Monday, March 31, 2008

Network, Network, Network!

Networking is very important if you want to stay alive in business.

Big and Small businesses network all the time and everywhere, networking occurs during breakfast, lunch and dinner. It happens during the cocktail hour, the PTA meeting, and on the golf course, it even happens online! professional sites such as Linkedin or ZoomInfo creates a place to meet other professionals 24 Hours a day!

Well, here is an opportunity to meet a lot of business people under one roof:

Speed Networking on Wednesday, May 21st, 2008 at the Franklin Templeton campus in San Mateo Ca.

The registration is only $10.00 (If you were to meet 50 people that night, it would only cost you $0.20 per person! you can beat that price).

You may register online at

If you would like more information please contact Ed Banayat at the San Mateo Chamber of Commerce at 650-401-2440

Good Luck Networking!!! Don't forget your business cards!

Saturday, March 22, 2008

Marketing and The Marketing Plan

Marketing is a very important function of business, but many people and business owners seem to misunderstand what marketing is. The academic definition of marketing is "A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others. " Let's take this definition and begin to define some basic marketing terms.

Need: A state of felt deprivation.

Want: The form taken by a human need as shaped by culture and individual personality.

Demands: Human wants that are backed by buying power.

Product: Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organizations, and ideas.

Service: Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Customer Value: The difference between the values the customer gains from owning and using a product and the costs of obtaining the product.

Customer Satisfaction: The extend to which a product's perceived performance matches a buyer's expectations. If the product's performance falls short of expectations, the buyer is dissatisfied. If performance matches or exceeds expectations, the buyer is satisfied or delighted.

Exchange: The act of obtaining a desired object from someone by offering something in return.

Transaction: A trade between two parties that involves at least two things of value, agreed upon conditions, a time of agreement, and a place of agreement.

Relationship Marketing: The process of creating, maintaining, and enhancing strong, value laden relationships with customers and other stakeholders.

Demography: The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Psychographic segmentation: Dividing a market into different groups based on social class, lifestyle, or personality characteristics.

So far we can see that Marketing has to do a lot with people and YOU as the business owner need to connect your products or services to these potential clients. There are several potential channels to connect buyers to the products and services. You can use Advertising(radio, TV, Internet), you can create Blogs, you can connect them using Public Relations and/or many other ways, but before you decide to spend money in order to attract these customers you need to understand YOUR MARKET. Who is your client? define your client so that you can better understand what he/she does, how they shop and why they shop.

There are three important components to marketing: Research, Analysis & Strategies and Tactics.

Research: You will need to spend a significant amount of time researching about your business. Study the industry, study your future customer, your competition and the area where you want to do business.

Analysis: After you have completed the research, you need to analyze it, does your research show that there is a market for your product or service? Who will be your customers? How much do you need to invest in your business to begin operations? how long will it take for you to break even and how long will it take to become profitable? How many competitors will be going against you? Analyze your research about the industry, customer, competition and location. Analyze your competitive advantage. At this point you may find that maybe your business will not be viable or you can find that it will be a very good business.

Strategies and Tactics: Determine the best method of getting your product or service to your clients, based on your analysis. Within these section you want to answer three main points: What are your objectives? What is (are) your strategy(ies)? What tactics will you use?

Objectives: these are the actions that will support your business's goals within your market.

Strategies: These are the plans for achieving your objectives. Think of the big picture for your business. Ex: going after a segment of the population within an age group, income group, etc.

Tactics: are the actions dictated by your strategies.

Contents of the Marketing Plan

Three areas that you want to focus are: Product, Market Analysis and T.O.S.(Tactics, Objectives & Strategies)

Product Description

Features and benefits (what makes it different or better?) My advice is to focus on the benefits. People buy based on benefits.

Design and material choices

Life cycle and seasonality

Market Analysis

How big is your target market?

Who are your customers? (Demographics and psychographics)

Who are your competitors? What are their strengths and weaknesses?

What are the political, economic, social and technological trends in your market?

Marketing Objectives, Strategies & Tactics

What are your business's objectives? How will you achieve them?

What is your business niche? (In today's economy the more specialize your business is the more successful you will be).

