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In this section we
have:
Why
Do I Need Professional Indemnity Insurance? Small
& Home Business Scams Q & A
Setting
Up A Home/Small Business in the United States
About
Blurb Why
do I need professional indemnity insurance?
by Hanna-Maria Suarez
When
a professional goes into business for themselves, they have a number of decisions to make. One of these
pertains to insurance coverage. A decision whether or not to obtain professional indemnity insurance must
be made. Many will decide to forgo this type of insurance coverage which in the long run can prove a costly
and detrimental business mistake. Professionals are afforded many benefits by taking out professional
indemnity insurance – visit Markel
UK insurance for more details!
Essentially,
the purpose of professional indemnity insurance is to help defray any compensation that may be awarded
to a third party. In today’s world, people are much more litigious. Professionals need to have protection
against possible claims. Sometimes, juries can award astronomical sums of money which without professional
indemnity insurance would cause a business to go bankrupt. Not only does professional indemnity insurance
pay for compensation awards but it can also be used to pay for legal expenses that come along with a suit.
Often legal expenses are acquired even before a case goes to court because both parties try to come up
with a compromise. Professional indemnity insurance will also pay for legal expenses accumulated during
this process.
Professional
indemnity insurance can be used for a variety of claims. Today, many claims are made due to the belief
that intellectual property has been stolen. Professional indemnity insurance would cover a business in
these situations.
Sometimes,
professionals find themselves facing incredulous claims of which they are completely innocent. Paying
for unnecessary legal expenses can become a financial burden over time. However with professional indemnity
insurance, these expenses will be covered up to the policy’s maximum amount.
Many potential customers today thoroughly check
out a business before dealing with them. Checking
out insurance coverage is an important aspect
of this. Some customers are apt to pass up a business
that does not have any type of professional indemnity
insurance.
Will
US and/or visitors with US business interests
please note specific requirements, one
of which pertains to insurance coverage.
A decision on whether or not to obtain professional
indemnity insurance or professional
liability insurance quote must be made.
Small
and Home Business Scams Q & A
by Marian Owen, BA (Hons) Economics,
FCCA
The Home Business Alliance and The B.O.A.R.D, now Business Opportunity Watch (B.O.W)
are the UK's senior, private investigation source into 'business opportunity' style scams. Below, we give
a typical media question and answer session to help you sort the wheat from the chaff.
How can people tell
a genuine legitimate business opportunity from a scam?
If it sounds too good to be true,
then it probably is.
Business opportunities which promise that you will achieve a certain level
of income are often dubious. Logically, it is not valid for a business opportunity promoter to promise
that his business opportunity will achieve a certain level of income because the income which any operator
will achieve depends upon the hours they put in, their level of ability, the level of their local competition
from other businesses offering a similar product or service etc, etc.
Any particular tell-tell
signs to look out for?
In addition to business opportunities promising a certain level
of income, it's an even starker warning sign if the business opportunity also says that it's very easy
to operate the business, and it doesn't take much time, and you don't need any particular skills or abilities.
If all these claims were actually true, then it simply does not make commercial sense for the promoter
to be selling this opportunity. Instead, he would be keeping all the high claimed earnings for himself
and employing part-time staff to carry out the little work required. In
general you need to work hard to generate a good income. Would you agree that if it sounds to good to
be true it probably is. Have you found any scam-like too good to be true opportunities that actually were
true?
Yes, you do need to work hard to generate a good income with just about any business.
Unfortunately, if the business model is flawed and it doesn't work very well, then no matter how hard
you work you are unlikely to be able to build a good business.
The best rule of thumb is that
if it sounds too good to be true then it probably is. business opportunity promoters know this, and those
who can afford it employ the top copywriters to write very long sales letters which repeatedly press your
psychological buttons to an almost irrestistible extent so that you forget about "too good to be
true" and become swept up in the excitement of having at last found an easy and profitable opportunity.
Sales letters like these typically show you "proof" of earnings in an attempt to convince
you. However, such "proof" is rarely reliable. Even if the screen shots of earnings coming into
a PayPal account or the images of money coming into a bank account are genuine, the earnings may have
come from the promoter's sales of the opportunity, rather than from his earnings from running the opportunity
himself.
