Risk Management Bulletin

Many small businesses operate by the quote, “The customer is always right.” That mantra doesn’t apply to awful customers, though. They put your business at risk in several ways.

Off-Color Jokes or Sexual Harassment

Any kind of off-color jokes or sexual harassment could result in lawsuits by your staff or other customers. You can’t afford to tolerate customers who behave in this manner.

• Ask the customer to refrain from this behavior.
• Talk to your lawyer about ending any ongoing contracts with customers who continue this behavior.

Critical

Critical customers may consistently point out defects or faults. They may also post negative reviews, belittle, call names or harass. These customers decrease morale quickly, could offend other customers and may cause you to lose business.

• Contact critical customers to find out the exact problem then offer a solution.
• Learn from the criticism if it applies and ignore it if it doesn’t.

Rude

Rude customers may throw fits because they’re having a bad day or want to get a better price. They actually decrease staff morale, which affects productivity, and they can make other customers uncomfortable and cause you to lose sales.

• Lower your voice and remain calm.
• Talk to rude customers in a private area.

Want Free Work

You wouldn’t give customers money from your pocket just for walking in the door. However, giving away your services or products for free essentially allows customers to rob you.

• Always set a fair rate for your services.
• Value yourself enough to get paid what you’re worth.
• If a customer wants extra services beyond the current contract, ask for more money.

Pay Late

Every time a customer pays late, you waste valuable time doing collections when you could be finding new customers or serving current customers who do pay on time.

• Always ask your customers to pay upfront.
• If you do extend credit, be sure it’s only partial credit.
• Don’t deliver the final service until payment is received in full.

Unresponsive

Your customers expect you to communicate regularly, and they should also return messages quickly and give you the information you need to do your job.

• Offer a grace period in case of an emergency or unexpected life event.
• Reach out via multiple methods, including phone, email and text.
• Move on if the customer remains unresponsive.

Demand Your Full Attention

Customers who demand your full attention or micromanage their orders leave you little time to cultivate new customers, nurture current customers or diversify your business. When the big customer moves his account elsewhere, you face lay-offs or even bankruptcy.

• Set boundaries that outline how much time you will give to customers.
• Remember to work all angles of your business.

Your small business relies on customers for its success, but you do not need to tolerate awful customers who put your business at risk. Handle those customers in a way that protects your business.

Security in your small business must include your website. Otherwise, hackers can gain valuable information about your finances, customers and employees and put you at legal risk. Since hackers target businesses of all sizes, use 13 tips to protect your website.

1. Complete software updates. They seem insignificant, but they keep your security updated. Set your system to update automatically and prevent you from overlooking this important security measure.

1. Boost password security. Your password can include a variety of letter, numbers and symbols, but the most secure passwords are long phrases such as “ilikebananasandwiches”. Never write down passwords, and assign a different password to every user and account. Remind staff to change passwords frequently, too.

1. Limit access. Everyone should not be able to access all accounts. Establish limited access as you protect accounts.

1. Change the default database prefix. Typically, the database prefix is wp6_. Change it to something random.

1. Install a web application firewall (WAF). Whether your WAF is software or hardware based, it reads all the data that passes between your website server and data connection to ensure it’s safe. For a small monthly subscription fee, you can also access a cloud-based WAF that blocks hacking attempts and filters spam and malicious bots.

1. Install security applications. Several free and paid security applications slow down hackers. Some may even hide your website’s CMS, which prevents automatic hackers from accessing your site.

1. Limit file uploads. They may contain bugs that give hackers access to your data. Instead, store files outside the root directory and require a script to access them.

1. Use SSL. It’s encrypted and protects personal information as it passes from your website to your database.

1. Serve your website over HTTPS. It encrypts traffic and prevents hackers from eavesdropping or intercepting passwords and other information.

1. Never email user names or passwords. Email is not secure, and hackers can access email and all the information they need to get into secure accounts.

1. Limit login attempts. If a user attempts to login more than three times, for example, set the system to lock down. Include password resets in this limit as you deter hackers.

1. Scan every device for malware. All the devices plugged into the network should be scanned for malware when they’re attached to the network. Perform periodic scans as you increase security, too.

