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Thursday, July 31, 2014

Consideration of Accounting Errors and Fraud In Financial Reporting


The financial health and stability of a company. One of the main purposes of financial reporting is to provide shareholders and investors with accurate information, so they can make adequate decisions. Therefore, it is vital to accurately report financial information. Even the slightest error that may seem immaterial can have a large impact on important financial ratios. Firms should report the corrections to errors as prior period adjustments including that changes to previous period financial statements were needed. It is vital that the total values of assets and liabilities from the prior periods be adjusted for a cumulative effect. 

This cumulative effect will equal the needed adjustment to the balance of retained earnings. Some common accounting errors include mathematical mistakes, unrealistic estimations, failure to accrue expenses or revenues at the end of a period, misuse of facts, and incorrect classification. However, there is a fine-line between an error and fraud. Fraud is crime in which people or businesses purposely provide incorrect information for personal gain. Firms can commit fraud a variety of ways for a variety of reasons; it is a serious matter that ultimately misrepresents the firms financial position.

The moment a company finds an error in reporting, the error must be corrected. The company corrects errors from prior periods by making an adjustment to their retained earnings for the current accounting period. Subsequently, these transactional corrections are called prior period adjustments. When estimations are needed, it is important to use realistic and accurate numbers, so the amounts involved are accurate. The estimations that are involved with depreciation expense can be vital in the creation of their bottom line. If depreciation expense is overstated, the firms net income will be understated. At the same time, if a company understates depreciation expense, they will have a higher net income.

Consequently, estimations and non-cash expenses have a significant impact on a company's bottom line; therefore, must be reported as accurately as possible.
If a firm recognizes a change in an estimate must be made, the company must use the new, configured basis for reporting on current and future financial statements. However, no changes are to be made to prior period financial statements. Also, current period opening balances should not be adjusted due to the effects in prior periods.

If a company needs to be a change the way they are reporting entity, they must do this retrospectively. Therefore, the firm must restate their financial statements of previous periods. They must also provide the reason and nature of the change and the changes effect on the bottom line and earnings per share for all prior presented periods. 

When a firm needs to change their accounting principle, they must do this retrospectively. A change in accounting principle is when a firm changes from one generally accepted accounting principle to another: for example, if the United States were to adopt International Financial Reporting Standards, companies would have to retrospectively change their financial statements that they recorded under Generally Accepted Accounting Principles. Therefore, if a change in principle occurs, a company must change their financial statements for all previously presented periods. 

The year that the accounting principle occurs, the company must disclose the effects of net income and earnings per share that occurred during the prior periods. An adjustment to the retained earnings balance in the earliest presented year also needs to be completed. If decides to change from FIFO to LIFO it is impractical to determine the occurring effects during the previously recorded periods. Therefore, the company is not to change income from previous years. For all subsequent LIFO computations, the firm must use opening inventory for the year the method is adopted as the base year inventory. Finally, the firm must disclose the occurring effects and specify the reasoning behind omitting the computation of the cumulative effect and proforma  amounts.
There is a fine line between an accounting error and change and committing the crime of fraud. Firms and individuals usually commit fraud for the financial gain. Therefore, fear of losing your job, difficult financial goals, personal bonuses, and to maintain financial performance are all factors that come into play. For example, it is two days away from the end of the period and you are only a few sales away from earning that big bonus, but it does not look like you are going to get there. So, you decide to make a deal with a close contact to buy some inventory which you will buy back after the period. 

This is an instance of misrepresenting sales in order to get paid which is fraud. As you can see there is a distinct difference between an accounting error and change in relation to fraud. Errors, changes, and fraud are major components of the accounting profession. Fraud should try to be prevented proactively through internal control, while errors and changes should be dealt with either prospectively or retrospectively.

