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We hope you find this arcthve useful. A subscription to The Small Business Advisor Newsletter is free. Subscribe now - it's easy! The Small Business Advisor Newsletter for Feburary, 2003 ======================== ======================== It may be inconceivable to you that your home-based consulting service would have to comply with any of the numerous local, state and federal regulations, but in all likelihood it will. Avoid the temptation to ignore regulatory details. Doing so may avert some red tape in the short term, but could be an obstacle as your business grows. Taking the time to research the applicable regulations is as important as knowing your market. Below is a listing of the most common requirements that affect small businesses, but it is by no means exhaustive. Bear in mind that regulations vary by industry. If you're in the food service business, for example, you will have to deal with the health department.. Carefully investigate the regulations that affect your industry. Being out of compliance could leave you unprotected legally, lead to expensive penalties, and jeopardize your business. Business Licenses. There are many types of licenses. You need one to operate legally almost everywhere. If the business is located within an incorporated city limits, a license must be obtained from the city; if outside the city limits, then from the county. For more information contact the county or city office in your area. Certificate of Occupancy. If you are planning on occupying a new or used building for a new business, you may have to apply for a Certificate of Occupancy from a city or county zoning department. For more information contact the county or city office in your area. Business Organization. There are many forms of legal structure you may choose for your business. The most common structures are Sole Proprietorships, General and Limited Partnerships, C and S Corporations and Limited Liability Companies. Each legal structure offers organizational options which are appropriate for different personal situations and which affect tax and liability issues. We suggest you research each legal structure thoroughly and consult a tax accountant and/or attorney prior to making your decision. Fictitious Business Name. Businesses that use a name other than the owner's must register the fictitious name with the county as required by the Trade Name Registration Act. [Check with your local government offices] This does not apply to corporations doing business under their corporate name or to those practicing any profession under a partnership name. Protecting Your Idea. If applicable to your business, you may want to apply for trademarks, patents and your copyrights. Visit http://www.uspto.gov. Trademarks. Trademarks are names or symbols used in any commerce that is subject to regulation by state government or the U.S. Congress. Trademarks and service marks may be registered in a state for a term of ten years. For more information about Applications for Registration of Trademark or Service Mark visit: http://www.sba.gov/world/states.html Copyrights. Copyrights protect the thoughts and ideas of authors, composers and artists. A copyright prevents illegal copying of written matter, works of art or computer programs. In order to ensure copyright protection, the copyright owner should always include notices on all copies of the work. Business Insurance. Like home insurance, business insurance protects the contents of your business against fire, theft and other losses. Many small businesses must protect themselves from lawsuits and other situations for which they might be deemed liable. All businesses should research the advisability of appropriate liability insurance. Contact your insurance agent or broker. Sales Tax Number. In your state there is a percent sales and use tax which applies to the retail purchase, retail site, rental, storage, use or consumption of tangible personal property and certain services. In other words, sales tax must be collected on just about every tangible item sold. A sales tax number is required for each business before opening. The number, plus instructions for collection, reporting and remitting the money to the state on a monthly basis, can be obtained from: http://www.sba.gov/world/states.html Employees. All businesses with employees are required to comply with state and federal regulations regarding the protection of employees. For information on state labor laws, work force availability, prevailing wages, unemployment insurance, unionization, benefits packages and employment services visit: http://www.sba.gov/world/states.html Unemployment Insurance. Tax Businesses are required by the state to pay unemployment insurance tax if the company has one or more employees for 20 weeks in a calendar year, or it has paid gross wages of $1,500 or more in a calendar year. The taxes are payable at a rate of 2.7 percent on the first $8,500 in annual wages of an employee. For more detail visit, http://www.sba.gov/world/states.html Unemployment insurance must be reported and returns made to the state. Immigration Act. The Federal Immigration Reform and Control Act of 1986 requires all employers to verify the employment eligibility of new employees. The Immigration and Naturalization Service makes available a Handbook for Employers, which provides step-by-step instructions on how to complete the "Employer Eligibility