1. Back-up frequently. Multiple times a day, your data should be backed up on-site and off-site in multiple locations.

Hackers can destroy your business as they steal data, ruin your reputation and put you at legal risk. Protect your website and reduce your risk of hackers with these 13 tips.

Your small business expenses and personal expenses should stay separate. However, it’s easy to spend business funds for personal expenses, which can affect your personal credit. Understand the business credit mistakes that put your personal credit at risk.

Start or Fund Your Business With Personal Credit Cards

To get your business of the ground, you may use your personal credit cards. Whether you charge a few hundred or a few thousand dollars, this financing option could cost you.

Open a business credit card to get your business running. As an alternative, ask for trade credit where your suppliers agree to give you 30 days to pay off the balance of your bill. These steps separate your personal and business finances and can assist you in getting financing in the future with a favorable interest rate and terms.

Use Personal Guarantees

Business financing or credit is usually only available if you give a personal guarantee that you’ll repay the money. Those guarantees will show up on your personal credit reports, though, and could affect your credit score and your ability to get credit in the future.

Make an honest effort to never borrow more than you can repay. Don’t default on business loans, either. Wise financial management now assists you in obtaining future funding.

Make Late Payments

Sometimes, you can’t pay bills until your customers pay, and if they pay late, then you pay late. Other times, you may forget to make a payment. One late payment might not be a big deal, but two can negatively impact your personal credit.

Set aside enough money to pay several months of bills on time. Also, use automatic bill pay when possible and have the payment draft from your business bank account a few days before the due date. Stay current on all payments as you protect your credit.

Max Out Your Business Credit Cards

Certain business credit card providers will report your payment history to consumer credit agencies. Late payments and maxing out your credit card will have a negative effect on your credit score.

Always leave a cushion on your credit cards and resist the temptation to charge your full credit amount. Consider making early payments and paying twice a month as you lower your balance, too. You may also want to use a business credit card that does not report to personal consumer credit agencies.

Your small business can ruin your personal credit. Reduce your risk by separating your accounts. The way you structure your business can protect you, too. Talk to your financial advisor for more information on how to protect your personal credit as you build your small business.

Does your business have a busy season? It might if your industry is retail, landscaping or catering, and that means you may need temporary workers. Here are several tips on how to add those workers quickly to your staff during your busy seasons.

Prepare and Plan

Unless this is your first year in business, you know when your busy seasons fall during the year. Take time during the slow times to prepare for the busy hiring season.

• Decide how many employees you need.
• Outline job duties and write detailed job descriptions.
• Write your help-wanted ad and identify in-print and online job boards.
• Clear time in your calendar to conduct interviews.
• Set up a training program.

Hire a Temp Agency

Screening employees requires a big chunk of your time and valuable resources. Consider hiring a temp agency.

The temp agency is experienced in finding, screening and hiring employees. In fact, they probably already have a list of potential employees for your business. With their help, you can focus on doing your job instead of on finding and hiring temp workers.

Start a Referral Program

You already have a team of great employees. Why not reward them for referring the people they know, like and trust. Chances are high that your team will only refer quality candidates since their reputations are on the line.

When starting your referral program, determine the reward. It can be cash, a day off when business slows down or other high value prize. Then determine how many referral prizes each employee can earn. Finally, follow through and award the referral prizes as you promised.

Recruit on Local Colleges

Local college campuses are filled with students who need extra cash. They also typically have flexible schedules, so recruit your next temp workers there.

Contact the administration office or student employment office and share your job openings. You can also participate in job fairs or get permission to post job ads on school bulletin boards.

Offer Retention Bonuses

You invest quite a bit of time and resources in finding and trailing temporary workers. A retention bonus encourages them to remain on your staff after the busy season.

The bonus can be as large or small as you can afford. Also, consider giving a bonus to any temp employees who are available as needed throughout the year to fill random large orders or cover staffing gaps as needed.

These tips can help you quickly fill seasonal employment voids. Use them to ensure that your business can fill orders and meet customer demands as you keep your business moving forward.