Wednesday, July 30, 2014

Should You Work Coworking Environment

They people doing freelance work, working for themselves or working in small business start ups, there are more people than ever without an office space in the traditional sense. However, what if you are someone who finds a more social atmosphere is the most productive? Many people find a traditional office environment to be the most beneficial way to work easily, without the distractions of home or a public area.

The term was "co working" first launched in 1999, by Brian DeKoven. In the same year, one of the first studios opened in New York City, called 42 West 24. Then, in the UK, the first co-working space wasn't opened until January 2005 in London. However, the term only became popular in March 2007, when it was trending on Google Search. Soon afterwards, in October 2007, it was listed as a term on Wikipedia.

Since then, it has only expanded in popularity and many offices have been founded. It is easy to understand why the demand for the spaces has developed so rapidly, as there are many positives. The pros easily outweigh any potential cons.

Pros

In starting up your own business beneficially, it is paramount to create connections and utilise networking to succeed. This is one of the main pros of a co-working environment - everyone you meet and work with is a potential network connection, or even a client. You meet dozens of people simply through working alongside them during your normal day.

Asides from networking, the people you work with in a co-working space can benefit you and your business in another way. Ideas people thrive in a situation where you can bounce ideas off others, as it creates a more stimulating environment. Other people and businesses are willing to help you out, and often an exchange of services can be given. For example, a website designing business may work in the same space as a marketing business, and they could compliment each other by exchanging certain online services.

In a co-working office space, there is an existing sense of community. This creates a certain feeling of belonging, which you wouldn't necessarily get from working alone or at home. Your colleagues become your friends, as well as associates, which is one of the most enjoyable factors about traditional office work. It also creates the opportunity to still participate in work events.

Cons

As with most things, there are downsides - yet, there aren't a lot of cons. However, the one recurrent negative seems to be the noise levels, particularly when someone appears to be persistently loud. If a space is too noisy or crowded, it can become difficult to concentrate and work to the best of your ability. Although, if everyone in the office understood the necessity to keep the noise level at an acceptable level, then there wouldn't be a problem.

The only other negative I uncovered is the feature of messiness in a co-working environment. This is something that can't easily be avoided in any work office space situation, and you may often find yourself guilty of slacking off your cleaning duties when there's work waiting! A factor that's similar and does relate to co-working, however, is the concern with who provides the general amenities, such as toilet paper, washing up liquid, milk and teabags. Each space is different, but in general it is the facilitator of the particular space who takes care of those things.

Conclusion

Yet, despite those, one of the main positives of a co-working environment is that it creates freedom for you and your business. The hours are more flexible than your typical nine-to-five, and, if you work for yourself, you can pick certain days to work in the space and other days you can work from home. The point is to be flexible and help each business succeed in their individual way.

Ultimately, co-working is all about the people, who become your friends and motivators in your business. The spaces are generally open and designed to enhance productivity in this professional environment. You have the freedom to interact and generate social and professional encounters, or simply choose not to.

Co-working is a far more stimulating environment for freelancers and small businesses, rather than working from home. The interaction and sense of community generates productivity, collaboration and resulting success for everyone involved.

Here at Bright Yellow Creative Group, we work in a co-working office space as part of a growing business of coworkers called Indy-cube. There are several work-spaces available through Indy-cube, all throughout South Wales currently. 

Tuesday, July 29, 2014

Manage Leadership Capability Practice And Theory

Summary of article key points:

Leadership is more about practice than theory, even if theory can inform some relevant insights as part of a leadership development programmed.

Leadership is a blend of art and science. Some leaders are born / per-equipped better than others (nature), but intelligent training and development (nurture) can enhance virtually any one's leadership capability.

Theories and models have a use, but only to underpin "practice" in leadership and real world outcomes.

Functional skills and previous performance are no guarantees of future leadership capability.

You will only get the leadership qualities that you select and train for.

The cost of promoting without leadership skills and then desperately seeking to equip people with adequate leadership skills can be high in human and economic terms.

