Worried About Lawsuits? Here’s what you need to protect your assets …
October 22, 2008 by Elizabeth Potts Weinstein · Leave a Comment
With all the crazy economic, political, and potential recession in the news, the risks of being a business owner are more obvious. Not only do we have potential cash flow and liability issues, but we must protect ourselves from the damages of a lawsuit, in case a relationship goes bad or we have a stretch of bad luck.
You likely need to different types of policies to protect you, your business, and your assets from lawsuits. Many business owners only get one of the two — so be careful to get both if they apply to your situation.
Business Insurance
Business liability insurance pays for attorneys fees to defend you in a lawsuit (”duty to defend”) and damages due to harm caused by the business, such as a slip-and-fall, breach of contract, or an advertising dispute. Most policies for small business owners will also include business automobile use coverage (your personal policy may not cover when you use your car for business), employees stealing from you, worker’s compensation, and property loss (computer being stolen, or office fire).
Professional Liability or Errors & Omission Insurance
Even if you are incorporated, you may still be personally liable for your professional advice. If the advice you give as a consultant or expert is allegedly negligent, you may be found personally liable for the damages resulting from your bad advice. Also, as an officer of a corporation, you may be liable for the acts of the business of which you were a part, if you knew or should have known of the act. Professional liability, or errors & omissions insurance, covers attorneys fees and damages due to your allegedly negligent acts.
Your Trademarks and Copyrights: 6 Cheap and Easy Ways to Protect Your Stuff
October 17, 2008 by Elizabeth Potts Weinstein · Leave a Comment
Your business has value and makes money primarily due to its intellectual property, including your trademarks and copyrights. I don’t care if you cut hair, write copy, manage money, clean houses, create websites, sell insurance, sell t-shirts, coach executives, or manufacture computers; what you actually are marketing and selling are ideas.
To be able to charge more money than your competitors and to build value in your business, you must protect your those ideas using the various methods of protecting intellectual property, including filing formal trademark applications and registering your copyrights.
But, that can all get pretty expensive and time consuming. So here are 6 ways you can protect your valuable property without breaking the bank.
Choose Valuable Names.
When you are choosing the name of your business, products, or service, you want to choose names that are distinctive to the public, easy to protect, and have inherent value. The more unique and less descriptive the name, the more distinctive and easy it will be to protect. For example, Amazon.com is a random word to use to describe a bookstore, and is memorable simply because it is so random. When you are choosing a name, brainstorm some names and check their availability by performing Google searches, checking the “who is” database of domain names, and the trademark registry at uspto.gov. You want something that is not already in use, would be easy to remember and spell, and is distinctive in the mind of the consumer.
Protect Your Big Ideas, Not Every Name
The first name of my financial planning business was Potts Weinstein Financial Consulting. I didn’t even bother filing a trademark application for that name, since it was descriptive of my business (my name and what I do), and not very valuable.
My new financial planning business name, The Wealth Spa™ is easy to remember and spell, distinctive, and much more valuable. As such, I protect that name by using the ™ symbol, police it using Google Alerts, and have filed an application to obtain a trademark registration.
Register Domain Names.
It costs $10/year or less to register a domain name. If you have a short list of business, product, and service names, go ahead and register the .com names for all of them. For your main business name, and any valuable Big Idea names, register misspellings and other top level domains (.net, .org, .biz). If you are out of the U.S., or plan to do much of your business in other countries, register both the top level domain for that country (such as .uk) and the .com domain. Also, register your full name (elizabethpottsweinstein.com), if it is available.
Label Your Copyrights.
For the words or symbols you are using in conjunction with your product or service, label them with a ™ symbol to let the world know you are claiming common law (state law) trademark protection. For your creative works (writings, recordings, video), label them with the copyright symbol, the date, and your name — © 2007 Elizabeth Potts Weinstein. On confidential documents (like your client list or internal process descriptions), label them with Confidential, Not for Distribution, or a similar warning. Just these simple acts will let the world know you are planning to police your property, and will keep casual and uninformed people away (similar to locking your car doors).
In some countries, copyright and trademark rights only apply to the first person who officially registers. If you are located outside the U.S., you must review the rules for your country to learn if you need to register ASAP so you don’t loose your rights.
Keep Trade Secrets, Secret.
You may have valuable information that is valuable simply because you keep it confidential, like your client list, your marketing system, or your internal process for creating your products or services. Take simple measures to keep these items secret, by using locked file cabinets, firewalls on your computer, only using secure wireless internet, and not leaving documents on your desk for the cleaning people to read.
Police Your Intellectual Property Assets.
Set up Google Alerts (http://www.google.com/alerts) for any words or phrases that are part of your Big Ideas. Google Alerts will automatically perform a web search for those words each day and will notify you when someone uses the words on the web. This includes the name of your business, products, and services, your tag line, the titles of your articles, E-books, and programs, and distinctive phrases you use in your teachings. Whenever someone uses your words on the internet (and the site is indexed by Google), you will know.
Don’t Make Your Trademark Word a Verb.
Don’t use your trademark as a verb or to describe the class of product or service. For example, instead of Xerox-ing a document, say “make a Xerox copy.” You don’t want your trademark to become a generic term for performing that task, or for that class of products. For example, the trademark over the word aspirin in the United States died because the company who owned it (Bayer, then Sterling Drug) used it as a replacement word for acetylsalicylic acid. Tylenol however is careful to use the trademark Tylenol to be their brand, and not another word for acetaminophen (n-acetyl-p-aminophenol). They sell Tylenol brand acetaminophen. The companies who owned Pilates and Montessori both lost their trademarks under similar circumstances. Other examples of brands that came dangerously close to becoming generic and losing trademark protection include Kleenex and Band-Aid. That’s why the kids in Band-Aid commercials now sing “I am stuck on Band-Aid brand” instead of “I’m stuck on Band-Aids.”