In fact, I would say that if someone promoting a business opportunity finds it necessary
to include "proof" of earnings in his marketing material then this is another warning sign because
it implies that the promoter knows that the rest of the information he gives about his opportunity is
not credible and convincing enough without this "proof".
I have never come across any
business opportunity which sounded too good to be true which turned out to be true.
How
common are these scams nowadays: Craft assembly, chain letters/emails, envelope stuffing/email processing/ad
placing, MLM, calling premium rate numbers for more info, etc. Are there any more common scams you could
add to this list?
Thankfully, bogus craft work and envelope stuffing opportunities are
on the wane, probably largely because of the wide publicity given to them by the Office of Fair Trading
and other consumer organisations. Email processing and ad placing opportunities continue to proliferate
on the Internet however, with misleading advertising suggesting that these are jobs where you are paid
for processing emails or placing ads, whereas in fact you are simply operating as a self-employed person
and you don't receive any money actually for processing emails or placing ads. Instead, you only receive
money if you make a sale. Because you normally have to pay to place your ads, then you can lose money
if you don't make sales.
Advertisements which ask you to call premium rate numbers for more information
have now declined due to the legal requirement to show the costs of the calls and the policing of premium
rate numbers by the regulatory authority.
One category of bogus job opportunity which has flourished
on the Internet, however, comes in the form of survey jobs and mystery shopping jobs. There are many reputable
companies who recruit people to carry out surveys and mystery shopping, and they don't charge you a fee
to join. The bogus variety charges a fee. MLM
- would you agree that if the opportunity is more about finding recruits than selling products/services
it's likely to be a pyramid scheme and not recommended?
Multi level marketing is a valid
business model, and a number of multi level marketing companies are on our recommended list. However,
it's also true that there are a large number of multi level marketing opportunities where the business
model does not give the average new recruit a fair chance of building up a business. As you suggest, schemes
which emphasise the need to recruit other people rather than to sell the products and services are generally
to be avoided. Schemes like these are unstable and normally don't last long because, once the scheme has
reached a certain size, the earnings of people in it start to drop because they no longer find it so easy
to recruit other people, and these recruits were their sole source of income. Word of falling earnings
spreads on the Internet and the scheme declines.
By contrast, it's a far better option to join
a multi-level-marketing opportunity which emphasises the quality of its products and services and which
tells its recruits that they need to make retail sales in addition to recruiting a team of people. This
type of MLM is far more stable because its products and services are typically of good, marketable quality
and recruits have two income streams - retail sales and recruitment. The typical recruit who is not a
natural salesperson can concentrate on retail sales and will find it natural and easy in due course to
talk to satisfied customers about joining the business, rather than approaching people cold. What
about legitimate Home-working opportunities such as Clickworkers, etc?
I have to admit
that I had never heard the term "Clickworkers" before. I assume that you have in mind the website
at http://www.clickworker.com. I've had a quick look at this,
and it seems an excellent idea. They have 87,000 people registered with them. You can register with clickworker.com
to offer your services on a self-employed basis to carry out tasks such as writing, translating, inputting
data etc. There isn't any cost to join and, depending on your CV, you are notified of suitable projects
which you can then apply for. Companies who have work that they need people to do send details to the
site, and they pay a fee to Clickworker for the completed work.
Unlike Clickworker, all bogus
"job" opportunities ask people to pay, often in the guise of a registration fee, or a fee for
a start-up pack. It's simple to avoid bogus job opportunities - simply avoid any which ask you to pay. It's
advisable for people seeking business opportunities to get things in writing, contact references, avoid
urgent requests to act now... anything else you can advise?
Sometimes, getting things
in writing doesn't help, because sophisticated business opportunity promoters have contracts which are
written by lawyers which, while they seem to be perfectly proper and correct, in fact give you very few
rights. Because of the specific legal language used, the average person might not realise this and so
it's a good idea to consult a lawyer before you sign any contract.
Apart from avoiding opportunities
which sound too good to be true, there are two basic ways people looking for a business opportunity or
a franchise can protect themselves. Firstly,
make sure that you ask to be put in touch with some people already operating the business. It's not a
good idea to allow the promoter to direct you towards just two or three operators of his choice. Instead,
what you want is a list of at least five operators from which you can choose the ones you want to contact.