Well-designed internal leadership academies can help when they match enhanced leadership awareness and capability to actual business needs.
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Main article:

For centuries much has been written about the "science" and the "art" of leadership.

Most of us have read and absorbed elements of this wisdom (and too often perhaps some of the come and go fads rather than wisdom). Many of us have subsequently pondered that age-old question about leadership; "are great leaders born, or are they made"?

Based on our experiences we have found that effective leadership capability tends to arise from a little of both in terms of settling that 'nature versus nurture' debate? Sabre's recent work on a number of high-level leadership academies (including one that was integral to the Coles turnaround) has confirmed that whilst there are many valid theories and models for the "science" of leadership, it's often the "art" of leadership that still evades adequate capture and definition.

Many businesses simply don't get it right, but it's reassuring to see those that do reap the positive rewards that flow so evidently from putting in the effort.

It is certain that nature does equip some people better than others in terms of their leadership traits (from a genetic, neurological and thence a behavioural perspective). There are those who just seem pre-loaded with healthy measures of IQ, charisma and also enough EQ to meld it all together in a way that gets their people to where they need to be.

Arguably though the honing of these skills that may at first glance seem to be gifted from "nature" can be attributed in at least part also to a degree of "nurture." For example, the development of complex neurological systems and patterns that drive much of our behavior (social systems of the brain, core belief patterns and embedded personality) can be traced to responses to external stimulus over the course of a lifetime.

It is however equally certain that proper approaches to 'nurture' can be used to raise the bar for virtually anyone who wishes to play the leadership game by enhancing awareness of their own strengths, areas of struggle and weakness as they manifest day to day.

Discipline is then required to act upon those insights of self-awareness to help cultivate better leadership capability for their own personal and professional circumstances.

One thing we often see is that being gifted in a particular functional skill or specialization, even to the point of genius, is no assurance that you can then lead a group of former peers in that field (or indeed any other).

Regular experiential "practice" of leadership comes into play as a valuable tool for enhancing the quotients of leadership talent that are gifted or acquired from our own recipe of nature and nurture. In the cut and thrust of day to day work life we don't always have adequate time to discern the true source of, and impact of our leadership and team role styles.

Current research and models from such emerging fields as neuroscience confirm some leadership theories and debunk others, and are often very useful in framing approaches and delivering ongoing insight. They are at the end of the day however just more tools for the toolbox, with leadership capability itself something that needs to be lived and developed day to day and powerfully linked to real world outcomes.

One of the clearest examples that I have observed was in the military when being selected for and subsequently entering into Army Officer training. Now whilst not all attributes of military leadership are relevant to commercial or non-military endeavors, it's safe to say that many are with respect to the human dynamics of leadership (particularly leading amidst complexity).

For Officer selection the emphasis was first and foremost upon personal leadership capability (and the potential to hone it further for a military environment). It was only much later after rigorous training in general military skills and leadership that relevant specialist streaming was done into various specializations and functional skills.

In commerce the reverse is often the case, where people are selected and promoted firstly with their "functional" skills and credibility strongly in mind (e.g. a great engineer, lawyer, stockbroker, salesman) with their leadership skills seldom given the same rigorous analysis as their functional results.

The Officer selection process was designed to reveal "leadership" potential first via a careful blend of psychometric followed up with a host of mental and physical challenges that were rigorously observed by an experienced leadership selection panel. Their emphasis for selection was first upon core leadership traits exhibited under pressure, and the potential to polish those.

It was only much later that the aptitude for possible functional roles was to be explored. Functional experience and past performance, whilst taken into account if it was present, was never taken as an assurance of future leadership capability.

In commerce the best and brightest performer in a functional sense may not be the best person to lead a team of their former peers (unless they have been equipped by nature and nurture to lead also). The skills for leadership often exist outside of our functional skills, and are deserving of attention.