Sales Forecasting Methods
In business if you do not bring in the sales which turns to revenue and then into profits, your business will not last long. It is for this reason that Sales Forecasting is very important, but when doing the sales forecasting you need to keep it achievable and realistic. If you set unrealistic goals you may get discourage and your business will suffer. The sales forecasts predicts how much of your product you will sell over a specific period of time (per week, per month, quarter, yearly, etc.). It will also show when you will breakeven and when you will become profitable.

There are three Sales Forecasting Methods:

Breakdown Forecasting: Start with the largest population and break it down to estimate sales from target customers.

Buildup Forecasting: Estimate the size of each market segment, and add them to get a total.

Indirect Forecasting: Find possible indicators of sales when specific market data are missing.

Where to find the information?

Information comes from two types of sources: Primary and Secondary Sources. The Primary information comes from primary data such as: surveys, interviewing people: face to face, by phone, via email, regular mail, etc and conducting focus groups, these are a few of the different methods use by other companies to gather information from primary sources, some of these companies that do a great job are: Procter and Gamble and 3M Corporation Obtaining primary information is very expensive and time consuming so most mid size companies or small businesses will focus on Secondary information because most of this information is widely available and most of it is FREE.

Secondary Information: This information has been published by other companies, experts, trade associations, etc. The library and the Internet can both provide you with lots of secondary information. Once you find the information, you will need to analyze it and decide on the information.

Here are some sources where you can find Secondary Data

Government (Federal, State, Local)

Small Business Development Centers

Women's Business Centers

U.S. Small Business Administration

Trade and industry associations

Chambers of Commerce

Local newspapers and magazines

Census data

Business Magazines

Libraries (Public, University/College, Private)


Business Periodicals

Professional Research Companies

Studying the Competition

Analyzing Your Research

Now that you have spent HOURS doing your research and you have the information you were looking for, it is time to analyze it. Before you make a conclusion, check your findings for accuracy and completeness. Be objective when analyzing the information, have someone else review the information with you. Some of the questions you may ask are:

How has the industry developed?

How do small businesses operate within this industry?

what are the current growth patterns in the industry?

What is the industry's size at present? What's projected a year from now? Five years from now?

Are there any niche markets that are hot?

How does international trade affect your industry?

How will current and new government regulations affect your industry?

How will technology affect your industry and the small businesses within it?

Friday, March 21, 2008

Where Do Business Ideas Come From & Is Your Idea Viable?

Business Idea

Sometimes we wonder how do people come up with a business idea or an invention.
According to the National Federation of Independent Businesses:

43% is from a Prior Job
18% from Hobby or Personal Interest
10% from Chance Event
8% from Someone who Suggested it
6% from Education/Courses
6% from Family Business
5% from Activities of Friends/Relatives
5% Other

What Can Make Your Business Unique?
  1. Features
  2. Your location
  3. Offer things that cannot be found elsewhere
  4. New invention
  5. Use of materials (Green, Recycled, Made in the USA)
  6. Pricing, guarantees
  7. Customer service policies
  8. Unique packaging
  9. Individual artistry
  10. Add-ons or extra that come with a purchase
  11. Your experience
  12. Delivery policies/Time frames

Who Are Your Customers?

  1. Gender
  2. Age or Age range
  3. Income Level
  4. Education level
  5. Residence location
  6. Employment/Job location
  7. Worker type (professional, hourly, etc
  8. Marital Status (married, single, widowed)
  9. With or without children
  10. Renter or home owner
  11. Lifestyles/interests (sports, arts, pets, etc..)
  12. Level of familiarity with your service
  13. Beliefs/Opinions
  14. Specifics to your business

What Do You Need To Know?

  1. Who?
  2. What?
  3. Where?
  4. When?
  5. Why?
  6. How?

Start The Research Process

Preparation, Preparation, Preparation.

Before you begin your business you need to do research and the more you do, the more you will be prepared to begin the business or to decide that perhaps your idea was not going to be viable. Here is what you need to learn about your business:

  1. Your niche
  2. The need for your product
  3. Customer identification
  4. Competition
  5. Location
  6. Pricing
  7. Costs/financing information
  8. Regulations, licensing, certification

Where to Begin?