Seventy-five percent of the nation’s alcoholics are employed, according to the U.S. Department of Labor’s Occupational Safety & Health Administration. If your small business employees someone who abuses alcohol or drugs, your business’s safety, productivity and your bottom line are at risk.  For maximum protection, implement a zero-tolerance policy against drugs and alcohol and understand your responsibility for substance abuse.

Know the Law

According to federal law, only certain companies have to implement a zero-tolerance policy and test employees for substances. Those companies:

• Have a federal contract or grant of more than $25,000
• Are involved in any type of public or commercial transportation
• Provide natural gas facility services
• Work at railroads
• Operate vehicles registered with the U.S. Coast Guard
• Perform air traffic duties

Your small business may not meet these requirements, but you are still required to maintain a safe culture and environment in your business. If one of your employees is injured on the job, your business is responsible for the Workers’ Compensation claims. Likewise, if one of your employees injures someone else while he or she is working under the influence, your business will assume the liability.

Screen Employees  

Most substance abusers do not announce their problems. They also may gravitate toward small businesses that don’t have strict drug and alcohol policies or regular testing in place. Protect your business when you require all new employees to take a drug and alcohol test and agree to your written substance abuse policy.

Write a Substance Abuse Policy

Protect your employees and small business with a written substance abuse policy. It will:

• Outline your zero-tolerance policy or other restrictions on substance use
• Solidify any employment testing requirements
• Share the consequences for positive drug or alcohol tests and subsequent use
• Maintain confidentiality

Find more information about how to develop a legal and non-discriminatory alcohol and drug abuse policy from the Occupational Safety and Health Administration.

Provide Treatment Options

Your small business is not required by law to provide treatment options for employees who suffer from substance abuse. Consider offering treatment options, though.

Join a consortium of other small business owners. Together, you can provide an employee assistance program (EAP) that offers short-term counseling and treatment referrals and assists you in retaining your quality employees.

You should also familiarize yourself with the substance abuse treatment options provided by your insurance company. Share the available resources with employees who are covered by the policy and have a substance abuse problem.

Alcohol and drug abuse can impact your small business in a very negative way. Create a plan to address your responsibility and reduce your risk.

Every small business needs capital to succeed. You might be making cash flow mistakes, though, that threaten your business’s success. As many as eight out of 10 small businesses and start-ups fail because of poor cash-flow management reports U.S. Bank. Take time today to analyze your small business and correct any cash flow mistakes.

1. Buy Impulsively

   Whether you’re brand new to business or have been in operation for years, impulse buying is tempting. However, it can ruin your ability to buy what you need, weather slow seasons and grow.

   Curb impulse buying when you create a budget and follow it. Before you buy anything, analyze its purpose. Also, consider how often the item will be used and if you can find it cheaper somewhere else. As an example, insurance is a necessity, but shop around for the best rates on the coverage you need.

1. Don’t Get Paid in Advance

   When you allow your customers to pay after you perform a service or provide a product for them, you risk not getting your money. Plus, your cash is tied up in the materials needed to make their product.

   Always collect a portion of the total cost upfront, and use that cash to pay for materials. Be sure to collect the full payment before you make the final delivery, too.

1. Let Late Payments Slide

   You likely have a relationship with most of your customers and may not push them to pay past-due invoices. However, if you don’t receive payment for the good and services you provide, it won’t take long for you to go out of business.

   Secure your business’s future when you collect payments on time. Set up payment reminders, charge interest on past-due accounts and require invoices to be paid in full before you deliver further goods or services. Check into collections policies, too, as you protect your bottom line.

1. Don’t Keep Enough Cash on Hand

   You never know when an emergency will occur. Plus, you need to prepare for slow times.

   Set aside adequate cash. Ideally, a cushion of three to six months of operating expenses could help you stay in business if slow sales or an emergency occurs.

1. Make Unrealistic Revenue Projections

   As a small business owner, you may be optimistic about future sales.  Creating unrealistic projections could cause you to overextend yourself now, though.

   Be honest and objective when predicting your revenue. Use accurate expense and sale records as well as past data when you calculate future revenue.