The military naturally values both individual leadership capability, and functional proficiency in an Officer's chosen trade post graduation (e.g. Infantry, Armour, Artillery, Intelligence etc), but the term "General Service Officer" is used to describe Army Officers upon graduation, and is used to imply that it's the "Officer" bit (your designated status as a leader) that comes first, and any functional / technical proficiency that may come later is second.

So much so that in theory any General Service Officer can be moved to or seconded into to virtually any military role or command should it be required of them. Of course you won't get far, or get much respect form peers or subordinates if you don't have some credible functional capability also, but the foundation is first your personal "leadership brand" which can be transferred into almost any other challenge.

Again, the military doesn't always get it right, but there is much to be said for the "leadership first" approach given to seeking and honing "Leadership DNA" as part of the overall process of developing organizational leadership talent. This in tandem with functional capability is ideal. Both matter, but the "personal leadership capability" bit is often overlooked in commerce (or considered as a clear second to ticking all the boxes on functional results and skills).

We have all seen people who are highly adept specialists in their given field (e.g. engineer, lawyer, doctor, stockbroker, IT professional) given leadership roles after getting runs on the board functionally speaking, without necessarily coming equipped with the requisite inter-personal and leadership awareness to handle the "non-functional" challenges of leadership.

Even being a respected genius at your chosen trade, does not ensure that you may end up out of your depth when asked to lead a cohort of your former peers (unless you have the "leadership bit" sorted first)?

The low morale, high turnover, friction and inefficiencies that can arise from poorly lead dysfunctional teams costs a great deal in both personal and economic terms This is where teams that on paper may have fall the boxes ticked for functional brilliance with their professional skills, experience and qualifications can simply fail through poor leadership and poor teamwork.

In a military environment the price paid for this is often instant, but in business it' can be slower and more insidious, but the outcome is the same, your team takes casualties and loses.

The ideal package for a leader is perhaps having enough functional proficiency to establish credibility, whilst also ensuring that they have been given ample opportunity to properly explore and develop their own leadership capability before being advanced to lead others. There is thus far less chance of being caught out of their depth in the all-important "leadership bit".

So how can business get the balance right?

It is our assertion that businesses can 'cherry pick' from the very best of the military approach by carefully designing and delivering their own internal leadership academies to target existing and emerging leaders. This enables people to build and develop upon existing leadership skills within the critical context of what they actually need to do and deliver within the business.

Time taken "outside" of the business, but very much "about" the business can really pay off when leadership development is tailored to meet business needs.

We have been involved with several wonderful examples at Coles where senior leadership skillfully identified a need to design a series of highly tailored leadership academies for enhancing personal leadership capability. This is one of the few examples where we have seen a company achieve such a wonderful balance of leadership capability development wedded to real world needs and outcomes.

Coles recognized leadership capability development as a key factor in itself and that it was by "practicing" it in tandem with cutting edge theory that worked best. It was our privilege to be invited to work with Steve Robinson and Dr Malcolm

McGregor who were brought in by the Boards of Coles and Wesfarmers to craft the overarching strategy for these approaches.

An enormous amount of design work was done to ensure that every aspect of the Academy would hone and develop each individuals leadership capability, but very much with the business in mind and putting valid personal insights immediately into practice.

The blending of theory and practice in facilitation was done very carefully to ensure constant linkages back to a leader's daily planning, interactions with their own teams and daily execution. The careful and intelligent exploration of personal leadership styles was matched to personal leadership plans and real world business scenarios. This was all within an environment that focused meaningfully upon people taking responsibility for and ownership of their own development and the impacts of their behavior (in both tailored simulations and shared real world case studies).
Participants were existing leaders within the business, and emerging leaders with high potential who were engaged in meaningful pre programme diagnostics followed by an intensive 7 day residential programme with targeted follow though, mentoring and coaching back into the business.

Theory was carefully linked to real world and business case studies were used throughout and the targeted experiential content was linked powerfully and intelligently to individual profiling and learning. Leadership was lived and "practiced" throughout.