There is plenty of FREE information available to you. DO NOT rush into paying someone high fees for something that you can get at no cost. Exhaust all your FREE resources before you decide to hire professional help. I recommend interviewing at least three experts and then making a decision.

Accessing Business Resources

  1. Public Library
  2. Trade Associations
  3. Published Reports and Articles
  4. Studying the Competition
  5. Talking with Customers
  6. Suppliers/Vendors
  7. Local Economic Development or Business Resources
  8. Banks
  9. Internet
  10. Small Business Administration

Here is a tip: Check with your knowledgeable banker. You may ask why? Well, if you want to consult an Attorney or a CPA, they will charge you for their time, however, if you check with your banker, the banker will not charge you for the information provided. The banker will guide you to the FREE resources first and then will recommend you to an expert.

Also check with local librarian... they are a great source of information & FREE of charge.

Is Your Business Idea Viable?

  1. Work in your industry on a part-time basis
  2. Get a business mentor and learn from him or her
  3. Volunteer for a small business owner to learn day to day operations
  4. If you have a product, test it at a trade show, community fair, or block party
  5. Call sales reps that supply your industry
  6. Talk with local Realtors, business owners, bankers, elected officials, etc.
  7. Research the competition - start with the phone book
  8. Contact local economic development and/or government agencies

The above information: was Prepared by NxLevel Guide for Micro-Entrepreneurs. I use the above information in my lectures and I teach through A New America Community Corporation

Thursday, March 20, 2008


Networking is VERY important, if you do it correctly most if not all of your sells will come from referrals. This is better than cold calling, however, it takes work to gain the trust of your referrals, below are a few tips. Remember, networking is BUILDING RELATIONSHIPS.


  1. Have a purpose for networking.
  2. Have a confident handshake.
  3. Be aware of your body language
  4. Wear something unusual to spur conversation (unique pin, watch, tie, etc)
  5. Always carry your business cards with you. (you will be surprised how many people don't)
  6. Be able to talk about more than just the weather.
  7. At a networking event, don't try to juggle food and drinks.
  8. Follow through on promises you make
  9. Set up a system to keep in touch with your network
  10. If you're not comfortable networking, learn from a pro.

The above information: was Prepared by NxLevel Guide for Micro-Entrepreneurs. I use the above information in my lectures and I teach through A New America Community Corporation

You want to become a business owner? Read on...

Traits of Successful Entrepreneurs

  1. Passion
  2. Persistence
  3. Good Health, High Energy
  4. Communication and Listening Skills
  5. Creativity
  6. Self-Confidence
  7. Willingness to Work Hard

Personal Assessment

  1. Why do you want to start a business?
  2. What Special skills, experience, and knowledge do you have?
  3. How's your personal financial health?
  4. Do you have a mentor or advisor? Can you get one?

The Risks of Entrepreneurship

  1. Failure: Can you bear the emotional and financial risk of failure?
  2. Long Hours: 60 to 70 hours per week is normal
  3. Family Strain: Potential strain on relationships because of long hours
  4. No Regular Paycheck: How will you support yourself and your family?
  5. No Health Benefits: No employer provided health coverage
  6. Isolation: You'll be working by yourself much of the time
  7. Debt: you may have to take o additional debt.
  8. Responsibility: Everything may rest on your shoulders
  9. Stress: New emotional, financial, and physical pressures.

The Rewards of Entrepreneurship

  1. Success: You'll be able to support yourself, and hire others!
  2. Independence: You get to be your own boss
  3. Learning: No matter what happens, you'll have valuable new skills and knowledge
  4. Self-Respect: Few things are as rewarding as succeeding through your own talent and hard work.
  5. Recognition: It's always nice to be noticed... and it can lead to new opportunities, too!
  6. Family Benefits: You'll have something special to leave your children.
  7. FUN: You can make money doing something you really enjoy!

Why do Businesses FAIL?

The top two reasons are Poor management and Poor cash flow.

  1. Poor management
  2. Poor cash flow management
  3. Don't listen to customers
  4. No Business plan
  5. Don't set prices appropriately
  6. Don't ask for help.

