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.

Personal Brand Building and the Internet Land-Grab

The Internet called, they want to know if you’re coming to pick up your property?

This isn’t exactly a new idea or concept, either of them for that matter. Many have spent countless hours/days working on and perfecting their personal brand (on-line or off) and surely the Internet has been around for some time now. The game changer, at least for the moment, is the uptick in quantity and adoption of social media sites and applications. Just like managing your personal brand offline, there are a lot of places to manage when claiming your lot in cyberspace. More sites pop up, some will shut down, others will consolidate and until the application is created to manage them all from one place, you have a lot to keep track of if you want to do it right.

I don’t claim to be the expert on this, but from a business perspective, I see the value am taking steps to be where my customers and colleagues are, to be visible and helpful in places where they hang out and am losing the notion that the telephone and physical networking events are primary sources of business communication. Since I am not the most outgoing person in the world, networking on-line is a lot more comfortable for me than mingling at public social events. On-line, I can cast a huge net with a truly valuable offering, a recognized brand (or name) and the patience and persistence to make sure the net is noticed in all of the places that my customers might be waiting. My customers do not necessarily want to be found as they are intelligent people quite capable of finding me when they need me. It is my job to make sure that I have the brightest and largest target on my back (and front) as possible.

People like buying from their friends and from people who are helpful rather than pushy. Sure, a seasoned sales rep can coerce or bully you into buying sometimes, but customers are more and more savvy, they know what they want and they know they can get it cheaper somewhere else. This is where combing your personal brand with your business brand becomes very beneficial. It takes a long time, a lot of work and plenty of patience to achieve any sort of results, but hang in there and I’m sure you will see the long term value begin to pay off. Start with what you know and offer advice. Join, follow and contribute to groups in your line of expertise. Asking questions, meeting colleagues, working together on common problems that you face in your field will help solidify the value associated with your newly established personal brand.

Personal brand: Your name can carry a lot of weight in the search engine, particularly if you have a unique name or a nickname used by all of those who know you. Mine is uncommon enough that I was able to grab up a lot of the property associated with it and begin weaving my net between these sites. Below are some examples that I’m using to pull it all together.

  • Facebook.com: There are plenty of Ben Sayers’ out there and no really unique way of modifying the URL to your profile. But, if you search for Benjamin Sayers, i’m sure you’ll find me. If you combine my name with company affiliation, it gets a lot easier. http://www.facebook.com/profile.php?id=766234121
  • LinkedIn.com: Much more of a business networking site and one that has been around for a lot longer than most, LinkedIn is a good place to organize your Rolodex and to expand it through introductions made through your colleagues thereby extending your personal network. LinkedIn gives you the ability to get your Name (Brand) in the URL which will help when search engines come a-lookin’. Benjamin Sayers on LinkedIn.
  • BenjaminSayers.com: This blog is a good example of a brand building tool offering the most control and flexibility when it comes to customization, search engine optimization and traffic driving opportunities. It takes time to get sufficient content and traffic to the site if you are not already well known, but posting valuable information, asking and answering questions and sharing your experiences and advice will begin to pull people towards your goal.
  • Twitter.com: A newer medium for communication combining both personal and business updates on “what you’re doing now”. This one is fairly new to me, but has provided significant value already and has opened my eyes to a lot of useful resources I would have otherwise gone without (most likely). I’ve found and now follow a lot of people in the entrepreneurial, VoIP, technology, general business and venture capital spaces. Everyday there are some exceptional tweets with tips, tricks and URLs to content often specific to my interests. I’m found at http://twitter.com/benjaminsayers, come follow along.
  • Company Blog (VoIP Insiders): Though I haven’t contributed in a while, our company blog gets a lot of traffic and is a great place to help build my personal brand. Re-posting content or writing new posts on blog.voipsupply.com that links back to BenjaminSayers.com will help with search engine rankings and help associate my personal brand with our business brand which is well known and highly respected.

There are other places out there (myspace.com, twibes.com, spaces.live.com, google profiles, ning.com) and new properties are created all of the time. If you are building and managing your brand, now is the time to snap it up before someone else with your name decides to beat you to the punch. If you are looking for help building your personal or business brand on-line (of off), the people at one of my companies, Sayers Media Group, can help. Along with creating IVR, SMS, Web, VoIP and other communication applications, our marketing team is experienced and well aware of how to build an on-line brand and drive traffic to it from all angles. If you just have questions, send a tweet, comment on facebook, ask a question on linked in or comment on this post.

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.