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Lawsuits happen. That’s true for any successful business, even if you take my litigation-avoidance advice in this blog. While you cannot prevent all lawsuits, there are steps you should take to minimize the damage and headache when the summons and complaint arrive at your office door. In fact, if you know that the lawsuit may be coming, you can do some of these things before you are served with the lawsuit.

 

First, train your office staff on how to deal with deputy sheriff’s and process servers who come calling. This may seem like a no-brainer, but companies get defaulted and pay large judgments because a receptionist put court papers in the circular file. You normally have only 20 days to respond to a lawsuit. Sometimes that time can be greatly reduced by a judge’s order, so it’s important that you get and read the documents right away. Conversely, if the suit papers are directed at an owner personally or an employee, there may not be any obligation to accept them, or to call the individual to the front to be served. Each situation is different, so discuss this with your lawyer.

 

Start making phone calls. You know I am going to tell you to call your lawyer asap. That’s not just self-serving. Your lawyer can advise you on what other steps to take. She can also quickly find out what is happening at the court by checking the docket, and can contact opposing counsel if need be. You should also notify your insurance carrier. You may have be pleasantly surprised to learn that you have some coverage. Keep in mind that your insurer may defend the case pursuant to a “reservation of rights.” This means it can try to disclaim coverage later, or it might only cover the costs of defense. In Massachusetts, this also means that you can pick your own lawyer rather than using the insurance carrier’s lawyer. Although some insurers are loathe to tell you this, when they defend under a reservation of rights in Massachusetts, you can pick your lawyer and the insurer will pay reasonable attorney’s fees.

 

Put your normal document destruction/retention policies on hold. You have an obligation to save relevant paper and electronic documents that may be related to the claims and defenses. In my experience, a missing document can be more problematic than an unfavorable document. The jury will always think that you intentionally destroyed a document and will, usually with the judge’s blessing, use it against you. It’s human nature to think that the missing document would be a lot more important than it really were if it were produced.

 

You and your attorney may want to start investigating the facts as soon as possible. There are certain strategies, within the bounds of ethics, to pin down certain witnesses before the other side obtains their depositions or otherwise speaks to them. I’m not going to give up all the tricks of the trade here.

 

Finally, come up with a strategy to defend the case. Lawsuits can sometimes be like a game of chess. If you and your attorney can think through the case from start to finish, predict your opponent’s moves, and plan your own moves and counter-moves, you’ll put yourself in a better position to win.

Don’t take a defeatist attitude.  Think of getting sued as part of the cost of doing business.  Approach it head on like any other business problem.  With some planning and some smarts, you may be able to minimize the distraction and damages.

By Adam P. Whitney

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Sometimes large companies suck. They are too big to be flexible. Too big to be responsive. Too big to give a damn about a single customer.

 

That’s not always the case. I’ve recently had very good experiences with Charles Schwab, with whom I have my investments. Recently, I had to do some complicated transactions with Schwab, the details of which are unimportant. Whenever I spoke to someone from Schwab, they ended the call by telling me that they “appreciate my business”. I’m not a small fish for Schwab. I’m plankton. But all the folks at Schwab were very helpful to me. The reps took ownership of the problem I had and took care of it. They treated me with respect and made my issue a priority. I felt like they really did appreciate my business; it wasn’t just a slogan.

 

Contrast that with my experience with Capital One and its “no hassle” rewards. Although it says that on my credit card, I wasn’t actually getting any rewards. I called the customer disservice department to inquire why. The rep told me that I hadn’t asked for rewards, but that (reading from a card) “I’m very excited to tell you that you qualify for the following rewards.” It was an insult to my intelligence to think that he was “excited” to tell me about rewards. What marketing nitwit makes him say that? Then he reads off a list of rewards options. Can I get that in writing, I ask. No, he can’t do that. I have to call them and hear about the rewards and how exciting they are. Annoyed, I mocked Capital One’s slogan to the poor sap from customer disservice. I won’t be using that card again.

 

Even worse is my experience with Verizon. After a weekend of activities with the kids, I sat down at the computer late Sunday afternoon to catch up on some work. I have my office internet through Verizon, and I signed up for the Google Business Apps, including gmail. I can’t log into my gmail at all. Can’t even see old messages, let alone new ones. I call Verizon tech support, which tells me it’s a billing issue, and suggests that I didn’t pay for the Google Apps. I know this isn’t true because I can see my $0.00 balance online, and tell him that. He sympathizes, but explains that the sales department has the power over this, and they are not working on the weekend. I’m shocked that my business e-mail can be completely shut off without notice, and that tech has zero power. He checks with his supervisor to confirm that there is nothing they can do.

 

I call tech again 20 minutes later and explain the problem anew. The second tech person tells me that it’s not a billing issue, it’s a server maintenance issue. No one can give me access to my e-mail until the server maintenance is back up at 7:00 a.m. on Monday. I’m incredulous. Why didn’t they inform me (or anyone else, including apparently the first tech. person and his supervisor)? She seems a little annoyed as well. She doesn’t know why customer disservice didn’t e-mail their customers. But I know; it’s because they don’t give a damn about their customers. Still annoyed, I take to Twitter and chat with @VerizonSupport. He tells me that I don’t have a Verizon domain (I don’t think he has a clue about how Google Apps work through Verizon), and that I “may have to contact gmail.” He’s guessing. I’d rather he just admit that he doesn’t know than give me a third answer that conflicts with the first two his company made.