Verification" Form I-9, which is required by law when hiring a new employee. To obtain a copy of the handbook and the form and for additional information visit: http://www.ins.usjog.fov/graphics/formsfee/form/I-9.htm Health and Safety. The Federal Occupational Safety and Health Administration (OSHA) outlines specific health and safety standards employers must provide for the protection of employees. Many states have similar standards. For information visit: http://www.osha-slc.gov/SmallBusiness/Safety.html Workers' Compensation. If a business employs three or more people, workers' compensation insurance must be carried to provide protection to those injured in on-the-job accidents. The State Board of Workers' Compensation aids people who need claim assistance. Minimum Wage. Virtually all business entities are subject to the federal minimum wage, overtime and Child labor laws. Information on these laws and other federal laws, may be obtained from U.S. Department of Labor Wage and Hour Division. Visit them at: http://www.dol.gov/dol/asp/public/programs/handbook/minwage.htm ======================== (This article is longer than I usually include in the newsletter but Azreila makes some important points about this topic!) The other day I witnessed "customer service 101: How NOT to deal with an angry customer. I was shopping in a store when the customer from hell bullied her way to the front of the line, screaming that she demanded to see a manager because she was sick and tired of waiting and she needed an answer NOW! This woman had steam coming out of her ears, and the girl behind the counter dealing with her looked to be the age of her granddaughter. This customer started spouting a story about how she had been mistreated the day previously and she had come back to seek justice. What do you think the girl said? I can't blame her, it was instinct. She said, "Sorry, ma'am, it's not my fault. I wasn't the girl you spoke to yesterday." Think that helped to calm the customer down? She wanted a solution to her perceived catastrophe. She didn't care if the person in front of her was directly responsible or not. She needed, more than anything, to be soothed. Eventually, the young girl buzzed her manager who skillfully handled the situation -- while those of us in line had an opportunity to watch! Within a few minutes, the customer was breathing again, and the situation was resolved to her satisfaction. Richard Whiteley, Boston author of "Customer Centered Growth," is an expert on handling angry customers. I consulted him for some basic guidelines, should you be faced with the customer who wish to run from. Whiteley teaches: "Over ninety percent of the time when confronted with an objection or complaint, a clerk or salesperson will muff it. This happens for several reasons: the salesperson sees it as a personal attack, is intimidated, doesn't have an instant solution to offer, or was never taught the attitude and skills to do it right in the first place. As a result the salesperson's typical behavior is: freeze -- the deer in the headlight syndrome, flee: 'I don't make em, pal, I just sell em!', or fight: 'Well if you'd read the instructions we wouldn't be having this little problem, would we?' "Any one of these responses is destined to increase, not ease, the customer's upset, often to the point of losing him/her as a customer or, even worse, turning him/her into a vengeance seeker who wants to get even with your company. So how do you turn a disgruntled complainer into a loyal and happy customer? Whiteley offers five steps that are all superior to what I witnessed yesterday: "It's not my problem!" "ENCOURAGE: This is counter intuitive. Why would you want to pour oil on a fire that is already blazing away? Encouraging is sending a signal to the customer that you are on her side. View the problem through her eyes so that you can then work with her to create a reasonable solution. Try a short phrase like, 'I see this is very important to you' or 'It must have been frustrating for you to have to return this item for the third time.' "QUESTION: Now you want to do a little detective work. What is really behind the complaint? It is dangerous to assume you know the answer because if you are wrong you end up answering the wrong concern and waste both your customer's and your time. For example, if the complaint is that the product is overpriced, ask: 'What aspect of our pricing is most disturbing to you?' "SUMMARIZE: Summarize what you have heard to demonstrate you have listened and therefore earned the right to respond with a solution. Allow the customer to add new thoughts that might not have been expressed initially or to correct any misconception you may have had. This gets you and your customer agreeing just before you offer your solution For example: 'Then if I understand you correctly, the issue is. . . ' "PROVIDE your solution. (Only after doing the first three steps first!) "CHECK to insure that your solution will work for the customer. If it doesn't, then the objection is still alive and you need top loop back to step #2. Example: 'How does this sound to you?' The next time you see a steaming volcano of disgruntlement banging his or her hand on your counter and demanding justice, fight the urge to run or fight. It's not as personal as it feels. You are looking at an opportunity in disguise, if you can slide your ego out of the way. Return to top of page - Back to Home Page - Back to Archive Index |