#285 Understanding the Law Radio - New Year Business "Resolutions"
Transcript from UTLRadio Episode #285. Don't forget to subscribe to the podcast!
You're listening to Understanding the Law Radio with your host Attorney Peter Lamont.
Hi and thanks for joining me for another episode of Understanding the Law Radio this is episode number 285 and today is business and legal Q and A. We're going to be talking a little bit about New Year's resolutions. Now for those of you who tuned into Wednesday's show you know we had an introduction to the new year to the new season of UTLRadio and we talked about why New Year's resolutions don't work and really you can apply that to businesses or to your individual personal life. So I'm not going to go into the reasons why resolutions don't work today, rather what I want to talk about is what you as a business owner or you as a business entity can do that might even seem like a resolution but it isn't - I promise you because like we talked about on Wednesday only 10 percent of the people who make New Year's resolutions actually stick with them and make something happen out of them.
So we're going to talk about what you and your business should be doing and what goals you should be setting right now in January the start of a brand new year. Before we get into that topic however, I just want to make a few quick announcements. This Monday we are back on our regular schedule and you can tune in and listen to our business and legal Week in Review. For those of you who are fans of the show you know that we talk about current events. We look at current legal cases or decisions and you know some business news and we talk about it and we analyzed it but it's more than just a news show. We actually teach from it.
We apply what we can learn or what we have learned from some of these news stories and we give you some tools that you can use in your own business or even in your own personal life that can help you. For example we talk about trademark cases and I explain how that decision or that ruling in that one trademark case can have an impact on your business or how you could avoid making the same mistakes that the people in that lawsuit made. So that's this Monday. And then on Wednesday we're going to do our business and legal Q and A, so back to our regular schedule. I talked to you the past show about the new schedule for the upcoming year and how we're going to start off with two programs for the first quarter and then we'll see where it goes from there.
Also please make sure that you are subscribing to this podcast over on iTunes and it would really mean a lot to me if you would just rate the podcast. You know just let people know that it's a good show a valuable show and that we're giving away good information. There's so many podcasts out there and it's just so hard to let people know about your program. And so with your help we can let a ton of people know that there is small business large business medium size business, whatever it is, legal and business resources available to them that are not trying to sell them something or not trying to encourage them to use a product or whatever. I mean there's none of that on this show. This is just straightforward business and legal information and advice. All right also don't forget that we are over there on Facebook.
We are on Twitter and you can find everything on UTLradio.com that's obviously short for Understanding The Law radio UTLradio.com if you want to reach me at the end of the show obviously we run the numbers and everything but if you want to reach me with a question or comment you can e-mail me at firstname.lastname@example.org or give us a call at 201-904-2211. All right let's jump into today's show and we're talking about the idea of New Year's resolutions and I talked to you last time about how they don't work. But now let's talk about something positive and what should you and your business be doing in January to sort of set the stage or set the tone for the new year.
Well one thing that I really like to encourage businesses to do in January is to take stock take account of where they are what problems challenges situations came up in the prior year. Look back at 2017 and what issues did you have as a business owner as a company. Did you happen to have a problem with products or with your manufacturer? Did you have a problem with internal issues? For example independent contractors or employees. Did you get sued last year? Look at what happened and don't look at it from a critical standpoint of why did this happen and this was awful. Look at it from a learning standpoint. What could you have done to avoid whatever happened to you in 2017? Or what could you do right now to make sure that whatever happened to you in 2017 never happens again or at the very least you limit the likelihood that it's going to occur again.
So that's number one you need to take stock of what occurred in 2017 and highlight at least acknowledge all of those things that went wrong or that didn't go the way that you wanted them to go. So that's number one. For those of you who grew up in the 80s remember the cartoon G.I. JOE I know G.I. JOE has been around forever but the cartoon in the 80s there was that tagline at the end of the show where they did like this little PSA announcement. They were like knowing is half the battle. Well it's kind of true in business you need to know where you went wrong or where you didn't meet your expectations or your goals or your targets knowing it really is half the battle.
Because if you don't know where you don't acknowledge them then you can't make it better you can't fix it. You can steer your ship in the right direction to avoid making the same mistakes over and over and over again. And I think historically speaking by the way if you have a business that makes the same mistake over and over and over again it's not going to be a business that you have for a very long time.