All approaches used were of sufficient complexity and sophistication to meaningfully engage intelligent leaders (there certainly weren't any tacky reality TV show rip off team games or treasure hunts). This is very much along the lines of what most successful military academies embrace, and that is to take the time to properly select leaders then develop and hone personal leadership capability itself as a powerful enabler for better functional capability and success to follow.

Some well selected theory is fine, but at the end of the day it's all about putting it into practice.

This was reflected in the outcomes that ensued for the many alumni of this Coles academy, and the turnaround demonstrated by Coles as a company and as a brand.

Yes there is a price to pay in terms of taking key people outside of the 'day to day' business for a time, but it's important not to forget that ongoing development of leadership capability is still very much "about the business" when it's done well.

Investing in leadership capability in this way removes the "lucky dip" approach of selection primarily for a person's functional skills, then finding out all too late that real world productivity and lost opportunities has been caused by poor leadership that transfers into low performing teams.

Monday, July 28, 2014

Five Important Contract Provisions To Save Your Business


The following five Contract Provisions will undoubtedly help save your business future headaches! While no contract provision can be guaranteed to be enforceable, following some basic principles of use will dramatically increase the odds. Of course, your business won't get any protection without using them in the first place.

1. Warranties

You may or may not want to include specific, express warranties for anything you sell on your website. There is no law requiring you to give any written express warranties to your customers. Although, you can unwittingly make an express warranty through any ads or written materials contained on your website.

But, there are also implied warranties. Certain warranties arise automatically under the law or are "implied" unless they are specifically disclaimed in a written agreement. To avoid the possibility of providing an implied warranty, your contracts must include a disclaimer waving these warranties in a conspicuous manner. A conspicuous manner means that the disclaimer is set off from the rest of the contract by all capital letters, bold type, or a different color. The type cannot be smaller than the surrounding type in the contract.

A written statement regarding the "As-Is" or "With All Faults" nature of the product (or actually disclaiming the implied warranties by name) is sufficient. Internet businesses may use a clearly-labeled hyperlink such as "IMPORTANT WARRANTY INFORMATION" to lead to the full text of any warranty. Also, the warranty should be presented in a way that is capable of being preserved, either by downloading or printing.

Implied warranties could include a warranty of title (seller owns the goods, has the right to sell them, no creditor will interfere with buyer's purchase of the goods, and the goods are free from copyright, trademark, or patent claims of third parties), a warranty of merchantability (goods are reasonably fit for the ordinary purposes for which such goods are used), a warranty of fitness for a particular purpose (seller has reason to know of the purpose for which the goods are bought and knows that the buyer is relying on the skill and judgment of the seller to select the goods) and a warranty arising from course of dealing or trade usage (a court presumes both parties have knowledge of trade custom and presumes that custom is intended to apply to the contract). These warranties apply equally to services and goods.

Not all states will allow you to disclaim all implied warranties if you sell goods online. But, you should still disclaim all implied warranties in writing in your terms of sale. (You should also understand disclaiming implied warranties will not shield your business from liability for any injuries caused by a product sold from your website). Without this provision, the goods or services provided under the contract will be warranted with the express warranties arising from what your company states on its website and with the implied warranties provided under state law. Reducing the uncertainty this creates requires a warranty disclaimer.

2. Limitation of liability & Damages

You may limit or alter the types of damages normally recoverable by your customers. Customers may suffer damages if your business breaches any of the terms of sale with a customer or any warranty or if your business is liable for any product defects that cause any injuries. In those cases, the customer would be allowed to recover damages reasonably foreseeable or "within the contemplation of the parties" at the time of contract formation. This means your customers can suffer "direct damages" or the damages that you would expect to occur from the breach, such as cost to repair or replace a product. However the customer may also suffer "consequential damages" (also sometimes referred to as indirect or "special" damages) which encompass all damages that aren't either direct or incidental damages.