Don't let yourself be put off by invalid excuses such as the promoter saying he's prevented from
giving you these details by the Data Protection Act. The Data Protection Act does not apply where someone
has given permission for their details to be used for a purpose. And, in my view, any decent business
opportunity promoter should have already secured the agreement of his operators to take phone calls from
prospective newcomers from time to time.
Secondly - and this is crucially important for any business
opportunity which costs a lot of money, such as a franchise - ask for proof of earnings. This doesn't
mean a screen shot of a PayPal account. It means being able to see the original bank statements of an
operator of the business. Or, with a franchise, it means being given audited accounts of the pilot franchise,
which all franchisors should run for at least a year before they market franchises to the public.
If you are pressurised to act now to join a business opportunity, then this should make you suspicious.
If it's a genuine business, then the promoter's chief concern will be to get good people to join, and
people who have had the time to carefully consider whether it is the right opportunity for them, so he
won't pressurise you to make a quick decision. How
can people check online if a business opportunity is legit or not? eg contact your organisation?
It's difficult to get reliable information with an online search. Some business opportunity promoters,
for example, advertise their opportunities on many sites and may also have written articles under different
names extolling the virtues of their opportunity. Also, in the case of multi-level marketing schemes,
recruits often set up their own web sites in an attempt to recruit other people into the scheme. Results
like these are obviously not independent assessments.
It's particularly difficult to obtain an
independent view about the viability of a franchise, because most franchise websites are simply filled
with advertising from franchisors. It can often take a couple of years before problems with a franchise
become apparent and, even then, nothing about these problems may appear on the Internet because a tightly-worded
franchise contract may effectively gag the franchisee from publicising anything about the franchise.
Forums can provide a useful source of information, and other users of the forum often point it out
if someone posting favourable comments about an opportunity seems to be from the company itself.
Also, our own Home Business Alliance website carries links to business Opportunity Watch which carries
out formal, independent assessments of business opportunities and franchises. There is a charge for these
reviews.
Most other sites which provide reviews of business opportunities, often free, are either
financed with advertising from business opportunity promoters or they are actually run by business opportunity
promoters, so it must sometimes be difficult for them to give unbiased reviews. Is
there an up to date list of scams available anywhere? Not
that I know of. Scammers and promoters of dubious business opportunities never cease to amaze me with
their creativity, and new ones are appearing all the time. Can
you tell me about any scams that target existing business owners such as overpayment scams, scams to protect
domain names and evaluate businesses? There
are a number of scams which target business owners, such as the following:
- signing up for what
you think is a free entry in a guide, only to later find out that it costs you several hundred pounds.
- high pressure selling to persuade you to advertise in publications produced for schools or charities,
and the publications do not materialise as promised
- false charges for operators of CCTV systems,
falsely claiming that they come from the Information Commissioners Office
- bogus invoices e.g
for stationery or printer cartridges.
- bogus demands for payments for registration or training
for health and safety
- bogus demands for large fees to register under the Data Protection Act
- cold calling to pressurise you into buying a domain name, falsely claiming that another person
is interested in buying a domain name similar to your own and you need
to prevent this by quickly
buying it yourself
- unscrupulous firms who charge large fees claiming that they can greatly
reduce your business rates
- emails falsely claiming to be from HM Revenue and Customs which
try to persuade you to hand over confidential information in order to obtain a tax rebate
- overpayment
for business goods by cheque, with the customer then asking for a refund of the excess amount, but the
cheque turns out to be fraudulent
In America people can check out a site's reputation/credibility
by calling the Better Business Bureau. What organisations exist that are similar in the UK? The
Better Business Bureau in the USA fields complaints from US citizens about US businesses. It then invites
the business to resolve the complaint, and for each business it publishes a report summarising the complaints
received and whether they have been resolved and it gives the business a rating as a result. It's a very
useful indicator of the credibility of a business, and it's a shame that we have nothing like it in the
UK.