Successful companies, they all encounter problems. You know some people in the let's live all positive world liked to refer to problems as challenges. I don't care what you call them. Are issues that come up that every business has to deal with. So you're not immune simply because you were on a tight ship. Everybody has them. The issue is what do you do with them when you have them. And step one for this new year is take stock of what happened to you last year. Now we've talked about the negative but conversely also look at what happened you in 2017 in your business. That was amazing. What did you do. Did you perhaps have a quarter where you launched a new marketing campaign and it was highly successful. Well let's focus on that what did you do right. Maybe you brought in a new team leader or a project manager or maybe you hired some independent contractors that worked out for you. What did you do to make that happen. Because all that you need to do moving forward is replicate what you did before. Now sure you're going to have to adjust to changing situations. I understand that but if you ran a successful campaign last year what can you take from that to run another one this year or when you're hired that team leader that was super great. What did you do in the interviewing process. What did you do in the screening process. How did you find that person that has become such a valuable member of your team.
So step one first thing you do this year take stock of where you are good and bad. All right. Number two you should be looking at your insurance coverage. I know insurance is super boring and who the hell wants to talk about insurance on a podcast. I get it. But it's very important to your business. This is a good time to take stock and look at your insurance coverage. Depending upon when your business started you know your coverage could be good for another six months it could be good for another 9 months or it could be coming due very soon.
Look at your insurance coverage. Don't just take a policy and then never look at it again. You know I'll tell you a kind of sad story. There was a startup business that took out a policy of insurance and at the time they only had two partners in the business no assets no nothing. You know some old computers and that was it.
Well six years later that business grew. They had inventory they had equipment they had a whole bunch of expensive things and they had a flood in their office which destroyed I think it was 92 or 93 percent of everything that they had in their computers, tablets, everything, even parts of the infrastructure. They went to the landlord and landlords said, "All right well you know we're responsible for a b and c you're responsible for the rest and go to your insurance company you'll be set." Well wouldn't you know it. They never changed their insurance from that initial policy. And of course there wasn't enough money to cover. And they had serious issues that almost landed them out of business. Fortunately for them they were able to come back borrow some money and make it work. But I don't want to see that happen to you. Look at your insurance coverage.
If you happen to be in a part of the country where you are prone to natural disasters fires hurricanes flooding, look at those policy endorsements. Look and see, do you have flood coverage or are there exclusions in your policy that eliminate your ability to recover from flood or fire. So that's important because like if it's a hurricane thing and you're here in the continental U.S. hurricane season is like what, August September October? That's when we see the most of the damaging hurricanes. You've got time to make sure that your policy has adequate coverage for flooding. California, maybe you need to look and see if you've got some sort of fire coverage. I mean it sounds farfetched, "Well why do I need that?" You know I've been in business for 15 years and nothing's happened. All it takes is that one time and that one time could be enough to bankrupt you and your company. So looking at your insurance coverage and making sure that you are covered for all of the things that your business now does the extent that your business has grown is very important.
As a side note you should look at, depending upon what you do, look at taking on a errors and omissions policy. It's really an extension to your existing insurance policy errors and omissions or directors and officers. Essentially it's a negligence policy. If you do something wrong or you don't do something that you should have and it wasn't intentional. It's not like you're trying to hurt your clients or consumers, but it's a mistake. You could get additional coverage for those mistakes so that it doesn't come out of your pocket. All right. So that's number two. Finally we'll keep these podcasts, especially the Q and A's, nice and short. Finally though, I want you to look at all of your contracts, handbooks, agreements, policies, and employment documents.
This is the time to do it. Look at them. Contracts and agreements are living documents I've said this many times before. It is not something that you have drawn up and you throw in a drawer and every time for the next 15 years you have a new employee you give them the same thing. That might work for a few years. But laws change situations change your business changes. And every year it is worth taking a little bit of time whether you do it yourself or you bring in your legal team or your human resources director. It is worth looking at the documents that you're using to protect yourself. When you enter into an agreement with a client or a customer and they're signing something even if its something as simple as a dry cleaning business or on the back of your ticket, you've got some sort of liability Disclaimer.