Why Do Businesses Succeed?

  1. Careful planning
  2. Clear focus and purpose
  3. Offer a unique product
  4. Understand customers' needs
  5. Sell at the right price
  6. Seek and follow expert advice
  7. Get help when necessary
  8. Understand industry and competition
  9. Do regular bookkeeping
  10. Know how to keep existing customers, and get new ones.
  11. Understand cash flow management.

The above information: was Prepared by NxLevel Guide for Micro-Entrepreneurs. I use the above information in my lectures and I teach through A New America Community Corporation

What You should know about Credit

  1. It's good to establish a credit history
  2. Each time you purchase something on credit, or apply for credit, it's reported to a national credit bureau
  3. National credit bureaus track your credit and payment history
  4. if you apply for credit, a credit report is generated based upon your name and Social Security Number
  5. A "Credit Score" "FICO" is a rating assigned to you based upon your credit and payment history, and is used by creditors or lenders to make decisions about your application.
  6. You can and should obtain a copy of your credit report.
  7. Your personal credit will affect your ability to get credit for a start-up business.

How to protect YOUR credit

  1. Obtain a consumer copy of your credit report (small fee or free)
  2. Clear up any disputes on your credit report. Do it in writing (you can do it yourself for FREE)
  3. Do not carry too many credit cards
  4. Protect your Social Security Number, do not give it out haphazardly.
  5. Don't apply for credit too often; it will count against you.
  6. Don't give your credit card number to telemarketers you're not familiar with
  7. Be aware of hidden costs at check-cashing or rent-to-own establishments.

Ideas for Dealing with Bad Credit

  1. Develop a budget and stick to it.
  2. Obtain a consumer copy of your credit report (Free or a small fee)
  3. If you find an error on your report, contact the credit bureau(s) in writing.
  4. If you are denied credit, find out why
  5. Contact creditors to make arrangements to pay back old debt.
  6. Do not ignore student loans, utility bills or delinquent taxes-- PAY THEM!!!
  7. Do not apply for more credit
  8. Do not incur more debt
  9. Keep only one or two credit cards; destroy others and close the accounts.
  10. Work with a reputable credit counseling or debt management service.
  11. Be wary of quick advertisements to repair credit--there are no easy cures. (These are scams)
  12. Do not automatically file bankruptcy; it can be more damaging in the long run.


Trans Union Corporation 1-800-916-8800

Experian 1-800-682-7654

Equifax 1-800-685-1111

Also contact your local



The above information: was Prepared by NxLevel Guide for Micro-Entrepreneurs. I use the above information in my lectures and I teach through A New America Community Corporation

Wednesday, March 12, 2008

Business Law Basics

I am not an attorney, this is not legal advice. This information can be found in any Business Law Textbook.

How should I organize my business?

Think about:

  • Liability
  • Ownership
  • Taxes
  • Filing requirements, fees and other formalities

Types of legal entities

  • Sole Proprietorship
  • Partnership: General or Limited
  • Corporation: C Corporation or S Corporation
  • Limited Liability Company

Sole Proprietorship

What is it?

  • One owner
  • Owner and business are the same
  • You ARE your business
  • No separate entity


  • Simple, easy. Profits taxed as personal income on income tax returns.
  • No formal requirements to form or conduct business (easy to establish)
  • Need a Sales & Use Permit (Seller's permit)
  • File a Fictitious Business Name Statement with the county if your business has its own name.
  • Need a business license


  • Unlimited liability: WARNING!
  • Community (marital) property is also at risk (Cal. Family code SS 910)
  • Protect yourself with insurance
  • No tax advantages: business profits taxed as your own income

General Partnership

What is it?

  • At least two owners
  • WARNING: unlimited liability. Each partner is responsible for the debts and obligations of the business (partners: protect yourselves with insurance)
  • Partnership does not pay federal income tax
  • Each individual partner files returns
  • Most flexibility in allocating profits and losses (cash paying partner can deduct all the losses)

No formal requirements

Partnership agreement

  • can create agreement for the most part how you want it, but if you don't default partnership laws will apply.
  • Determines and outlines responsibilities between the partners.