The Wealth Spa Minute: Set some Google Alerts on your name, your business name, the names of your products or services, and the names of your most valuable articles, posts, or e-books.
Photo courtesy Ioan Samell via Flickr.
Exit Plan: ‘Cause I guarantee you won’t live forever …
September 29, 2008 by Elizabeth Potts Weinstein · Leave a Comment
Why Do You Need an Exit Plan?
A few of you may be running this business to sell or go public, and if so, you have already (hopefully) created your exit plan. But the rest of you may not have created an exit plan because you don’t yet want to retire or your retirement seems too far away for a specific plan.
As a business owner, you love what you do. You quit your job to open this venture, and plan to run it indefinitely. Perhaps you want to work a few less hours, but you don’t see a deadline for quitting. Perhaps this is even your retirement business, where you retired to from your high-stress job to open your new venture in mid-life.
Regardless, you must have a plan for possible exits because I can guarantee you will not run this business forever. You may change your mind. You may want a sabbatical or to go on a book tour. You may need to take a leave of absence to take care of a sick family member. You may become physically unable to work. And, I predict that you will not live until the end of time. For all of these scenarios, you need a plan to give you the financial freedom to make the choices you need for your life. Read more
Estate Planning: What Every Business Owner Must Have (even if you’re single or broke)
September 15, 2008 by Elizabeth Potts Weinstein · 2 Comments
Every business owner needs some basic estate planning documents, even if one who is single with nodependents, or whose business is not “worth anything” yet. Think of your business, clients, and customers as dependents of a sort that need to be considered in case you were no longer around. If you have a spouse, life partner, or children, you definitely need to consider estate planning documents to provide for what would happen if you were incapacitated (i.e., coma, vegetable — fun subject, huh?) or if you passed away.
Here are the documents you may need to obtain: Read more
Internet Fraud: 11 Tips to Avoid a Scam
September 5, 2008 by Elizabeth Potts Weinstein · 2 Comments
You probably know not to click on the spam advertising for “adult” products, but are you successfully taking reasonable precautions to avoid someone stealing your information? Here are 11 simple tips you can start using to avoid someone scamming you.
- Use multiple email addresses. Keep an email address that you just use to input at sites you don’t know, and where you don’t want what they have to send you. An address at hotmail or yahoo works well. Set that email address to “exclusive,” so all emails from someone not in your address book goes into your spam folder. Read more
CAN-SPAM: How to Comply with Anti-Spam Rules for Mass Email
September 4, 2008 by Elizabeth Potts Weinstein · Leave a Comment
If you send emails to or from the United States, then you may need to comply with the anti-spam requirements of the CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act). This article contains the basics of what a small business owner or internet marketer needs to know to get started with their email compliance (for recent developments in the FTC regulations, check out the 9/4/08 issue of The Wealth Spa Insider eZine). If you are sending “commercial” email to more than one person at a time, you must comply with these rules. What does “commercial” email mean? Read more
Use the Appropriate Tax Status for Your Business Phase and Entity.
May 29, 2008 by Elizabeth Potts Weinstein · Leave a Comment
The words “entity” or “status” of your business may be used in two ways: (1) to describe the legal entity of your business (sole proprietor, partnership, LLC, S-Corporation, C-Corporation) or, (2) to describe status of your business for tax purposes (pass-through or corporation). In the following post we will be discussing which legal entity is appropriate for your business for asset protection purposes; here, we are evaluating what status you should be using for tax purposes.
Generally, either a business is a pass-through tax entity or it is taxed as a corporation. If a business is pass-through, the profits or losses are passed-through to the tax return of the owners. The owner owes taxes for any profits, even if those profits are not actually taken home by the owner.
If the business is taxed as a corporation, the corporation files its own tax return and pays taxes on its profits. Money may be paid to owners as salaries for work performed and the owner will pay taxes on his/her salary, just like any employee. Other money may be paid to owners as dividends on their stock and the owner will pay taxes on dividends, just like any dividends received on stock. Read more
Dealing with exclusive contracts … antitrust issues?
March 12, 2008 by Elizabeth Potts Weinstein · Leave a Comment
Today I’m answering a question about how we should handle competitors who have exclusive deals with other vendors.
Don’t want to work forever?
February 21, 2008 by Elizabeth Potts Weinstein · Leave a Comment
Even if you love your business and have no plans to sell, I can guarantee you will not be able to run your business forever. You may not be ready to create a formal exit plan, but here are a few steps you can take today to create value in your business, in preparation for the future. Read more
Are You Honoring Your Entity?
January 27, 2008 by Elizabeth Potts Weinstein · 1 Comment
What is the legal entity of your business?
If you respond "I don’t have one" that means you are either a sole proprietor or a partnership (if there are two or more of you). You may need to form a new legal entity this year — but that is a topic for another blog post.
If you have business that is a separate legal entity from yourself — a corporation, Limited Liability Company (LLC), or another such entity — you need to be honoring that "separate-ness." Small business owners, especially one-person shops, commonly are being too casual about business practices, ignoring the "red-tape" of administering a corporation or LLC.
Why does it matter, especially if you are a one-person shop? Read more
