Young Entrepreneurs – Protect Yourself and Your Future

A few very important and unknown or overlooked aspects of business…

This post comes about as I was having dinner last evening with a distributor, partner and occasionally a competitor – all one in the same. It was so interesting and even amusing to exchange stories of similar experiences as we are in the same industry with a close business model, of roughly the same age and size. Some of these topics should serve as warnings and things to prepare for if you plan on starting a business, particularly an online business catering to more than just a local customer base.

Checking account fraud prevention. I can’t imagine it will be too long (certainly shouldn’t be) before actual printed checks become a thing of the past. In the meantime, you need to be prepared and protect yourself from fraud. While this may not pertain to all businesses, the crack in the armor stems from extending wire transfer as a means of payment for customers though that isn’t an exclusive source for this fraud tactic. Maybe they prepare customers now, but when I got started, no one at the bank every had this conversation with me until it was too late and the police, FBI and Secret Service had to get involved.

Credit card fraud control and prevention. I certainly don’t need to explain what this is or even the multitude of angles people choose to execute their fraudulent activities, but there are a couple of definitive ways to protect yourself and they work regardless of tactic chosen by the thief. It would have been nice to have been warned about this back in 2004, before it cost me more than $100k.

  1. If you are shipping physical goods, make sure you are shipping to the billing address or have your customer call and list an alternate shipping address on their card with the card issuing bank.
  2. Make sure that you get the phone number off of the back of the credit card and the name of the bank that issued the credit card. It is your responsibility to call that bank and make sure the card is valid as is the shipping address. Using credit card processing address verification is a good start, but it is not good enough to protect yourself.
  3. Look out for telltale signs of fraud. One we see often is customers calling late on a Friday that need the product delivered the next morning. Price is no object to them, nor the expense of Saturday delivery. Most people can wait until Monday, you’d be wise (usually) to drag your feet and process the order the following week or insist on a wire transfer vs. a credit card.

Asset and operations surveillance and monitoring. This one is pretty simple and straightforward. You’ve built your business and despite the perceived big brother effect that comes along with cameras in the work place, if you have expensive goods that someone might want to steal, put them under surveillance or you may as well leave your door unlocked. It’s also a good idea to monitor the outside of your business and not just the inside as a ski mask might hide the face, but it doesn’t hide a license plate.

Planning near and long term. So you built your business and things are booming right along. You have a business plan but are bogged down with day to day activities and just keeping things afloat. Planning your current activities and projects is critical to getting things done and working efficiently, but don’t put your head in the sand for too long. You need to make sure that you take some time to get away and revisit or revise your long term goals. It is easy to ignore when scrambling to make ends meet, grow the business, keep customers happy and try to have some sort of life on top of it. Plan for the long term as if all of your customers are going away and your marketplace is drying up. What would you do if what you did or sold suddenly became obsolete? Find some other baskets and plan to move your eggs around from time to time. I’m not suggesting you stop what you are doing now, just that your eyes need to be open and you shouldn’t assume anything.

Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.

Comments

No comments yet.

Leave a comment

(required)

(required)