Limited Partnership

  • Similar to General Partnership, at least two owners
  • Must have one general partner and one limited partner. Can have multiple limited partners.


  • General partner has unlimited liability
  • Limited partner's liability limited to that partner's contribution
  • Limited partner CANNOT participate in control of partnership without losing shield from liability (Cal. Corp. Code SS 15632)

Filing Requirements:

  • Must file Certificate of Limited Partnership with the California Secretary of State
  • Initial $70 filing fee (Cal. Govt. Code SS12188(b): $800 minimum franchise tax, payable to Secretary of State, due at time Limited Partnership files its information return.
  • Must have a limited partnership agreement.
  • Name must end with "Limited Partnership" or "L.P."

Registered Limited Liability Partnership (LLP)

  • Generally available only for architecture, accounting, and legal services businesses (Cal. Corp. Code SS16101(8))
  • Two or more partners
  • A partner in a registered limited liability partnership does not have unlimited liability. (Cal. Corp. Code SS16306(c))
  • Flow through taxation of income
  • Filing fee: $70, payable to California Secretary of State (Cal. Govt. Code SS12189(a))

Corporation (General)

  • No partners, it's a separate legal entity.
  • More formal - state filings, meetings, minutes
  • Liability limited to the corporation's assets, individual owners generally NOT personally liable.

Ownership and Management

Owned by shareholders

  • One or more shareholders
  • No limit on number of shareholders
  • Managed by board of directors (one or more directors)
  • Directors generally elected by shareholders
  • Ordinary operations performed by officers (one person can hold multiple positions)

Must file Articles of Incorporation with the Secretary of State

  • $100 filing fee to CA Secretary of State for filing articles of incorporation (Cal. Govt. Code SS12186 (c))
  • First tax year --pay tax rate on taxable income to CA Franchise Tax Board (currently 8.84%)
  • Next tax year and thereafter -- pay tax rate on taxable income or minimum $800 tax, whichever is more, to CA Franchise Tax Board

Must qualify in other states where it does business

Formalities: separate bank accounts, meeting minutes, etc.

Corporate Taxation C Corporation

Taxed as a separate entity

Tax based upon corporation's net income

Profits distributed to its owners - Two levels of tax:

  • Corporation taxed on income
  • Then employees taxed on compensation and shareholders taxed on dividends

S Corporation

What is it?

  • No Federal income tax -- single tax level
  • Owners (shareholders) pay taxed individually on the profits when earned ("flow-through" taxation)
  • Owners (shareholders) can also deduct losses on their personal income tax returns
  • Still pay state taxes -- currently 1.5% for S corporations.


  • Generally limited to 100 shareholders
  • Corporation, partnership or trust cannot own shares
  • Shareholders cannot be nonresident aliens (for tax purposes)
  • Cannot have more than once class of stock

Additional filing requirement with the Internal Revenue Service (must file IRS Form 2553) and with the CA Franchise Tax Board

Close Corporation

What is it?

  • One or more shareholders, no more than 35
  • Similar to general corporation, but shareholders may have more control if they wish
  • May be structured more like a partnership
  • Taxation may be as an S Corporation or a C Corporation
  • Limited liability, but if shareholders take on more control, they may face greater liability

Limited Liability Company (LLC)

What is it?

  • No partners, separate legal entity
  • May not engage in banking, insurance, or trust company business
  • Owners are called members (may be just one); they may have full or limited management rights
  • Fewer formalities to follow than a corporation and more flexible management structure(may be managed by one or more members or managers)
  • No limit on the number or types of members (for example, a corporation, another LLC or a natural person may be a member)
  • Liability generally limited to the LLC's assets (i.e., the individual owners are not personally liable)
  • Exceptions: LLC's owners may be held personally liable for certain actions, including:
  • Personally and directly injuring someone
  • Personally guaranteeing a loan or debt on which the LLC defaults
  • Intentionally doing something fraudulent, illegal, or reckless that causes harm to the LLC or someone else
  • Treating the LLC as an extension of himself, herself or itself, rather than a separate legal entity.


