Monday, September 7, 2015

Building walls

     Free daily tips, information, advice and ideas
     to help you better manage your small business.

     Owners of small businesses need to protect themselves against lawsuits, burglars, identity theft, and other foul deeds. 

     Example: Nora is a hair stylist. Her small, elite salon caters to a few high end clients. When she established her operation, she wanted to be located in an old, but recently renovated manufacturing building. It had high ceilings and yellow pine floors, lots of charm, and all the modern amenities. Nora found that the only available space was an upstairs loft, accessible by an outside stairway. She leased the space and settled in. Clients loved Nora's work with their hair, and they loved the setting. All went well until a client fell down the stairway and broke her back. The injured woman sued everyone--Nora, the building, the contractor who built the stairs and the manufacturer who supplied the materials. Nora had never incorporated her business, so she was personally liable--her home, her car, her savings were at risk. It took several years for Nora to extricate herself from the legal mess. Her salon is also now incorporated, a simple process that she handled in 15 minutes with her credit card over the phone with a firm she located online. Incorporating put a wall between her business and her personal assets. 

     Example: Bill runs a ceramics studio, turning out specialties he designs and makes. He concentrates on special glazes, fired in several kilns he installed. He also teaches small classes and takes on apprentices--this provides additional income. One morning Bill arrived to find the back door ajar and two of his kilns were gone. Overnight, thieves had broken into the place and made off with the two kilns and several pieces of pottery. Bill had no insurance to cover the loss, but he was lucky. The pottery, marked with Bill's signature, turned up on eBay, and the police found the thieves. Today, the kilns are back in Bill's studio, and he has insurance to cover any future losses that might occur. 

     Example: Judy is an attorney in private practice. She attracted an extensive client base. Then, the unthinkable happened. Her bank called. Her accounts had been wiped out. Judy suddenly had no funds of her own. Her identity had been stolen. It took her months to recover from the mess, and she was never able to recover any of the stolen funds. Today, Judy's identity is protected by an online firm that protects identities--credit cards, social security number, bank accounts, and more. 

     It can be easy to build walls to protect your business and your personal assets. Do it, or you are inviting disaster. 

     Building walls can mean many things--insurance, incorporating, video surveillance systems, identity theft protection, even a lock on the door.