Small Businesses and the Law

Did you know that your small business is subject to the same regulations as a giant commercial entity? If you find this startling news, you’re not alone; most entrepreneurs in the United States assume that laws apply only to much larger corporations.

All companies – small, medium, large and mammoth – must adhere to the applicable local, regional and national laws and regulations.

Hopefully, you’ve been aware of these since the day you opened for business, but if not, we encourage you to take the time now to become compliant. You may wish to engage legal counsel to explore these areas more thoroughly and ensure you have adequately covered yourself and your company.

Let’s begin with your great idea: have you protected your intellectual property? You may wish to investigate filing for a trademark, patent or copyright. A related issue is having non-disclosure contracts in place to prohibit employees or others closely involved with your company sharing your proprietary information.

Spreading the message about your great products or services? Your clients and customers are protected by numerous advertising and marketing laws. The Federal Trade Commission is the agency mainly responsible for enforcement of these laws and regulations. At a minimum, advertising must be truthful and not deceptive, and advertisers must have evidence they can produce that reinforces any and all claims.

Other laws abound in specific industries and for certain products, so investigate all regulations pertaining to your particular industry and products or services.

In addition to the Federal Trade Commission, state and local regulatory agencies also govern advertising. Many resources and publications are easily available on the Internet to help navigate through the complex rules for advertising. The Consumer Action Handbook (http://www.usa.gov/directory/stateconsumer/index.shtml) is a great place to start.

Protection is provided for investors and others related to areas of finance through securities, bankruptcy and antitrust laws.
Privacy laws ensure your customers know how their personal information will be used, shared and protected.

Your business may also be impacted by environmental regulations or by the Uniform Commercial Code, should you transact business outside your state.
Last – but certainly not least – are the numerous federal and state labor and employment laws. It is wise to be aware of the many regulations in place that protect employees. This extensive area includes child labor, wages, employee eligibility, workplace safety and health and workers’ compensation.

We will go into more depth on labor and employment laws and some of the others mentioned above in future blogs.

In Case of Emergency, is Your Small Business Prepared?

Natural disasters may hit at any time of the year, but the recent wildfires in Colorado and derecho (line of violent thunderstorms) that cut a path across the Midwest and mid-Atlantic have made Americans aware that the atmosphere is often very unstable during the summer months.

Have you given any thought to a disaster plan of action for your small business? Having a continuity strategy in place prior to an emergency situation can go a long way toward helping your company return to normal business operations sooner.

An obvious place to begin is reviewing and possibly updating your insurance coverage. Store hard copies of important insurance and other paperwork in a safe place. A remote location is ideal, provided you are able to easily retrieve these documents after a disaster.

As you plan how your business would function day-to-day, think about how you would communicate with your employees. Are there two or three key managers who could be assigned with specific tasks prior to an approaching storm? Are employees able to work remotely during emergency situations?
If your company is a retail operation, what circumstances would dictate a change in business hours? How would altered hours be shared with your existing customers and the general public?

Is the physical location of your company in a low-lying area, subject to flooding? How do you protect your inventory and FF&E? How would travel to your location and parking at your facility be affected? It may be wise to stock up in advance on extra office and related supplies. Power outages and other utility disruptions almost always occur when a disaster hits. Often, days or even weeks may pass before electricity is restored. Would having a backup generator be worth the initial investment in order to keep your company running immediately after an emergency?

What about important electronic data? Some careful consideration should be given to the method and frequency chosen for saving pertinent data. Are back-up files stored remotely and safely?

If you have experienced physical or economic damages after a disaster, there may be relief in sight. The U.S. Small Business Administration (SBA) offers assistance to eligible companies in declared disaster areas. Any size company may provide an application for a low-interest loan to help repair or replace damaged property and items. There are also working capital loans available to help relieve economic injury caused by a declared disaster.
The loans are available at reasonable terms and can typically also cover uninsured losses.

For additional information, please contact the SBA directly at 1-800-659-2955 or disastercustomerservice@sba.gov.

And start planning your recovery strategy in advance of the next natural disaster or other emergency.

Labor and Employment Laws

In a previous post, we noted that small businesses are not exempt from following federal and state laws and regulations. Being unaware of these many laws does not mean you can ignore them. Failure to comply might result in hefty fines or civil penalties. In some instances, criminal charges could be a factor.

Some of the most numerous and complicated laws concern labor and employment. There are many regulations in place that protect employees, covering everything from child labor to safety in the workplace.

Approximately 125 million workers are protected by the 180+ laws enforced by the U.S. Department of Labor (DOL). Its web site (www.dol.gov) offers information on how to comply with these federal laws. The DOL has several agencies that administer various regulations.

The DOL’s Wage and Hour Division (WHD) administers the Fair Labor Standards Act (FLSA). The division’s mission is “to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation’s workforce.” The FLSA covers minimum wages and overtime. The Act restricts the hours children under the age of 16 may work. Garnishments of employee’s wages, the Employee Polygraph Protection Act and the Family and Medical Leave Act (FMLA) are also administered by the WHD. The FMLA applies to employers with 50 or more employees and mandates eligible employees receive up to 12 weeks of unpaid leave for births, adoptions and serious illness of employees and their immediate family members. The FMLA ensures the employee will be able to return to his previous job after the leave of absence.