An LLC is typically taxed as a partnership if it has more than one owner; if so, it will not pay federal income tax as a result of flow through tax treatment. If the LLC has only one owner and no election has been made to treat it as a corporation, the owner will be treated as earning the income directly and the LLC will be disregarded for federal income tax purposes

Each individual member files tax returns reporting items of income and loss that "flow through" to each member

Maximum flexibility for allocating profits and losses (i.e. there's no requirement that profits and losses be divided according to the percentage of ownership). For example, the cash paying member can deduct all the losses

Must file Articles of Organization with the Secretary of State

  • Initial $70 filing fee (Cal. Govt Code 12190(b))
  • $800 annual tax due to CA Franchise Tax Board
  • First year tax of $800 payable within first 3 months of organization
  • Also subject to an annual fee to CA Franchise Tax Board based on LLC's gross income

Formalities: Must have an Operating or LLC Agreement and maintain separate bank accounts; however, no board meetings or minutes are required

Key Factors in Selecting Your Entity

  • Liability
  • Taxes
  • Filing requirements, fees, and formalities


Licenses and Permits

Obtain a business license

Federal, State, county or city permits and licenses may be required

  • Requirements vary by business type and activities
  • Varies from place to place
  • Considerations include location of business and state of organization

Small Business Insurance

Property Insurance

  • Fixtures, equipment, furniture, computers, inventory, etc.
  • Various levels of coverage (basic, theft, replacement value)

Liability Insurance

  • Damages due to injuries to others (for example, slip and fall accident)
  • Automobile liability (business use)
  • Does NOT protect against regular business debts

Home Based Business

  • Check with your homeowner's or renter's insurer
  • Additional coverage may be required
  • Rented or leased space: Check lease for insurance requirements

Choosing a Name

Reserve name with Secretary of State before you file Articles of Incorporation

Secretary of State will reject a name that is:

  • Confusingly similar to another corporation, LLC or partnership or
  • Same as another name already on file

File Fictitious Business Name statement with the county if a Sole Proprietorship

Check statutory requirements for a name

  • In California, name of corporation must include "corporation," "incorporated," "limited," or an abbreviation of one of these words

Check other states if plan to operate the business outside the state

Avoid trademark infringement

Becoming an Employer

When do you become an employer?

A business becomes an employer when it pays wages in excess of $100 in a calendar quarter to one or more employees

Registration as employer:

Within 15 days of becoming an employer, you must register with the Employment Development Department (EDD)

Report new employee(s)

All employees who are newly hired must be reported to EDD within 20 days of the employee's start of work date

Report independent contractors.

Independent contractor information must be reported within 20 days of paying an independent contractor $600 or more, entering into a contract with an independent contractor for $600 or more, whichever is earlier.

Obtain an Employer Identification Number (EIN)

Federal tax identification number used to identify employers. All employers with at least one employee must obtain an EIN.

Required disclosure to employees

Provide your employees with pamphlets on employee withholdings and Unemployment Insurance (UI), State Disability Insurance (SDI), and Paid Family Leave Insurance (PFL)

Required employee notices.

You must post an employee notice with UI, SDI, and Paid Family Leave claim and benefit information. This notice should be posted in a prominent location where it is easily seen by your employees. The appropriate notice will be sent to you after your register.

Worker's Compensation Insurance

State mandated insurance system which ensures that employees who suffer work related illnesses or injuries receive compensation


  • All employers with at least one employee must obtain workers' compensation insurance

Employment Issues

Statutory Discrimination

  • Federal, State, and local laws prohibit discrimination based on a number of characteristics, including race, religion, national origin, ancestry, physical/mental disability, medical condition, marital status, sex, age, sexual orientation
  • Sex discrimination includes sexual harassment

Avoiding Discrimination

Application for employment

  • Avoid non job related inquiries that express, directly or indirectly, any limit or discrimination regarding protected characteristics

Employee Handbook

  • Compile policies, procedures and other important information, including policies to prevent harassment and discrimination, method for complaining of and remedying harassment and discrimination

Take Immediate Remedial Action

Handling termination

  • Don't fire someone based upon protected characteristics
  • Retain records relating to performance in personnel file