However, we do have the Advertising Standards Authority, which does a sterling job in exposing
advertising which makes claims and promises which the advertiser can't back up with hard evidence. Recently,
the remit of the Advertising Standards Authority has been extended to include the marketing content of
companies' websites. So anyone who has doubts about the claims a business opportunity promoter makes on
his website can make a complaint to the Advertising Standards Authority and they will ask the promoter
to provide evidence to back up his claims. How
common are business scams? Do you know any figures about how many people are affected by them each year? I
don't have any recent figures on these scams, but in December 2006 the Office of Fair Trading carried
out research and produced a paper entitled "Research on impact of mass marketed scams", which
looked at various scams targeted at consumers such as property investor scams, high risk investment scams,
premium rate telephone prize scams and also work at Home and business opportunity scams. On the basis
of their research, the Office of Fair Trading estimated that UK consumers lost about £3.5 billion
to scams in total each year. Of this total, they estimated that work at Home and business opportunity
scams cost the UK public £70 million a year and that 330,000 adults fall victim to these scams every
year.
I doubt that these figures have decreased. END.
Basic
steps for setting up a Home/Small Business in the U.S.
by Richard Jacobs
Forward:
I asked Richard to let us have a few words about setting up in business in the States because it does
seem to be an activity surrounded by a great deal of popular misconception in the UK and Europe. It's
only a summary but it does go to show, I believe, that there are hoops to be jumped through everywhere.
. . Ed. Most people
prefer going into business as it offers greater opportunities of growth at a much faster pace. In contrast
to a regular 9 to 5 job, your own business gives you the opportunity of being your own boss. Being in
control of things may be an exciting proposition but it also requires dedication, hard work and some careful
decision making. If you are interested in setting up a small business you may be concerned about a lot
of things including, determining costs, nature or type of business, business status, location, financing
options and other legal formalities involved. Here
are some of the more important areas of concern in setting up a small business. Start-up
Costs
The costs for
setting up a small business can vary, depending on the type and nature of the business. For
instance a retail store would require display cases, racks, as well as a cash register, a credit card
terminal, computer equipment, security equipment, telephone equipment, and signage for the outside of
the store. With some careful shopping and selective purchasing, these expenses can come in under $6,000.
A telemarketing operation, on
the other hand may require a significant investment in equipment alone which may cost up to more than
$10,000. The costs add up when you provide for computers, furniture, stationery, and other supplies. The
set up costs can be very nominal in case of Home based businesses. Depending on the type of your business
you may have to invest as much as $30,000 to $50,000 in initial costs for a small business setup. Business
Status
Sole Proprietorship:
When starting a new Home/ small business you have to take into account the legal status of your business.
The easiest and the quickest option would be to begin as a "sole proprietor." This way you can
just start doing business without any cumbersome legal formalities. The advantage of being a sole proprietor
is it's easy and cheap. You just have to file a "Schedule C" on your personal tax returns to
report business income. The disadvantage is that you have unlimited personal liability towards your business
failures or mistakes. Corporation:
There are three main types of corporate forms for businesses
"C"
corporation
"S" corporation
LLC or Limited Liability Company
The most common
choice for small businesses is either an "S" corporation or an LLC, as these forms limit your
personal liability while still allowing profits and losses to be declared through your personal tax returns. Business
Location
When setting
up a small business the location of you business should be well thought of. Selecting an appropriate location
when starting a new business can be quite time consuming. Think of it as an investment as the more information
you can obtain about locations, the better position you will be in to make the right decisions. Ideally
you should be looking for the perfect spot for your target market. But you may have to consider factors
such as location, costs, restrictions, and lease or purchase terms. You also need to look at available
space and make sure that it will easily accommodate your business's equipment and storage requirements.
Legal Pre-requisites
While setting up a small
business there are a number of legal formalities you may be required to complete, although these may vary
for different state, cities and counties some of the most common have been listed below. Federal
Tax Identification Number: If your business is a corporation or LLC and you have employees working
for you, you'll need a Federal Tax Identification Number. State
Identification Number: Some states may assign you an identification or account number for various
reasons like, corporation number, employer account number, certificate numbers for specific licenses. Business
License or Permit: You may have to check for any business license or permit required for your business.
Most cities and counties require businesses to have business licenses. Resale
License: A resale license enables a company to purchase goods or materials for manufacture or resale
without paying sales tax as it is the end consumer who pays the tax DBA
(doing business as): If you use any name other than your own name, you'll need to file a "DBA".
