as a “critical vendor” who continues to supply goods to a company that has filed for a reorganization under bankruptcy protection, you gain a better spot in line for collection. You can’t do this simply by having the company dub you a “critical vendor;” you need to have an attorney file a motion with the bankruptcy court.

Returning payments. A bankruptcy court may send vendors of a company that has filed for bankruptcy a letter asking that the company return payments received within 90 days of the bankruptcy filing. This is referred to as a “preference” and a “claw back.” The trustee in bankruptcy has the right to undo certain transactions or payments and then use this money to make equitable payments to all creditors, not just you. If you don’t respond to the trustee’s demand letter, you can be sued and you could lose if the trustee can show that the company was insolvent at the time it made the payment to you (there are certain defenses to be raised in this situation that can save you).

Filing claims for unpaid invoices. If a customer has not yet paid you for goods or services you’ve delivered, you can file a claim with the bankruptcy court. Whether and how much you collect remains to be seen.

Continue Reading

Let’s travel back a few years, 9 to be exact, and meet a couple of college buddies who were working to earn a masters degree at California State University Chico, here in northern California. Christian (Chris) Friedland and David Bocter started a small E-commerce business selling plumbing supplies, faucets to be exact. This venture met the guidelines for a class project and they both hoped it might bring in a small income to subsidize college expenses.

As a partnership, Chris brought experience from a local plumbing supplier, while Dave provided early funding. Faucetsdirect.com was born and quickly became a success; in fact today the company employs over 200 people here in Northern California under the parent company Improvementdirect.com. The operation now boasts 12 separate websites offering the latest in home improvement products.

Back then and still today; this company uses the Dropship model for product fulfillment. Improvement Direct has fostered relationships with some of the largest manufacturers and distributors of home improvement products in the Country.

Continue to the six tips for using a dropshipper

So rather than the normal pithy infotainment I try and offer, and in the spirit of summer, for today, please enjoy The Small Biz Quiz.  Answers at bottom.

1. Who said, “There’s no business like show business, but there are several businesses like accounting”?

A: Woody Allen
B. David Letterman
C. Groucho Marx
D. Ethel Merman

2. Which one of these businesses started out as a home-based business?

A. Xerox
B. Disney
C. L.L. Bean
D. Amazon.com
E. None of the above
F. All of the above

3. True of false: According to Alexa.com, Twitter gets more traffic than Facebook

A. True
B. False

4. After the disastrous introduction and failure of “New Coke” in 1985, what happened to the executives that spearheaded the new product?

A. They were all fired
B. Nothing
C. They left to start their own soft drink company
D. They were given raises

5. What was the first computer to use a two button mouse and a graphic interface?

A. The Xerox Star
B. The Commodore 64
C. The Apple I
D. The Apple Lisa

6. What year was the Small Business Administration founded?

A. 1933
B. 1953
C. 1961
D. 1978

7. What is this?

A. The first logo for McDonald’s
B. The first logo for Aunt Jemima
C. The first logo White Castle
D. The first logo for Bisquick

8. What is “factoring”?

A. Computing your past-due invoices
B. Selling your accounts receivables for a discount
C. Analyzing your best performing products
D. Taking a loss on a bad debt

9. Which one of these business people filed for bankruptcy?

A. P.T. Barnum
B. Henry Ford
C. Abraham Lincoln
D. Stan Lee (Marvel Comics)
E. All of the above
F. A and B

10. True or false: Indiana was the home of the auto industry before Michigan

A. True
B. False

11. What is the stock symbol for the Anheuser-Busch company?

A. AB
B. ANHB
C. BEER
D. BUD

12. Where did the term “brand name” come from?

A. Branding ranch names on cows
B. Branding owners’ names on horses
C. IBM Think Labs
D. Branding company names on whisky barrels

13. How much did it cost for the first three minutes of a call between London and New York when the phone was first introduced in 1927?

