Protect yourself against bad people and products

Owning a business should not be a  horror story used to give future grandchildren nightmares.  Put the cell phone down, unless you’re using it to read this, and take notes as people tell their victim story.  Why they, with the clouds parting and the angels gazing at them with awe, were not able to become the next Donald Trump.    Most have to experience failure before learning how to succeed.  Learn from other peoples failures, and the same education can be achieved with a smaller investment, and a higher return.

 

Lesson #1, always use protection.  No, not the archaic prophylactic hiding in your wallet or purse since before the time of the internet.  Not an imaginary sword for the monsters in the closet.   Strangely, this does not even apply to secret agents protecting against hidden assassins trained by an exotic ninja clan.  But it does refer to:

  • Partners
  • Employees
  • Customers
  • Malicious People
  • Product Defects
  • Natural Disasters
  • Law Enforcement (yes, but read first and judge second)

It doesn’t matter how many times your partner, supplier or customer tell you it’s okay.  Know your exposure and know it well.  Exposure in this article is defined as the amount of risk you or your company are exposed to.  Marketing and analytics are referenced in other articles, but here we need to evaluate where the bad people are coming from, and how they’re going to hit us.

When working with partners, always have a clearly outlined contract detailing obligations, responsibilities and equity. People on a bank account will likely not be prosecuted when withdrawing from an account they have legal access.  Even with invoices and financial history, the burden of the proving the money they took is not theirs may not be possible.  He said, she said, is not a game to play when bills are due, and vendors want their money.

 

Some of us have lived the horror stories people hear of employees feeling entitled to money in the register.  Proper surveillance of your retirement is not a luxury.  Expensive camera systems may be outside of the current budget, but a $20 webcam and an old computer someone threw out last week is not.

Listen to the chronic talker most people roll their eyes at.  The annoying neighbor sweeping a public side walk looking for  people to talk to will see things most will miss.  Call in for an update if you’re out of the office, just to hear the tone of someone’s voice.  The rules are easy to bend, cameras are easy to avoid, some specialize in lying, but an observant business owner will be able to tell if something is not right.  Listen to the voice telling you something is wrong, but do not listen to a fear something could be wrong.

 

Inventory updates and reviewing financial transactions help identify a little loss instead of waiting for the financially crippling disaster to alert you of a problem.  Watch employees!  There should never be a feeling of a lack of trust, but observing little shifts in their behavior will let you know if they are unhappy or feeling taken advantage of them.

 

Not all customers are bad!  If all of your customers are out to get you, unless you are involved in a criminal organization or activity, you should probably change your marketing focus.  Provide an environment focused on attracting good people, but have a strategy for the following items:

  • Credit card chargebacks
  • Inventory that can be easily taken
  • Cash Registers or money hidden from camera view
  • Lawsuits – Lawsuits – Lawsuits!!!

Get some friends together on a Saturday, bring a few cases of your favorite intoxicating beverage or iced tea, and brainstorm over how to steal from yourself.  Identify every way possible to be bad and not get caught.  After Sobering up, develop a strategy to counter each angle.  Two things will happen:

  • You will have a great time
  • It will shock you at how devious you and the people you associate with can be

It is so Important, it must be repeated.  Identify all the ways you are exposed and develop an identification and/or counter strategy!!!  Malicious people posing as customers, friends, business associates, and sandwich delivery people are looking for any chance to take what they assume you have, or can raise through insurance.

 

LAWSUIT-LAWSUIT-LAWSUIT.  A limited liability corporation can protect personal assets.  There are different forms of limited liability corporations, Section C, Section S, etc.  Learn each type and decide which one fits your needs as well as your budget.  Unless there is proof of fraud, or other extenuating factors your corporation will protect you.  Your personal assets can sleep safe at night and not worry about malicious people or defective products trying taking your retirement home.  Learn the rules of the corporate game and play smarter than the people laying the challenge.

 

The best advice I have ever been lucky enough to receive came from the e-myth revisited by Michael Gerber.  Mr. Gerber, please excuse my summary.  Build a system, not a job.  Develop a self contained unit that can run itself without you or any key employee.  Create a training system to easily allow people to take any position or vital role with the minimal qualifications or education.  Outside of that wonderful masterpiece of knowledge, if possible, keep products in different locations, or have resources to acquire more incase of the worst.  Any vital part of your business, build a backup, then build a backup to the backup.

Thankfully the men in blue patrol our streets, attempting to keep the bad people away from the good.  The problem comes when someone who has developed ill intent persuades a law enforcement agency you should be on their list.  A badge and a purpose can bring great good, or great harm.  If the legal system have been convinced you are engaged in illegal activities, all of your assets may be confiscated.  This will include computers containing valuable data, inventory, offices, or homes, causing irreparable damage to your business.  Keep products in different locations,  offsite backups of all data, and legal counsel on speed dial.  By the time the mistake has become obvious, your company and resources may be too far gone for repair.

 

A new king or queen have been anointed.  You are the new monarch of a money generating entity.  Enjoy your reign, but remember to always use protection.  Partners, Employees, Customers, Malicious people, and yes, law enforcement can be lying in wait. Be prepared for every angle of attack, and remember, self entitled people want the cookies in your jar.

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