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.

  • The tip: Setup an account at your bank that is Deposit Only and use that account if you are going to accept a wire transfer.  Have a separate operating account to write your checks from.
  • The other tip: Use a service called Positive Pay which requires you to be more proactive in working with your bank, but prevents any check from clearing your account if you have not previously informed the bank of the payee, the check number and the amount.
  • The reason: Once someone has your company name, address, checking account and bank routing number, they have enough information to print or order blank checks that draw from your checking account. This happened to me as well as my friend that I was dining with last evening. Prior to us using the above two tips, we had a couple of sprees where hundreds, perhaps thousands of checks were written using our account number and distributed all over the place. We had people calling daily who had sold their Harley, their car, their guitar and even their time and expertise in exchange for a fraudulent check written and drawn on our account. Unfortunately for the victims, the sellers of goods and services, these bad checks were rejected at the bank but usually not before they had been scammed out of their goods.

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.

Focus and Effectiveness in difficult times

Times are tough (getting better though), there is no question about that… Remaining focused requires self-discipline and organization.

Being an entrepreneur often comes with the curse of too much idea flow and not enough time to execute on all (or even some) of them.  I wrote a bit about that in a previous post Young Entrepreneurs – Great new ideas and this problem spills over into just about every facet of daily operations and effectiveness. Tough times in business and particularly when coupled with tough times economically compound this as a problem unless addressed and overcome (if even just temporarily).

As I mentioned to the staff the other day, despite the inconvenience and and struggles that have accompanied the current state of the economy and business in general, I am grateful in a way and proud of how the company (VoIP Supply) has reacted and how my employees have adjusted both professionally and personally. Why?

Internally, the past six months has redefined the day and how it needs to be approached in order to be an effective and productive day, as focused and efficient as possible so as to squeak out every last ounce of forward progress. Considering our reduced headcount, for the most part and on most days, my team and I have managed to adjust and prioritize in order to consistently accomplish this. How?

Limited distractions. We have contracted into our core and in such we require a lot less manpower to complete the same volume of transactions while continuing to refine and improve our content, competitive positioning, marketing initiatives, internal automation and efficiency improvements. It is remarkable how much more time in the day there is when you don’t have 2-3 meetings to review project status and plan for future projects. We scrapped a lot of non-essential projects that were of little immediate impact or relevance to our core business and in doing so reduced our overhead needs while improving the efficiency of that which remained.

Pre-digesting the day. For me, it has often been very helpful to look at what I have planned for the day, week, month, etc. and break them down into the smallest pieces possible. Breaking down a week long project into hourly or daily mini-projects helps to decrease the distractions, remain focused and effective, provide a frequent and recurring sense of accomplishment that in and of itself is propulsion enough to move to the next task and repeat the cycle. A great approach to use is the project management method of Scrum. Google it, it is very helpful for project organization and management.

Be positive, focus on it and reinforce it for others. It isn’t hard to be sideswiped these days by bad news, difficult circumstances and tough choices and each has the potential to kill any positive attitude you had at the time. Everything happens for a reason and getting through the issue will likely make you stronger, wiser or both. Everyone around you is also going through similar times, so try to keep that in mind and project a helpful and positive attitude rather than spread any negativity that you might be feeling in your own life. It is very difficult to be creative and productive when you are dwelling on negative aspects of life and work.

Some other simple ways to help remain focused and effective all of the time…

  • Use a calendar with reminders. Outlook works for me, there are plenty of others out there such as Google calendar. Schedule your projects, tasks, due dates, reminders, and of course your appointments. Staying organized and on time helps to be focused and effective.
  • Daily to-do lists. I maintain a book or two of backlogged tasks, but each day I pick a few to work on and hopefully break apart into bite sized pieces I can complete that day. Crossing each one off is a confidence boost and positive reinforcement of being organized, focused and effective.
  • Step back and relax a bit. Not too much, but face into the monitor all day will wear you down. It is often easier to see and solve some problems and maintain mental organization by taking a step back and looking around, talking with peers and relaxing when possible.

A lot of this is simple stuff and common sense in general, but even as I write this I am reminded of how easy it is to become abosrbed in something, distracted by something else and end the day completely unproductive and perhaps more disorganized than when the day began. I often write this stuff as much for my own mental organization as I do for any other reason(s). Common sense seems to be lost these days anyway, too much going on, too fast a pace and not enough time to think in advance.

Hmm, Lying (or dementia) vs. Torture – Which is worse?

Ok, I’ve heard enough, how about you? Is it even worth the time and effort to speak trying to stir up drama and controversy with this whole Nancy Pelosi vs. CIA issue? Is it worth my time typing this post? Probably not. I’m Canadian and can’t vote, don’t care for or dislike Nancy Pelosi and this has nothing to do with politics. Just the media. Find something worth talking about or go back to 30 minutes a day, please.

Here is my rant – keep reading though, there are much more important topics to follow…

I find it astonishing that there are people in this world who truly think that outing Pelosi for either lying or simply not having the capacity to remember all things spoken to her is more important than the topic at hand. The US has been torturing people, makes no bones about it yet feels justified in condemning the UAE for their use of torture, stating that they “cannot trust those who employ torturous methods”.  Here in this great country, those same people would prefer to spend time cranking up the media engine to turn your attention to a lie rather than the real crime of torturing people. Apparently we shouldn’t trust ourselves either.