A. $75
B. $25
C. $5
D. None of the above

14. How old was Warren Buffet when he first started investing in the stock market?

A. 11
B. 21
C. 25
D. 31

15. What is it called when a salesman asks, “Would you prefer to purchase two or three today”?

A. The master close
B. The clear choice close
C. The alternate choice close
D. The kicker

16. Prior to becoming an author, blogger and speaker, what did Seth Godin do?

A. He worked in a circus
B. He commuted from California to Boston in order to work and go to school at the same time
C. He played minor league baseball
D. He worked for Entrepreneur Magazine

17. In a business lawsuit, “res ipsa loquitur” means

A. The defendant is being ridiculous
B. The case is worthless
C. The product is faulty
D. The thing speaks for itself

18. Who said, “We don’t have a monopoly. We have market share. There’s a difference.”

A. Jeff Bezos
B. Steve Ballmer
C. Sergey Brin
D. Rich Uncle Pennybags

19: In the movie Risky Business, what is the name of the club Joel (Tom Cruise) is a member of?

A. Early Entrepreneurs
B. Young Entrepreneurs
C. The Small Business Society
D. Business Today!

20. What is the best small business book you can get?

A. The Small Business Bible

Answers: 1: B, 2: F, 3: B, 4: D, 5: A, 6: B, 7: A, 8: B, 9: E, 10: A, 11: D, 12: D, 13: A, 14: A, 15: C, 16: B, 17: D, 18: B, 19: B, 20: A of course!

Today’s Tip: Inc. Magazine (a great resource for small business, by the way), just launched the 2009 version of its annual Inc. 500 and Inc. 5000. There are some surprising results this year. Despite the recession
• Aggregate revenue for the 500 came in at $18.4 billion, up from $13.7 billion last year
• Total employment is more than 57,000, up almost 6,000 from last year, and
• 96% of companies on the 500 list have hired in the past year

The issue is on newsstands now.

Conveniently, the ten yes or no question evaluation leads you to eleven steps:

Step 1: Reality Check – Candidly answer the assessment questions above and take appropriate action to address issues receiving a “no” response.

Step 2: Get Lean and Mean…

Step 3: Maximize Cash Flow…

If after the reality check you find yourself at a loss for ways to start tackling each step, the SBA also includes thirteen separate performance resources.  Most are aimed at their loan programs and business plan writing but there is a marketing guide, a website construction primer and information on government contracts in the Free Online Courses section.

Steve

A: Recently, I was chatting with my friend Rieva Lesonsky about what a challenge it is to own and run a small business in this economy. The topic was especially salient because , as we are both small business owners as well as writers and speakers on the subject, the Great Recession is effecting us in numerous ways.

You may have heard of Rieva. She is one of the top small business experts out there, but even if you have not, you have no doubt seen her work – for many years she was the editorial director of Entrepreneur Magazine and she wrote the bestselling book Start Your Own Business. When I look at her resume – being on The Today Show, Oprah, etc. – I get jealous. These days she is the CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship.

So Rieva is someone who really knows her stuff and that is why I was happy to hear that she is conducting an online chat at Bank of America’s online small business community on the subject Navigating Your Small Business Through the Great Recession. The chat will be on Friday, July 17th at 2:00 p.m. est.

Sensing an opportunity to share her insights with my readers, I asked Rieva what she is telling people these days with regard to staying afloat and even getting ahead.   (So you see, the question above . . . is mine!) She mentioned four things that she thinks can really make a difference right now:

1. Work smart: “Do not waste your time doing things you don’t have to do. Use your time wisely and concentrate your efforts on getting the biggest return on your investment of time,” Rieva counsels. “So, to the extent you can avoid it, avoid getting caught up in minutiae, especially minutiae that does nothing to help you grow your business.”
Rieva echoed the point made by Michael Gerber in his great book, The E- Myth. “Don’t spend your time working in your business,” she said, “work on your business.” As such, she thinks one of the smartest things you can do is to “use your time on things that make you money, and to the extent possible outsource or automate the other stuff.”

For example, she noted that something like doing payroll is probably not the best use of your time in times like these.

2. Remember, cash flow is king: In recessions, it becomes more and more commonplace for customers to pay later and later. “You have to try and avoid having that happen to you,” Rieva said. Yes we have to be cognizant that people are having a difficult time right now making ends meet, but it is equally important to keep “your cash flow flowing.”

So get those past-due invoices paid. Call up the tardy customers, be kind and firm, and keep the money coming in the door.