These things are very important to the operation and success of your business. So it's very important to make sure that you update them. Update them consistently. Look at them. Understand that these documents are living, meaning that they're not static. You need to change them over time. And once a year is typically a good amount of time to let elapse before you start reviewing. I know that sometimes a situation might come up that causes you to you know deal with that situation but then immediately change your documents because you realize that something critical had happened there was an omission in your document or your contract and you need to rectify that immediately. But in general looking at your contracts once a year it's a good thing.
Make sure that if you drafted the contract or agreement and let's say it's you know it's something you did when you were a startup and you didn't have enough money to have a lawyer look at it, but now you're doing better and your business is growing. I know it sounds like a sales pitch. It's totally not. You need to have an experienced lawyer look at your documents. In the past I don't know 13 or 14 years, I have seen so much litigation arising out of poorly drafted contracts and it typically is that same scenario I described you're a startup you don't have a lot of money. You go on the Internet you find a contract and you use it only to find out that it's unenforceable or there are issues that you've created with the contract and now you're being sued five six seven ten years later you know beyond when you drafted that original agreement.
When you have your documents reviewed it is well worth the money to have a qualified lawyer, and when I say qualified I mean a lawyer that deals with business and contracts. You would not want to hire a family friend who happens to be a family law attorney to look at your documents. They're not going to know what they're looking for. And it doesn't have to cost an arm and a leg. If you have an existing document and you're looking to hire an attorney to make some modifications or to review it sometimes depending upon the document, It could be a few hundred dollars, and that few hundred dollars could save you tens of thousands of dollars if something in that document wasn't right. I'll give you an example. Very recently I had a client that came in and they were doing their own sort of end of the year audit and they were looking at their documents and looking to make sure that everything was in place and that as they moved into this year right they're going to be growing and expanding they wanted to make sure everything was in place.
So they showed me a contract that they had been using. It had been drafted by an attorney who was a friend of the family and the friend of the family was an immigration attorney who dabbled in contracts. So they've been using this contract for over a year. And when they brought it in to have me look at it I was able to very quickly very quickly look at it and say, " All right, most of it's fine, however there are new jersey specific statutory requirements that your contract is missing.
Here's what they are. Let's throw them in." I think the whole thing cost them 500 dollars review, modifications, and finalizing a new contract. And for that five hundred dollars or so they're going to be protected moving into 2018 and as they grow they're not going to have those potential issues. Now if they hadn't done that all it would take is one customer just one customer to file a lawsuit. And have you know as a solid lawyer on their side who identifies the fact that statutory requirements are missing. And before you know it they would have had a consumer fraud claims and a whole host of other things from a mistake from something that they didn't do. I mean they gave it to a lawyer right. But that lawyer wasn't a specialist in contracts.
So to sum up today's Q and A which wasn't really a Q and A it stemmed from a question that I had received from a client by the way talking about resolutions which is how I got onto the resolutions topic during the last show. But to sum it all up I want you to do three things. Don't make silly resolutions and things that you're never going to live up to and you know my business is going to make a million dollars in a month. That's great right. If it's going to do that then have a plan. We talked about that on last Wednesday's show. But what I want you to do is number one take stock of where you are, what happened last year good and bad and how can you modify your company your business your practices and policies etc. moving into 2018.
Number two look at your insurance coverage. Analyze it. Get, you know, a broker's opinion get an attorney's opinion get whoever you know feel comfortable with get their opinion find out if you need to up your coverage if there's something that's not right. You need to change something or add something. And finally number three make sure that you are looking at your contracts, policies, agreements, and you understand the fact that they are living documents that cannot remain static, that you need to change on an annual basis and now is a fine time to do it. You know just a quick point.
There's a client that needs to make some modifications to their employment agreement and their minor but when they had done it in the past without an attorney they do it whenever they felt the need. And these are minor, these aren't things that need immediate attention. A couple of times they do it in November. And what happened was their employees actually started over thinking what was going on and wondering well why are you having me sign a new agreement and a whole bunch of these employees thought they were going to be fired at the conclusion of December. I know it's silly but point being January is a great time to make changes to a contract because it's very easy to explain to your staff your employees. It's a new year. We're analyzing where we are we're analyzing our coverage our policy our contracts our documents and we're going to make some modifications. So January is a great time to do it. All right that's going to do it for today's show. What I want you to take away from this is you should be doing something in January.