Disability Laws

Prohibit discrimination against qualified employees with disabilities

  • Employer must make "reasonable accommodations" to enable disabled employees to perform essential job functions
  • Employer must engage in "interactive process" with employee to identify a reasonable accommodation

Employment Contracts

  • Not necessary--default is at will employment
  • Offer letter for full time employees:
  • "At will" language important; avoid representations that might be construed as assurances of continued employment

Wage and Hour Laws

In general:

  • California Minimum Wage 1/08 = $8.00
  • San Francisco Minimum Wage 1/08 = $9.36

Overtime =

  • 1.5x regular pay for
  • hours worked in excess of 8 hours up to and including 12 hours
  • first 8 hours worked on the seventh consecutive day in any week
  • hours in excess of 40 in one week
  • 2x regular pay for hours in excess of 12 in one day or in excess of 8 on the seventh consecutive day in any week.

Industrial Welfare Commission promulgates wage orders setting minimum wage, hours and overtime standards for many industries

Immigration issues for the Employer

  • Employer must file I-9 for all employees
  • Employer cannot ask job applicant if he/she is a U.S. Citizen or has a green card, but may ask if he/she has legal right to work in the United States
  • Employer must verify employment authorization by completing Employment Eligibility Verification form I-9 for all employees within 3 days of commencement of employment
  • Only documents listed on I-9 may be used to verify employment, and employer may not specify which documents on the I-9 the employee should present
  • If employee's work authorization has expiration date, employer must update I-9 when authorization expires

Significant penalties to employers for:

  • Improperly completing I-9
  • Knowingly employing persons without work authorization
  • Favoring U.S. Citizens over Permanent Residents and other persons with legal right to work in the United States
  • Many questions regarding I-9 completion are answered at USCIS (U.S. Citizens and Immigration Services) website:

Independent Contractors

  • Not subject to wage and hour laws, workers' compensation, unemployment insurance, or I-9 filing requirement

Independent contractor (IC) vs. employee:

  • Who controls methods and means of performing the job?
  • Are hours fixed?
  • Does the employer manage the individual?
  • Paid based upon hours or by project?
  • Bring own equipment or use employer's?

Significant penalties for misclassifying employees as ICs


CA Employment Development Department:

CA Department of Industrial Relations:

US Citizenship and Immigration Services:

US Equal Employment Opportunity Commission:

Intellectual Property

Trademark: A trademark identifies the SOURCE or ORIGIN of goods and service


How do I establish trademark rights?

  • Use the Mark ("TM")
  • Use the mark may only provide LOCAL protection

Register THE MARK ("R")

  • Federal registration provides NATIONWIDE protection
  • Worldwide protection is possible

How do I register my mark?

Perform a Trademark Search

Complete the Federal Trademark Application Form


Copyright protects original works of authorship fixed in a tangible medium of expression.

  • Books
  • Music
  • Paintigs
  • Movies
  • Photographs

Copyright laws grant the creator the exclusive right to:

  • Reproduce the work
  • Distribute the work
  • Display the work

How do I get a copyright?

Your work is protected as soon as it is fixed in a tangible form.

  • You write it donw
  • You paint it
  • You take the picture

Generally, a copyright lasts for the life of the author plus 70 years

Do I need to register my copyright?

  • Your work is protected as soon as it is fixed in a tangible form -- so, no
  • You can give notice your copyright: Copyright symbol, Dates by author/owner
  • You can register a copyright:
  • Complete an application form
  • $30.00


A patent grants a person the right to prevent others from making, using, or selling the patented invention

Two main types of patents:

  • Utility Patent
  • Design Patent

Utility Patent

  • Patent on the invention or discovery of any machine, method, process, or composition that is new and useful
  • New and useful improvements also patentable
  • Term 20 years from patent filing date

Design Patent

  • Patent on the unique appearance (new, original, and ornamental design) of an item (e.g., furniture or jewelry)
  • Term 14 years from grant of patent

How do I patent my idea?