3. Surround yourself with people who can help: “So many small business owners consider themselves the ‘lone wolf.’ While admirable in many ways, that attitude can be problematic in tough economic times like these when we can all use some help,” notes Rieva.

Her solution? “Join an online community.” There are no shortage of excellent online communities that allow small business owners to meet up, share ideas, get feedback and the like. Finding and joining an online group is a free way to brainstorm, get advice, give advice, and get valuable feedback.  Right now, it does not behoove you to be a lone wolf.

4. Save money and shop for bargains. Keeping your overhead low is always excellent business advice, but is more pertinent now than ever. Says Rieva, “And there are lots of bargains to be had: Look for and use rewards, shop for great rates, use online shopping portals. The important things is to be extra smart about where you spend your money right now.”

Sage advice my friend, sage advice indeed.

Today’s tip: The Franchise Maid Brigade is offering veterans a very unique opportunity: The chance to win their own franchise. The Maid Brigade Veteran Franchise Giveaway is a contest that will give up to 100 qualified vets their own Maid Brigade franchise.

The Giveaway is open to all United States military veterans who are no longer on active or reserve duty. The criteria for entry are:

• Provide a “Certificate of Release or Discharge of Active Duty” (Form DD 214).
• Complete the Maid Brigade Veterans Franchise Questionnaire which includes an essay: “Describe in 100 words or more: What aspects of your military leadership, training, and experience would you apply to your own Maid Brigade operation?”

Good luck!

Some regional appliance and electronics retailers are flourishing despite intense competition from national chains, thanks in part to a retro retail concept: commissioned sales staff, trained to explain increasingly complex televisions and washing machines to customers.

These smaller retailers such as publicly traded hhgregg Inc. of Indianapolis and Conn’s Inc. of Beaumont, Texas, as well as closely held P.C. Richard & Son of Farmingdale, N.Y., are pursuing ambitious store expansion plans. They are aiming to capitalize on the slumping commercial real estate market and the collapse this spring of Circuit City Stores Inc., once the nation’s second-largest specialty electronics chain after Best Buy Co.

Though large retailers such as Best Buy, Wal-Mart Stores Inc. and Amazon.com Inc. are widely viewed as the biggest beneficiaries of Circuit City’s liquidation, analysts said that regional chains stand to make sizable gains. Deutsche Bank has estimated that Circuit City had $11.1 billion in annual revenue that is now up for grabs.

Customers such as Enora Tucker, 79 years old, said they prefer a knowledgeable staff. She visited a Houston Conn’s store Tuesday to make a monthly payment on her refrigerator. “I like the fact that I can go in there and talk to someone who knows what they’re talking about,” she said.

Hhgregg, which operates 111 stores mostly in the Midwest, opened 20 stores in its fiscal year ended March 31, up from the 15 to 18 it had originally forecast. It is accelerating previous plans to reach 400 stores in the next decade, said Chief Operating Officer Dennis May, who is set to take over as CEO in August

Mr. May said hhgregg’s commissioned sales staff is an advantage over national chains with young, lower-paid hourly workers that tend to stay for shorter periods. “We have sales people that have been with us 10 to 20 years, and customers who come in and ask for them by name,” Mr. May said.

Hhgregg reports fourth-quarter earnings June 2, but said based on preliminary results, it expects earnings between 39 cents and 42 cents a share, up from 32 cents a year ago, on a 13% sales increase. By contrast Best Buy reported a 23% earnings drop to $570 million for its quarter ended Feb. 28, on a 9.7% sales gain.

Best Buy and Wal-Mart dismissed the suggestion that the regional firms have a sales edge. “Our employees are exceptional at demystifying complex technology,” spokeswoman Kelly Groehler said.

“With electronics data so readily available online today, many customers come to us looking for a particular brand or item, knowledge in hand, and may not want or feel comfortable shopping with a salesperson,” said Wal-Mart spokeswoman Melissa O’Brien.

Hhgregg has successfully expanded outside its Midwest base into states such as Florida and Georgia by blitzing new markets with numerous stores, instead of tiptoeing in with one or two. “In a lot of these markets, there is room for a second consumer electronics retailer beyond Best Buy,” said William Blair & Co. analyst Jack Murphy.