The Occupational Safety and Health Administration (OSHA) manages safety and health issues in the workplace through the Occupational Safety and Health Act.

If your company offers pension or welfare benefit plans, you are responsible for following the reporting requirements of the Employee Retirement Income Security Act (ERISA). ERISA supersedes state laws and penalties for failing to file the required reports can be substantial.

The Veterans’ Employment and Training Service (VETS) protects those serving in the reserves, National Guard or armed forces. Some affected have the right to be reemployed by their employer at the time they entered service, in addition to other special rights.

Certain industries have specific regulations (transportation, construction and agriculture, among others), so be certain you are familiar with laws relating to your particular company. Businesses that receive grants, financial aid or contracts from the government are subject to another particular set of regulations.

The laws are numerous, but a little attention now to ensure compliance is a lot easier and less expensive than taking corrective action later.

The Value of Organization and Time Management

How often do you find yourself looking for that important – yet somehow misplaced – piece of paper? Do you promise yourself that you’re going to become better organized, but find the days, weeks and months slipping by with too much work to do and not enough time to start that new filing system or categorize your overflowing email messages?

Everyone can benefit from good time management skills, but these practices are particularly valuable for entrepreneurs, who typically wear many hats on any given day and don’t ever seem to have a second to spare.

Here are some tips that successful small business owners and time management experts have shared with us:

The best and the worst of times -To better assess what changes might be most helpful for you, it is crucial to understand how you spend your time each day. Where are you not making the best use of your time? Another way to approach this is to note what you are doing differently on the days you find yourself most productive.

Are you diligent at daybreak or mentally best at midnight? Do you need solitude and a deadline to focus, or do your best ideas seem to be found after social interaction or when you’ve taken the time to simply let your mind wander?

But it’s Leap Year, so I got an extra day – Every day has 24 hours, and there’s nothing you or I can do to modify that. It is up to each of us to manage our behavior: it’s the only way to better cope with the finiteness of time.

Eliminate those distractions that are not helping you become productive. Find a system that works to help get – and keep – you on track (there are many available, so choose something you feel comfortable with and will use). Set realistic goals toward better time management. Streamline your inbox and organize physical and electronic files of information.

Routine tasks need handling, but perhaps they need time limits. A perfect example of this is reading and responding to email. If you keep an eye on incoming email messages all day long and then stop to respond immediately, there might be room for improvement by simply limiting the times you read and reply. Many small business owners put email at the top of their list as an area that truly needs better organization and time management.

What’s really important – Make that decision and prioritize each day accordingly. Many small business owners feel they accomplish more if they begin with the most difficult challenge. Usually this is the very task one wants to avoid but by facing it first, with fresh energy and a clear mind, you might find it wasn’t so bad after all. When using this approach, deadlines are often met ahead of schedule.

Let someone else do it – Determine which jobs could or should be outsourced, and then allow someone else to do the work. Tedious or simple tasks could be contracted out to free up your time for something more precious, and those areas that fall outside your comfort level and areas of expertise should definitely be left to the professionals.

Just say “no” – Only you can decide where your time should be spent. In addition to running your company, you want to ensure you enjoy quality time with family and friends. Most entrepreneurs are also involved in their communities, which is a wonderful way to serve others while networking to help grow their companies.

But, how much time do you really have? Many self-motivated business owners find it difficult to turn down requests to serve on boards or volunteer in other capacities. By thinking about your time restraints in advance, and realizing how much energy will be required for various community activities, you might find yourself making different choices going forward.

This pie is always being cut in different proportions: one year may be a great one for volunteering, as your youngest child heads off to college; another year might be too busy with helping your parents move, hiring new employees and wanting to spend more time with your spouse.
Be true to yourself as you give of your time and talents.

What I need most – Don’t neglect spending time just on you. Understand your physical and mental limitations and respect those times you need to take a break. When you find your schedule slowing, embrace it (that might be a great time to review your progress and switch priorities).

One final note is that some flexibility must be considered with anyone’s schedule, but by spending a few moments each day organizing and staying on track, you are creating habits and routines that will enable you to stay calm and focused as you manage your small business (and your life!) now and in the future.

Just as I Remembered: Why Consistency is Important for Your Company’s Success

I like consistency. I bet your customers like it, too.

Consistency brings repeat business from satisfied customers. It’s a simple thought, but one that is often overlooked in small companies.

Franchises are a step ahead in that regard. Although part of the charm of travel is discovering boutique hotels and wonderful local restaurants, if you are in a strange town and didn’t get recommendations from friends or do some research prior to arriving at your destination, are you going to take a chance or simply go with the familiar — patronizing places you recognize and know will deliver the products and services you need?