Utility Patent

  • Filing Fee + Search Fee + Examination Fee + Issue Fee (Approximately $2,400)

Maintenance Fees:

  • Due at 3.5 Years = $900
  • Due at 7.5 Years = $2,300
  • Due at 11.5 Years = $3,800
  • 50% Reduction in fees for certain independent investors, small businesses, or nonprofits

Design Patent

  • Filing Fee + Search Fee + Examination Fee + Issue Fee (Approximately $1,230)
  • No maintenance fees for design patents
  • 50% reduction in fees for certain independent investors, small businesses, or nonprofits

Real Estate Issues

Zoning Laws

  • Operating business out of one's home
  • Find out zoning plan from county clerk's office
  • Look around
  • Make sure in compliance or seek a variance


  • All Terms are negotiable
  • Important terms as a tenant:
  • Hazardous waste representation from the landlord
  • Ability to assign and sublet the premises

Important terms as a tenant

  • Rights to expand the area leased
  • Option to extend the duration of the lease
  • Negotiate specific needs of business into the lease


  • Make sure landlord has given written consent
  • Get copy of master lease and sublets agreement

Other Resources

Legal Services for Entrepreneurs (LSE) and the Lawyers' Committee for Civil Rights of the SF Bay 415-543-9444 (popular small business legal guide, also available in book form

ABA Legal Guide for Small Business (available at most major bookstores)

Tuesday, March 11, 2008

Do small businesses need a business plan? And how long should it be?

Yes. Businesses should have a business plan, regardless of their size; the reality is the majority of the businesses don’t have them. Why? Several reasons: procrastination, business owners don’t want to write a long plan and/or plain laziness.

Writing a business plan does not have to be complicated or long. I came across a recent article in The Wall Street Journal by Kelly Spors titled The 100 page Start-Up Plan – Don’t Bother

I agree with the article, as a business banker I believe a business plan is like a map or a GPS system, design to guide you and keep you focus on your goals but it should not be over 20 pages long. It should be concise and focus on your objectives and goals.

Here is a quick outline:

Mission Statement

Summary of the Business

Legal Description

Competitive Edge


Marketing: the industry at large, potential customers, benefits of your product or service, geography of your business, distribution, advertising, public relations, pricing: sales and credit policies.

Operations: Accounting, Employees, Compensations, Vendors


Financial Management Plan: P&L, Balance Sheet, Cash flow projections

A business banker, investment banker or any investor always want to know how soon they will get their money back plus interest. To quote the above article:

“Mr. Kawasaki recommends addressing three key questions: Who is going to make it? How are we going to sell it? How are we going to service it?”

If you like to contact Kelly K Spors the writer of the article you can email her at

If you need guidance on how to write a business plan check out Small Business for Dummies by Tyson Schell a great reference book.

You can also find great information and most of it FREE by searching on the web. But beware of companies or individuals charging exorbitant prices to write a business plan. It is not worth it.

Friday, March 7, 2008

Are you a business owner looking for a bank?

Banking is about building relationships and building a trust between clients and bankers.
So here are a few tips when you are looking to establish a new relationship with a bank.

Ask a friend or a colleague where he or she is banking, ask how the service is and ask for the banker’s name. If your friend/colleague keeps talking about the bank, service and banker for more than two minutes then this is a very good start.

Is the bank flexible? Perhaps the bank that you’ll choose does not have many offices (branches) but the bank offers remote deposit, bank by mail, real time online banking, and courier services. These products can be at no cost to you if you have your account as an analysis account. (Educate yourself and understand how Earn Credits work, the rate varies from bank to bank)

Are you a BIG FISH or a little fish? EVERYONE can be a BIG FISH; you just need to choose the right size bank for you. If you have a business with balances over $1MM in a checking account you will be a big fish in any bank. However, if your business is small and you are not able to keep such high balances then a smaller institution will fit you better. A smaller institution will get to know you and your business, they will give you personalized service that may not be found at bigger institutions.

Personalized service vs. Transactional service
Choose a bank the values personalized service, it will be better for you in the long run. The more accounts you have with the bank, the more your banker will know you, and it will be very favorable when you request a loan.

Interview your banker. You want to choose a banker that is an expert in his/her niche and very resourceful because he/she will be the advocate for your business. You want a banker that does not “beat around the bush” you want your banker to be fast and direct, after all you are in business to make money not to waste time.

For great personalized service check out:

Affinity Bank

First Republic Bank