Free Enterprise: October 2012 Archives
Free Enterprise - The FindLaw Small Business Law Blog

October 2012 Archives

Hurricane Sandy Threatens East Coast's Economy

Hurricane Sandy is bearing down on a large portion of the Northeast and is already impacting small businesses.

Forecasters predict that the hurricane will be unusually strong and much larger than past storms to hit the region, reports NBC.

To prepare for the storm, cities like New York have already shut down their subway system. Experts say that Manhattan's five-foot sea walls may not hold back Sandy's 11-foot surges. As a result, the New York subway system could be flooded, reports NBC. Similarly, in other parts of the Northeast, roads have been closed and stores have boarded up.

So how can a small business protect itself?

Most Small Biz Still Vulnerable to Cyber Attacks

A new survey reveals that small businesses are especially vulnerable to cyber attacks.

The survey found that 77 percent of small business owners believe their company is safe from attack, 73 percent believe that a reliable and trusted Internet presence is critical for their success, and 77 percent acknowledged that cybersecurity is important for their brand image, reports Resources for Entrepreneurs.

Yet only 17 percent of these same business owners had a formal cybersecurity plan. So despite "overwhelming awareness" about cyber threats, the vast majority of small businesses failed to take any formal steps to protect themselves or their customers.

Startups Await SEC Crowdfunding Rules

The Jumpstart Our Business Startups Act came into being in April but companies are still waiting for the SEC to publish their eagerly awaited crowdfunding rules.

A provision of the JOBS act allows startups to raise funds through funding portals by selling shares directly to investors. Traditionally companies were required to sell shares only through an established broker-dealer which left many small and new companies out in the cold.

The JOBS act authorized it but until the SEC publishes its rules, companies have no way to register as funding portals. But crowdfunding is still happening.

How to Negotiate Better Commercial Leases

For companies that choose not to buy their office space, a commercial lease may be the biggest expense your business has each month. Something that's so central to your work needs proper attention.

Figuring out the details of the lease is important to small business owners but in many circumstances they don't take the time to go over it and negotiate the terms. That means every month the company paying out money that could go somewhere else.

While it may take some time to figure out the lease, you can help your bottom line by figuring out how to better negotiate your commercial lease.

Models Sue Top Agencies in $22M Class Action

Model Louisa Raske is leading a fight against New York City's top modeling agencies as the lead plaintiff in a large class action. Her claim is that the agencies defrauded model clients and took their money.

The lack of financial transparency in modeling agencies isn't a new issue. In the current suit Raske and the other plaintiffs are claiming that agencies had inaccurate financial statements, concealed funds belonging to models, and improperly used models funds. The agencies named in the suit are Ford Models, Next Management and Wilhelmina

While the suit targets the modeling industry, the issues could come up in any business.

Taxes About to Go Up for 163 Million Employees

There are two ways taxes can go up: either through actual increases or the end of tax breaks and the latter is about to happen to employees.

Every worker pays Social Security payroll taxes with every check that's cut. But the current amount of those taxes is actually slightly lower than the real value. The reason is a payroll tax cut initiated by President Obama in 2011.

The tax cut decreased workers' shares of the Social Security tax from 6.2 percent to 4.2 percent. But that cut is set to expire at the end of this year.

How to Avoid Burnout as a Small Business Owner

As the owner of a small business you are literally the key to the whole company. You provide the inspiration, the final say in business goals, and the raison d'etre.

You might think the most important business strategy is to maximize income or efficiency. But really what's most important is keeping the heart of the business going strong. That means you.

Work burnout is a real risk for small business owners who put more than just their time and money into their companies. If you want your small business to succeed, and of course you do, make sure that work is always a joy and you're excited to come back and do it again every day.

What Online Sales Tax Means for Small Biz

One of the big benefits for Internet retailers like Amazon is tax free online shopping. But that competitive advantage may soon disappear if Congress has anything to say about it.

Election year politics are messy but both parties agree that it's time to require online shoppers to pay taxes and consequently for online retailers to collect them. There are no fewer than three bills currently in Congress to this effect.

While it may be a burden for large sellers that exist only online the legislation is also a huge boon to small businesses that sell in stores even if they also have online sales.

Women-owned small businesses are becoming more common, but they're still playing catch-up when it comes to getting start-up funds, generating revenue, and staffing their companies, experts say.

October is National Women in Small Business Month, set aside by the U.S. Small Business Administration to focus on key challenges facing female job-creators, Reuters reports.