If you’re in a hurry and driving in a strange part of your own town, are you likely to pull up to a Starbucks or McDonald’s for your coffee fix? You would, after all, be familiar with how the drive-through systems work (even the dual lanes and separate windows for payment and product) and whether or not the restaurant takes plastic cash. You know how many ounces are in each size and what they cost. You probably don’t even have to review the menu unless you are in the mood to try something you don’t generally order.

If your customers are coming back, they are pleased with the consistency of your product or service.

They are also probably familiar with the interaction they expect to have with your employees and have been satisfied with their experiences in the past. Whether your customer chats with a representative on-line or welcomes a member of your staff into his home, he knows what to expect. In retail settings, especially, customers feel confident locating store personnel when employees wear some type of company uniform. Although each is a unique individual, your employees should be relaying a consistent message through consistent behavior. Think of a different scenario: a hospital patient is also a customer. Although the stakes are higher and more personal, patients are looking for consistency from health care workers. If one medical professional washes his hands carefully and dons protective gloves before certain procedures, wouldn’t the patient expect that same behavior from the other staff members?

Also remember to keep consistent with your marketing. Branding is extremely important to a company’s success. Logos and slogans are to be recognized and remembered. Think carefully before making a decision to change either of these. Keep your message consistent in all written materials, packaging and advertising, as well as in the content of your web site and on social media.

Inconsistency is definitely inefficient. Corporate policies and ongoing training go a long way toward encouraging consistency. It is tempting as an entrepreneur to sometimes just take each day as it comes, but this often causes the business owner to spend a lot of time and energy putting out fires instead of preventing the initial sparks.

Thoughtful consistency is an integral part of a successful business plan.

Free Help for Your Small Business

Looking for some temporary help this summer for your small business? How does an enthusiastic, motivated worker at a reasonable hourly rate sound? In certain instances, you might even be able to attract such talent at no cost to your company.

College students looking for intern positions are a valuable resource for many organizations. The National Association of Colleges and Employers (NACE) estimates an 8.5 percent increase for interns hired in 2012, compared to just one year ago.

Internships are a win-win situation for both the entrepreneur and the student. It provides you with new talent at a minimal cost. Interns are generally eager to learn and will work cheerfully and diligently, as they are hoping for the chance to acquire new skills and additional experience. A savvy intern is probably also hoping to impress you and receive a solid business reference and possible future job offer.

Of course, inexpensive labor should not be simply given the lousy assignments no one else in the office wants to handle. Interns are helping your business in any way you ask, but also expect to learn about your company. It’s probably a given an intern knows how to file and take out the trash, so these are not the types of tasks a student is wanting to solely perform this summer.

Most college campuses provide a tight-knit community for students, so word tends to travel quickly when an intern discovers a choice or not-so-choice assignment. To ensure you are able to recruit the best candidates each year, make sure your interns feel valued.

Here are some tips to make the experience a positive one for both you and your intern:

  • Provide a job description, as you would with any paid employee. Include short- and long-term goals, and be as detailed as possible where necessary.
  • Offer an orientation (again, just like any other type of new employee would receive). Ensure the intern has the opportunity to meet everyone on your staff during the first day or two of employment. Handbooks and other materials are welcome.
  • Designate a specific individual to act as the intern’s manager or mentor. This is a huge time-saver for the entire company, as the intern has one person he can rely on for answers to questions, and other staff members are able to focus completely on their other responsibilities.
  • Allow the intern to complete at least one project from start to finish during his stay at your company. Offer the intern the chance to showcase his accomplishments via a formal presentation by the intern to your management team.
  • Provide constant feedback.
  • Allow the intern the opportunity to “interview” members of your team during his tenure. Students generally consider the time spent listening to professionals at all levels of management describe their jobs and career experiences to be extremely valuable.
  • Consider hiring more than one student. A sole intern may feel somewhat like an outsider at his new position, particularly if there are no other employees close in age or relatively new to the company. Providing an “intern team” right from the beginning helps the interns feel more comfortable from the first day – and also gives you, the potential employer, an excellent opportunity to see how different individuals contribute to your organization.
  • Arrange for a specific work area for your intern. Nothing makes an employee (paid or not) feel less wanted more than shuffling him to a different work station every day.
  • Always conduct an exit interview. This is essential for both parties to receive feedback in numerous areas and should help you and your intern better prepare for the future.

 

This year, the U.S. Department of Labor is offering a special initiative, Summer Jobs+Bank, to assist businesses and students with internships. For more information on how your company can participate, visit http://www.dol.gov/summerjobs/Employers.htm.

One final note of importance: Obviously, most interns would prefer a position that compensates them; however, unpaid internships are a viable and legal alternative.

If you choose to offer unpaid internships, be aware that many of the same labor laws and regulations that govern your paid employees will also apply to unpaid interns. Please check with local, state and federal authorities for regulations that will apply to your specific internship program.

No business is too small or too large for an internship program, and everyone benefits if the program is properly managed.
Most entrepreneurs report the experience of seeing their company through fresh and enthusiastic eyes is a special one! We would enjoy hearing about what you have planned for the summer of 2012.