Conn’s, which operates 75 stores in Texas, Louisiana and Oklahoma, has opened seven since February 2008, and has hired former Circuit City managers. The retailer said it has navigated the recession better than some rivals because it owns its financing business. It has been extending credit to customers cut off elsewhere when larger chains tightened requirements.

“When credit gets a little bit tougher, like it is now, it is an advantage,” said Timothy L. Frank, who takes over as the chain’s chief executive next month, replacing his father, Thomas J. Frank.

Conn’s said earlier this month that sales for its quarter ended April 30 rose 2.6% from the year before, to $200.1 million. Mr. Frank said the gain was aided by a 35% April increase in television unit sales.

Sales clerks who earn commissions have an incentive to understand products, he said. “Is your mother going to want to buy a washing machine from a 19-year-old with a pierced eyebrow?” asked William C. Nylin Jr., the chain’s executive vice chairman.

P.C. Richard, which began in 1909 as a hardware store in Brooklyn, doesn’t release its financial results, but President Gregg Richard said it was taking advantage of commercial real estate vacancies to expand. It has acquired six former Circuit City sites in the New York City region, bringing it to a total of 56 stores.

Write to Miguel Bustillo at miguel.bustillo@wsj.com

Printed in The Wall Street Journal, page B1

(Part 2 of 2)

Mike

A: Last week, I wrote about how critical it is today to have, not just an online presence, but a professional, robust, powerful Internet presence; how you need to embrace social networking, and  how your website is as “important today as a business card was in the last century” (Rod Kurtz, Inc. Magazine)

This week, I would like to drill down a little bit into maybe my favorite e-marketing tool – e-mail marketing. There are all sorts of ways to use email to grow your business, but for my money, the bread-and-butter, best ways are e-newsletters, and actual emails.

But don’t just take my word for it. When it comes to email marketing, there may be no more knowledgeable a source than Gail Goodman, the dynamic CEO of Constant Contact, one of the top email marketing companies in the world.

Goodman started running Constant Contact in 1999 and has since grown it into a business with more than 250,000 customers. She was named the Best Entrepreneur in the 2007 Stevie Awards for Women in Business, and her company came in at Number 16 on Entrepreneur Magazine’s Top 50 fastest-growing women-led companies.

So when I recently spoke with Goodman about why email marketing is so effective, she was, not surprisingly, a source of great ideas. To start with, she says, the essential power of email marketing is that it “facilitates repeat sales and word of mouth referrals while also keeping you visible. It is also very affordable and stretches your marketing dollar.”

Think about it. People forward emails. That is a form of word-of-mouth advertising. The same is true for e-newsletters. As such, email marketing both helps with customer retention as well as customer acquisition. And that it takes little more than some sweat equity makes it quite attractive in this economy.

Goodman says that today, e-mail becomes even more important since it allows you to forge a connection with customers, and that can make the difference between someone being a one-shot and a repeat customer.

For maximum effectiveness, Goodman advises that your email correspondence be all about them, not you. Of course you can and should use email to announce a sale or some other special, but to be truly successful, the savvy email marketer will use email to connect with their customers.

Says Goodman, “Don’t use email or e-newsletters to always ask for an order, instead, use it to help your customers. If you own a restaurant, for example, send out a recipe or a coupon.” The important thing, she notes, is that you use your email to stay in, well, if constant contact, then at least regular contact.

This leads to her other important point, namely, that not only must you get permission (”It is not like direct mail where you can just send mail to anyone”), but that in fact “permission is perishable.”

When someone opts-in for your e-newsletter or otherwise gives you their e-mail address, Goodman says that “it is, of course, not permission for daily emails, and it is also not permission to wait a year. Use that permission wisely.”

If you do that, if you create and grow a list of customers and their e-mail addresses, and then use that list to stay in touch by making your correspondence about them, and thereby forge a connection with them, then you will be well on your way to becoming a master e-marketer.

Today’s Tip: One of my favorite business shows is MSNBC’s Your Business, on Sunday mornings (and not because I am an occasional guest.) The show is full of great ideas, insights, and real world strategies. Aside from hosting the show, the multi-talented host JJ Ramberg is also small business owner herself. It is fun to watch and I always learn something new. Steve says check it out.