Companies owned by women grew at a rate of 44% between 1997 and 2007, according to the latest government data. That's twice the 22% growth rate of businesses owned by men.

Worker Cooked to Death at Seafood Plant

An employee at a Bumble Bee Foods factory in California was killed by being cooked to death.

Jose Malena apparently fell into a "steamer machine" at the tuna processing plant in Santa Fe Springs. The machine is basically a giant oven. When paramedics arrived at the scene, the 62-year-old Malena was already dead, reports KTLA-TV.

OSHA investigators are looking into the incident and so far it's not clear how the employee ended up inside the device. Malena had been with the company for more than six years.

More Small Biz Turn to Amazon for Banking

Amazon.com has gone from selling books, to selling electronics, to now selling debt. A select few Amazon merchants are now being offered business loans by the online giant. Businesses may find that Amazon loans are available when traditional sources of financing remain closed.

A business needs financing to grow. However, in these tough economic times, you probably need a rock-solid business with several years of positive growth to receive any money from a bank.

So many businesses have turned to business credit cards (and their high interest rates) to fund the growth of their business. With Amazon joining the lending business, merchants may now be able to receive a loan with much more favorable terms than available elsewhere, reports The Wall Street Journal.

New Risks for At-Will Employment Disclaimers

When it comes to hiring employees, the two basic forms of employment are at-will and for-cause. The titles have to do with how an employee can be fired.

For-cause, or non at-will, employees can only be fired based on a pre-agreed upon reason, often in the employment contract or handbook. NO the other hand, at-will employees can be fired at any time and for any reason that isn't unlawful. That's often what employers are looking for.

To avoid altering at-will employment many businesses include a disclaimer in their employee handbook to specify that employment is at-will. But a recent ruling by the NLRB could make that a thing of the past.

Walmart Labor Protests Spreads to 12 States

Walmart labor protests have spread to 28 stores in 12 states.

The protests only involved 88 employees, which is a drop in the bucket considering Walmart employs 1.4 million workers worldwide. However, the protest followed a strike last week in the Los Angeles area that involved 63 workers and precedes a planned strike at the company headquarters.

The strike last week was the first strike ever in Walmart's 50-year existence, reports The Wall Street Journal. And the increased labor activity could signal another battle between the company and labor unions over the unionization of the company's employees.

1 in 4 Small Biz Without Health Insurance

A new study found that about 25 percent of people who own small businesses with fewer than 25 workers do not have health insurance.

Typically, these small business owners do not provide health insurance either for themselves or for their employees, reports the Huffington Post.

So what will the fallout be when Obamacare kicks in next year with its provisions requiring that certain individuals and employers purchase health insurance? Surprisingly, not a whole lot.

'Topless Maids' Mobile Ads Banned in CA

The owner of a topless maids business in Los Angeles has been told he has to stop parking his mobile ads on city streets.

The business owner, Sami Ammari, has been parking his hot pink van emblazoned with "Topless Maids" and the phone number 818-666-HUGE near his business in Studio City, reports NBC.

Unsurprisingly, the van has sparked an outcry from local residents, and the City of Los Angeles put Ammari on notice that he can't park the "mobile ad" on city streets anymore. Ammari has been fined thousands of dollars and is now parking his van in surrounding cities like Burbank.

BadConsumers.com a Good Idea for Small Biz?

There are lots of customer review websites but most of them rate businesses rather than allow businesses to give reviews of bad customers.

Consumer protection is great but sometimes businesses need a way to protect themselves from bad customers too. Allowing business owners to share information about people who don't pay their bills or argue over already agreed-upon prices is an important service, especially for small businesses.

Peter Robideau created a service to fill that need, www.badconsumers.com, but think twice before you register.

Your employees may be driving you up the wall, but if your small business doesn't have a distracted driving policy, you may be headed for a crash course in employer liability.

Distracted driving accidents take place at a rate of about one every 24 seconds, Inside Counsel reports. A good number of those crashes involve employees within the scope of their employment, which means employers are often held liable.

A few case studies show how costly these accidents can be: In one crash, a lumber salesman was driving while using a cell phone and left a woman crippled. That led to a $16 million settlement, according to Inside Counsel. Other crashes involving company vehicles resulted in payouts as high as $22 million, the magazine reports.

How to Get a Liquor License

If you plan on opening a bar, club, restaurant, or even a convenience store that sells alcohol, you're likely going to need to know how to get a liquor license.