Your small business’s success depends in part on your cash flow. Stop making these mistakes today as you pave for the way for a positive future. For assistance, contact your business mentor or local SCORE chapter.

A quick Google search of your business can reveal interesting results. One of the first things that may pop up is your online business listings. They include details about your services, location, hours of operations and contact information. These listings help customers find you, and they can secure your business identity in several important ways.

Help Customers Find You

Your small business grows as customers purchase the goods and services you offer. By participating in online listings, you assist customers in learning more about your business. When you don’t claim your online listings, you could lose potential customers to your competitors, so claim all your listings, post pictures of your products and staff, update your office hours and make it easier for customers to find and get to know you.

Protect Your Brand

You’ve spent time developing your brand, and now you need to protect it. Claim your online listings before a competitor does. Remember that shady operators can also claim your listings before you do and then hold them ransom. It pays to claim all your online listings now and then monitor them regularly.

Secure Your Reputation

Almost every business has disgruntled customers or former employees. Because anyone can edit online listings, these disgruntled people may change information on your listing. Secure your reputation when you:

• Claim all your online listings
• Protect the accounts with a secure password
• Check your online listings
• Ensure the information remains correct

Include Helpful Reviews

Many customers want to know that you’re a reputable business that meets or exceeds customer expectations. Reviews are one way they can find out if you’re a good fit for them or not. Be sure to ask your loyal customers to post positive reviews on your online listings.

Maximize Customer Service

Sometimes, your customers are not satisfied and turn to the internet to leave feedback. When you stay updated on your online business listings, you can reach out to any unsatisfied customers and address their complaints. Your diligence could turn a skeptic into a loyal customer for life.

What to do Next

Now that you know how your online business listings help you, learn how to keep them working in your favor.

• Claim all your online listings. Many are free.
• Secure your online listings with a password to your online business listings to prevent anyone from changing the information.
• Perform regular updates to ensure the information remains correct.
• Add keywords that describe your business as you stay on top of the search engine listings.

Online business listings can play a role in your small business’s success. Claim your listings today and update them regularly. With these tips, you secure your business reputation and identity.

Credit cards are used by millions of consumers every day. Your small business probably accepts credit cards, too, to accept payments in-store or online. New chip-based cards or EMV-enabled cards – named for developers Europay, MasterCard and Visa – provide several safety benefits you should understand as you decide whether or not to switch to a chip reader.

Chip Cards are Difficult to Reproduce

Magnetic stripe credit cards are easy for thieves to copy. Chip-based cards are more difficult to reproduce.

There are two basic chip-based cards, chip and pin and RFID.

1. Chip and Pin cards require two types of interaction before the merchant can accept the card as payment. The user must swipe the card and enter a PIN. Thieves typically cannot use the card unless they know the user’s PIN.

1. RFID cards use RFID radio technology to transmit data through the air. Consumers don’t have to swipe the card or enter a pin. Unfortunately, this type of credit card is easy for thieves to read with an RFID reader. Users can protect their RFID card and prevent data loss with a protective covering or metal foil.

Shift in Responsibility for Fraudulent Charges

Because many new credit cards are chip-based, credit card companies like VISA and MasterCard want to encourage people to upgrade. Small businesses like yours will be liable for any fraudulent charges if you don’t upgrade your credit card processing machine.

Additionally, thieves know that non-chip-based credit cards are easier to steal. If you’re one of the last businesses on the block to upgrade, your business faces greater risk of theft.

Upgrade All Your Credit Card Readers

Depending on your business, you may accept payment only at an in-store machine. Your credit card processing company will assist you in selecting a new machine or you can buy the upgraded equipment as you reduce your risk and continue to serve your customers.

If you accept payment via phone or tablet, request a new EMV-capable reader for mobile devices. The new technology protects customer data and decreases your liability.

If you don’t accept physical cards, your small business won’t have to switch to a chip-reader. However, be prepared for more security threats since it’s easier for thieves to steal credit card numbers when they’re shared over the phone or on an ecommerce site. Consider boosting your online payment security to protect your customers and your business from threats.