This enables the public to know who's actually operating a company. Author
Bio
Richard Jacobs
is a chief editor since early 2007, and he currently works for http://www.Myduiattorney.org
a website that helps you to find the right DUI Lawyers. You can search for a Mesa DUI Lawyer online, anytime! Further
input or comment from our numerous American visitors are welcome to info@homebusiness.org.uk,
subject, 'US business'. A
further comprehensive link to starting a business in North America particularly, can be found here:
http://entrepreneurs.about.com/od/gettingstarted/Starting_a_Business.htm
About
Blurb
A personal
view of a particular publishing experience with Colin Edwards
Our
roving columnist, Colin Edwards, agrees with the old truism that everyone probably has at least one book
in them and explores a way of getting it out without tears. It
is ironic really. A words-on-paper guy like me contributing to an e-publication. I really did try to convince
Len that he should continue ‘Boss’ and ‘The Board’ as paper periodicals but, the economics
of the pixel publishing made the change inevitable. Now
the fight back has begun on another front. Until now I have not used these columns to name names, promote
products or to even burble about business as other contributors do all of these admirably. Even now this
isn’t even a promotion and it certainly isn’t paid for. It is just a brief canter through a
recent personal experience with a product that could help you promote whatever you do for a living as
you enjoy your next cup of coffee.
Until a few years ago, if you wanted to create a book you
would submit your manuscript to a potential publisher who would laugh and go off to lunch at The Savoy
or, you could pay a four figure ransom to a rip-off vanity publisher. Some local printers might have shown
a flicker of interest which was soon extinguished when they heard that you didn’t want to print at
least 10,000 copies of your masterpiece. Now,
thanks to a USA based company called Blurb, it is possible to print just one copy of your paperback book,
with 80 pages and coloured covers, for £1.95. That is their entry level price and the range goes
upwards and onwards, right up to luscious full colour coffee-table tomes and photographic portfolios.
There are no minimum order sizes so take a wander around www.blurb.com and click a few headings to explore
the options and maybe watch their how-to video. I
got there because my father had laboriously typed out his autobiography some 40 years ago and I decided
that it would be a more lasting legacy if I transcribed his discoloured foolscap pages and turned them
into a real book. Although I am a self taught computer amateur, I found Blurb’s package incredibly
easy after a couple of minor stumbles, Their
well developed ‘BookSmart’ software is a free and fast download, there are no minimum orders
and there is nothing to pay until you are satisfied with your careful edit and spell check and have hit
the ‘order’ button on the screen. In my case it was a week later when the courier driver arrived
on my doorstep with a large parcel [although the three copies of the book were each only 5” x 8”]
They came via FedEx in a carton that could probably defy a hurricane or three and it was even fun to track
its progress across the USA to arrival at our local depot. The
limitations of my own skills were revealed when I tried to create the text in Microsoft Word and export
it to BookSmart. I don’t have a full pdf program on my computer so I couldn’t use this method
either. Instead I selected the option that allowed me to type directly into the BookSmart templates. My
only gripe is Blurb’s insistence on printing and shipping from the US where shipping can double the
costs of smaller orders and isn’t especially environmentally friendly. There seems no reason why
they couldn’t find UK print-on-demand shops to handle their orders and still keep a handle on quality
control. Just imagine how you
could use copies of your own professionally bound book to promote your business, service or products.
You could create procedures manuals, brochures and even full colour magazines on art paper. You might
just want to have fun and take an ego trip. You may be surprised at some of the works offered in the Bookshop
section of the Blurb site, including a few that, as there is no censorship, would give your maiden aunt
an attack of the vapours. Although
it is well documented in the help pages on their site and, it is worth emphasising that Blurb do not read,
correct or edit what you send them. That is why you must proof read everything several times over a few
days before you place your order and even then, they remind you to order just one copy first before you
go for multiple orders. There
ARE other companies who offer similar services but, Blurb is the only one I have tried so far. You could
suggest that potential readers can buy your books from their website. If you want to make them available
through the bricks ‘n’ mortar or interweb book trade you will need an ISBN and barcode. These
are explained on the site and at various other web locations. Guess
what? If you need help with writing your biography or the history of your business, I know a man who can
help. What a surprise! To stimulate
your creativity, go to http://www.blurb.com, follow the link to ‘bookstore’
and then ‘recently published’. You will find dozens of front covers and, quite a few where one
more click will let you read sample pages. Colin
enjoys your emails with his coffee break. He is at colines@gmail.com [Microsoft
Word, Blurb and BookSmart are registered trademarks] END. | 