The administration of liquor licenses is typically governed by local agencies like municipalities, cities, counties, etc. So the laws and requirements will vary greatly even among jurisdictions in the same state.

Still, there are some general things you should know about getting a liquor license, as written by Dummies.com.

Dealer Sells Car Too Cheaply, Has Buyer Arrested

A car dealership in Virginia sold a Chevrolet Traverse for way below the asking price to customer Danny Sawyer. Realizing its mistake, the dealership then tried to get Sawyer to pay the difference. When that didn't work, they had him arrested for theft.

Getting a great deal from a car dealership is not a crime, and the criminal charges for theft were dropped, reports ABC.

Now, the car dealership is facing a multi-million dollar lawsuit brought by Sawyer. The customer claims that having him arrested was malicious prosecution and he claims emotional distress and other injuries relating to the arrest, reports ABC.

Startups Need to Hire Lawyers, Too

There's a misconception in business that lawyers are only for big established companies and not necessary for startups.

It's true that big companies need lawyers. But it's not something about size that makes it important. All businesses should have a lawyer to protect themselves from the public, the government, and their coworkers.

Often when legal issues become a problem, it's too late for an attorney to do more than damage-control. There are key times when your business should hire an attorney to protect your future interests.

With the Economic Census Silence is Not an Option

Every five years the government does an economic census to gauge the American economy and measure businesses.

Yes, it's that time again. The next economic census year is 2012 which means business owners, including those who run franchises, could receive a census form sometime before the end of the year. That paperwork is due in February 2013

The census asks business owners to provide a range of data for their companies. Unlike the population census, replies are not optional.

When is Appearance Discrimination OK?

There is no such thing as appearance discrimination under federal laws.

Employers are generally free to hire only the pretty people.

But if you do base all of your hiring and employment decisions on looks, you may be opening yourself up to a bevy of lawsuits.

So what gives? If you are allowed to discriminate based on looks, why can you still get sued?

Road Kill Found in KY Restaurant's Kitchen

Road kill was found in a Chinese restaurant in Kentucky prompting health inspectors to shut down the popular restaurant.

Workers at the Red Flower Chinese Restaurant were seen wheeling in a box with a deer tail, foot, and leg dangling out of it, reports CBS. In full view of patrons, the box left a blood trail right into the kitchen and workers followed to mop it up.

Some customers immediately called the health department. Other customers immediately threw up.

Alcoholic Pizza in Boston is for Adults Only

Salvatore's, a Boston-area pizza chain, came up with the crazy and/or brilliant idea for alcoholic pizza. Now they've put it in action in their customers are into it.

The idea came when the corporate chef wanted to incorporate dried cherries into a pizza. The cherries were too tough when the pizza came out of the oven so he got the idea to hydrate them. In vodka.

Brilliant.

The only catch is that the alcohol doesn't burn all the way off in the oven. So he had to make some adjustments to meet the legal requirements.

Man Pays $25 Bill with 2,500 Pennies, Gets Sued

Jason Robert West was upset over a $25 bill he received from a medical center in Utah so he made his payment using only pennies. But that stunt cost him $140 in addition to the bill.

The incident took place in May 2011 but in September 2012 West was convicted of disorderly conduct and ordered to pay a fine. The judge said the problem wasn't paying in pennies but rather the way that he made the payment.

Last June, West told reporters that he was calm when he paid in pennies, reports Business Insider. But the employees at the medical center and a patient who was in the waiting room disagree.

5 Tips for a Successful Virtual Office

A brick-and-mortar office is becoming as ancient as it sounds. Companies across every field are turning to running virtual offices and managing telecommuters. A virtual office saves employers money, and employees generally love the freedom of working from home.

Unless you own a business like a restaurant or a medical office, you probably have no need for an actual physical office.

With a virtual office, you have the flexibility of working from almost anywhere on a shoe-string budget. And if you hire the right team of telecommuters, your office can run as smoothly as if you were all sitting in the same building.


How Do Mom Biz Owners Take Maternity Leave?

More small business owners than ever are women. That means some of those businesses have to figure out how to deal with maternity leave for an owner.

Executives and owners are entitled to a maternity leave just like any other employee but often it can be hard to let go and accept the time off. Companies don't run themselves, after all. So any extended leave can lead to complications.

New moms deserve some time off to enjoy their little ones. But you also need to protect the company so that it doesn't suffer or get into legal trouble while a director is on maternity leave.