Because chip-based credit cards are the new normal, it’s in your best interest to upgrade your credit card payment processing machine today. Learn more about protecting your small business and decreasing your liability when you talk to your insurance agent.

Do you have a favorite browser? If so, it’s probably because the browser is familiar to you and easy to use. Unfortunately, if your browser is out-of-date, your company is at risk since outdated browsers can include bugs, security flaws and other challenges. Consider updating your browser and improving security for your small business.

Close Security Holes

Manufacturers usually prioritize security holes and release updates that patch those challenges first. If you’re using an older browser, though, your computer could be vulnerable to malware, password theft and viruses, and your browser remains vulnerable to cyber criminals who look for easy targets. As an example, Microsoft does not support versions older than Internet Explorer 11.

Check with your browser’s manufacturer to see if security hole updates are available. If not, consider switching to a different browser.

Give Customers a More Consistent Browsing Experience

Modern customers use their smartphones to research your products, prices and reviews. If you use an older browser to design your website, it might look good to you but may not be compatible with the latest digital formats your customers are using.

Update your browser to ensure your website works properly for all users. Not only does an update create a consistent browsing experience for your customers, but it also potentially increases sales.

Improve the Internet

Every year, new web browsing features, tools and extensions are released by browser companies. Use an old browser, and you can’t take advantage of the new features. One example is a keychain tool that stores login information and secures your passwords. An old browser may also include bugs and other issues.

Upgrade to enjoy use-friendly improvements and a better internet experience. The updated browser also improves security for your small business.

Update Options

• If you decide to update your browser, take one of three steps.
  Update to the same generation. For example, if you have Firefox 46, upgrade to 46.0.1. This update is safe and reliable and includes a low learning curve since you’re already familiar with the browser.
• Update to a newer generation. Go from Firefox 46 to 47 for a safe and reliable upgrade. The website pages on websites will look better and be easier to use, too.
• Update to another browser. Switch from Firefox to Internet Explorer for a completely different experience. Even though you’ll spend a few hours familiarizing yourself to the new browser and its features and nuances, you also receive multiple benefits.

Your small business can maintain security and stay relevant when you upgrade your browser. After you take this step, be sure to check regularly for updates. Discuss additional security measures with your insurance agent as you minimize your risks and protect your business.

Your small business financial advisor assists you in maintaining a profitable business. This relationship only works, though, if you hire someone who is competent, trustworthy and likeable. Ask these 10 questions as you interview potential financial advisors.

What are your qualifications?
The right financial advisor will be educated and financially literate. Ask to see degrees and other qualifications that prove the financial advisor is capable of assisting you.

Are you certified?
Anyone can learn financial lingo. Be sure the financial advisor you hire is also certified to do the job, and ask to see the certification and any other credentials.

Are you insured?
Be sure the financial advisors you interview are currently licensed to offer financial advice. That license proves the financial advisor is in good standing in his or her field and provides liability protection.

How often do you attend trainings?
Two plus two will always equal four, but other details in the financial world change. Be sure financial advisors you interview attend trainings regularly to stay updated on trends.

Do you have a contract?
A handshake is not good enough in the business world. You and your financial advisor will need to sign a contract that outlines responsibilities, payment and other details of your relationship.

How are you compensated?
A financial advisor will be paid whether or not your business makes a profit. Find out upfront what the fees are and when payment is expected.

How often are you willing to connect with me?
You may not need to speak with your financial advisor every day, but you do need to communicate regularly. Find out how often the financial advisor is willing to meet with you and if he or she will answer email and phone calls promptly.

What’s the plan if something happens to you?
If your financial advisor retires or is otherwise incapacitated, you want to know that your account is secure. Find out if there’s someone else available for you to contact if this were to happen.

Do you have a list of referrals?
Always talk to others small business owners about potential financial advisors. Ask what they like about him or her, how often they meet and any pros and cons. With this information, you can decide if the person is a good fit for you.

May I bring a friend?
Ask someone you trust to sit in on interviews. This person can give you a second opinion and valuable insight that helps you make the best decision for your business.
Hiring a financial advisor is important for your small business’s success. Ask these 10 questions as you choose the right advisor for you.