She lied, fine, kick her from her post, just make sure you do it after you get rid of those who were involved in torturing people and lying about that. It’s all about priorities.

My preference would be to hear positive news daily instead of the crap that is on all day everyday. In lieu of that, can we please focus and prioritize the topics based on actual relevance and severity?

Lying is bad, torturing is worse. It is truly that simple.

If you’ve got a comment that is in disagreement with that, please post it and make sure to include your name so I can put it on the “special” list.

More important topics (inho):

  • Habitat for Humanity: Habitat has built more than 300,000 houses around the world, providing more than 1.5 million people in more than 3,000 communities with safe, decent, affordable shelter.
  • Camp Good Days and Special Times: This past summer, over 1500 children, including children with cancer from several foreign countries, participated and experienced the magic of Camp Good Days firsthand at our own beautiful Recreational Facility, located on the shores of Keuka Lake.
  • Buffalo City Mission: Buffalo City Mission offers long-term recovery programs, counseling, work and life-skills training, education assistance and health-care services for homeless men, women and families committed to turning their lives around. We offer outreach programs to prevent homelessness for individuals and families in the low-income community.
  • Durham Cares: Founded by two friends of mine, Henry and David. DurhamCares was founded to help Durham residents love their neighbors; not just the people next door, but across town and even across the world. Our vision is to see our city engaged in serving each other, building relationships across cultural boundaries, and transforming our community through committed involvement.

Merchant Processor Reserves – Retailers Beware!

Watch out for Reserves being held back by your Merchant Processor.

For years we were using Chase Paymentech to process our credit cards for online sales. They received hundreds of thousands in profits from fees charged to us as we pushed through more than $10,000,000 per year in transactions. With an incredibly low charge-back rating (<.01%) and a consistent and positive relationship, Chase Paymentech somehow thought it would be a good idea to put the squeeze on their best customers and withhold up to $200,000 of our working capital.

I understand protecting yourselves, but this is completely unnecessary, insulting and inconvenient to our business. We are not a high risk merchant, we are selling VoIP hardware B2B.

Our average credit card sale is about $750 and our annual charge-backs are few and far between with only one or two per month (out of 1,500+ transactions) and usually because the customer does not recognize the name on their statement.

Why would a company (Chase) making so much off a good customer want to take unjustified steps that potentially upset the cash-flow and balance of said customer? Is it really just “policy” or is this an opportunity to solve some of their internal cash flow needs?

I know we are not the only one being subjected to this and it is a shame as for other companies, this could be a death sentence. There are other processors out there that do not carry reserves (higher rates though), so I would make sure you have Plan B in your back pocket if you are a retailer taking credit cards.

Needless to say, we switched to another processor that doesn’t (or isn’t) holding any Reserves. Thanks Chase, well done!  We’ll do fine without you.

Today's Labor Unions – one piece of a spoiled pie.

Who thinks that today’s Labor Unions are necessary and beneficial to this country?

The US economy is a mess today, but even with all of the changes taking place and being made, the root causes are still in existence and spoiling the delicious Apple Pie that all home grown Americans take for granted.

I’m no historian, politician or labor expert, this is merely my opinion. Comments are welcome, especially if you have reason (legitimate selfless reasons) why anyone should feel otherwise. This is less about complaining and more about asking someone to please clarify this for me and anyone else bothered by Labor Unions.

In my humble opinion…

Labor unions have been around since the dark ages and from time to time have actually served a valid purpose, but how many employers in the US could actually get away with paying next to nothing for slave labor? The idea of unionized labor isn’t all bad, but I truly feel that combined with some of the other spoiled pieces of pie I’ve written about, today’s unions are making America weak and threatening (not helping) the livelihood of hundreds of thousands of people.

Why is it that labor union members are entitled to $70,000 a year for pushing a button or pulling a lever?

How is it ok with the general public that a union member, laid off because of financial strain to the employer could possibly be entitled to years of compensation (without doing any work) at a large percentage of what they were previously making?

What a joke that the government is willing to bail out car makers, force them into bankruptcy, allow for large scale layoffs, dealers closings and perhaps the total collapse of consolidation of certain brands.

What a joke that the CEOs of these auto giants can’t seem to figure out a basic plan to get their company back on track and making the country proud. Cut your pay, give back money clearly not earned to help preserve jobs and right the ship and most importantly, find a way to right size the labor unions or find a way to get rid of them altogether.  I have to imagine (though I don’t have the facts here) that if unemployed people were not compensated by the employers any more than their last day and if the hourly rates for unskilled button pushing were more in line with minimum wage. When the executives took compensation based on what they contributed and earned not what they felt entitled to and the labor unions recognized how good they would look if they tried hard to preserve jobs and the very companies that fund them, that billions would be saved, no bailout would be necessary and a whole lot of other positive changes would also result.

Come on people, the problem is not nearly any worse than we make it, stop allowing greedy and un-entitled people to force this country into the dumpster. Stop supporting the unions or pretending they are not the problem or at least one of the connected problems.

While I have always thought that labor unions were a thorn in America’s side, the recent rumblings that Obama might change the rules to permit even more labor unions to pop up without employer knowledge and force employers to begin bargaining immediately is crazy. How is that going to help anything? As a CEO myself, if the employees are that unhappy that they need to form a union then I suck as an employer and they should walk out the front door and get a job they are happy with.