 

Verizon and Capital One can probably get away with it. But private business owners must appreciate their customers. Never take them for granted. If your client or customer is worth working for (if they are not, don’t accept their business anymore), treat each one as your most important client. Don’t pass the buck to or place the blame on someone else in your company. Instruct all your staff who deal with clients on these things. You don’t want your employees to tell customers stuff that obviously isn’t true (like Verizon), or to blame a problem on Joe in accounting. A client’s concern is everyone’s problem. Don’t tell clients that you are too busy or make them feel they don’t matter. If you do that, soon you won’t have any clients, and you won’t matter.

 

By Adam P. Whitney

 

Guest Post by Eve Pearce

Many people are hesitant to officially start up a small business because they fail to undertake essential preparations for the financial and practical stability of their project. The dreaded business plan is one such factor. Approach any local bank for advice on obtaining a start-up loan and they will tell you the same thing. You need a business plan. Not only that, but it needs to be thorough, precise and comprehensive. Your bank manager is not your enemy. In fact, local banks can prove to be very useful business allies if they are able to offer you a suitable loan to set yourself up. You just need to be professional, reliable, and most of all, responsible.

Does Everyone Have a Business Plan?

You might have spoken to friends or family members already in business, and perhaps it seems as though they do not have a business plan. Perhaps they don’t see it that way. Traditionally, small businesses come about by accident or by natural evolution. Some people nurture a hobby, for example photography, and when they are older and more confident, they might take the break and set up in professional business. Or their circumstances might change through redundancy or changes in the workplace, so that they feel the need for a fresh start. It doesn’t always happen this way. You can start your small business any time you like, but there are differences between doing it right, and doing it wrong. You will have to comply with government laws and regulations. Your business plan is a part of this process. It ensures that you set out your intentions clearly, and you have a legal document to refer to as and when it is needed. And of course, there is the ever-present question of money. Where will you find the necessary finance to start up your small business?

Obtaining a Start-Up Business Fund

Finance can be obtained in many different ways. As mentioned previously, your first option is usually to approach your local bank. You present a thorough and well-researched business plan, your financial advisors check it over, and they will confirm if you are eligible for a start-up loan or not. Some small businesses take the more risky approach of using companies that provide payday loans. A payday loan is designed as a short-term offer of ready cash. Initially they sound like a great idea, especially if you just need enough money to pay for appliances or equipment in order to complete your jobs. The downfall of these loans is that they sometimes leave people trapped in a cycle. You must be certain that you are able to pay the balance of the loan at the end of the month, or whichever are the agreed terms. If not, you could end up paying ridiculously high interest costs for repeated borrowing, and that will be detrimental to your business. A payday loan should only be considered as a rare back-up option when it comes to financing your business. You must be able to provide stability in order to grow your business, rather than being trapped in a cycle of debt that could lead to personal stress and the breakdown of your  company.

Another popular, and more stable, option for business finance is angel funding. This is a fairly obscure concept, only recently becoming more widespread in popular consciousness. There are lots of high-profile entrepreneurs and business owners all around the world who want to help people set up their own successful enterprises. These entrepreneurs have been there before, they have struggled and striven to get their own companies off the ground, and they understand the plight of the new business owner. Therefore, now that they are in a position to assist financially, they are open to requests from relevant people and organisations. You simply have to find the right company director or business owner for your business plan.

Angel Funding and Crowd Funding Options

Another aspect of angel funding is that lots of different people can contribute towards a project and set up a business as a group. This process is known as crowd funding, and is a continuation of the angel funding principle. Crowd funding people are those who perhaps find themselves with a little spare money and they want to invest, but they do not want to lose it in large established organisations. Instead they can join a crowd funding website or group, where they can read about business plans submitted by new entrepreneurs and potential new business owners. Again, your business plan has to be watertight. You have to sell yourself, your business, your ideas, and your vision for the future. The business plan does not simply appear in front of you. Yes, you can obtain templates from lots of Internet websites, or from your banks and even from government organisations. But the work is yours. Do it yourself, do it properly, and do it to the highest possible standard so that you have a much better chance of succeeding as an entrepreneur. 

Believe in Your Business Advisors

If the idea of writing a business plan fills you with dread, you can seek professional advice from established businesses in your area.  Yes, these companies will charge a fee for their service. Do your research, meet with the advisors, and make your own informed decisions before choosing the right people to help you. If you have already begun to write your business plan, do not be afraid to share it with your advisors or even with your legal team. They will give an honest and professional opinion on the quality of your proposal, based on their experience and knowledge. These business allies are here to help you. We can all work together, if we can only trust each other and share our talents and skills. Don’t be afraid of your business plan. Get it done, and reap the rewards that will surely follow.