Expenses incurred by your customers in connection with enforcing available remedies are "incidental damages." Any lost profits or revenues suffered because of failure of the product are consequential damages. This is a factual determination that could lead to your customers being able to collect a large amount of damages above and beyond the simple cost or value of the product. If you don't limit your damages contractually, your customers may be entitled to collect any and all foreseeable damages.

TIP! Always limit damages to the cost of the item itself or replacement of the item and also have your customers waive their rights to collect lost profits or any type of incidental or consequential damages!

Not all courts will honor these limitations if they feel they are unfair to the consumer (I.e. "unconscionable"). For instance, limitation of consequential damages for injury to the person in the case of consumer goods is unconscionable on its face, but limitation of damages where the loss is commercial is not. Most courts generally uphold limitations of liability and you should always include them anyways. Damage costs that could be recovered include direct damages, which are damages that are a direct result of what happened, like medical costs or property damage, and indirect damages. Indirect damages are those that are not directly caused by the other party but that are incurred because the party was injured. 

Some states have laws that require a disclaimer of liability in a contract to be conspicuous within the contract to be enforceable. For that reason these provisions should be in all capital formats, bolted, set in a larger font than the surrounding text, or otherwise distinguished from the rest of the contract. You also may want to limit the time frame in which the consumer may bring a claim. This greatly decreases the likelihood of a claim being filed.

3. Include An Attorney's Fees Provision

Always include an Attorney's Fees provision in your terms of sale. This clause creates a right to recover costs and expenses paid by the party that prevails in a contract dispute. The way this clause is worded, the costs and expenses are not limited to those paid in a lawsuit-the costs and expenses incurred in any contract dispute could be recovered. This provision is thought to discourage frivolous lawsuits because the party filing a lawsuit risks payment of the other party's legal costs if the suit is lost.

4. Using Forum Selection Clauses (Venue)

I have had numerous clients ask me about forcing their customers to settle any future disputes in a specific location. This is a type of contractual term known as a "forum selection clause" (or "venue clause"), which more or less binds the parties to litigate in a specific jurisdiction. You can and should use a forum selection clause on your website user and product purchase agreements. They are not illegal and can even be justified from a business standpoint. They are used to avoid costly and frivolous litigation. Since these clauses can be extremely valuable, you should understand how to effectively use them. Assuming the terms were validly accepted and proper notice of the terms was given, these types of provisions generally are just as enforceable as the underlying agreement.


TIP! You must also make sure that "notice" that this specific type of provision exists in the contract is provided to the user. This requirement has been relaxed by the courts quite a bit recently, but I still recommend using bold font, 'all caps' or a larger font for your forum selection clause so it stands out from the rest of the agreement.

Sometimes contractual provisions can overreach and be so unreasonable that they are declared null and void by a court. These are sometimes known as "contracts of adhesion." This type of contract is basically an agreement where one side holds all the bargaining power and uses it to write the contract primarily to his or her advantage. This is really how many Internet businesses improperly use forum selections clauses. Understanding how forum selection clauses might overreach and be unreasonable is obviously very important to your Internet business. Basically, the courts won't automatically honor provisions that require the consumer to waive some right.

An unreasonable forum selection clause may also violate publi
c policy. This typically occurs when a particular state has a strong interest in regulating a particular industry or in protecting a certain class of persons. State courts have various approaches in determining the enforceability of forum selection provisions. If a party opposing the forum selection can demonstrate extreme inconvenience that was not foreseeable at the time the provision was negotiated, some states will reject it. But, usually the opposing party has to show that a heavy burden would be imposed if they were to litigate in that forum.

Additionally, for a forum selection clause to be upheld, the parties must use language clearly indicating that the forum selection clause excludes all other courts in hearing any potential dispute. A few states refuse to enforce forum selection provisions altogether (such as Idaho and Montana) while others limit enforcement with respect to certain types of contracts.

The following case summaries illustrate some of these principles:

Fee v. Expedia Inc.- Zachary Fee sued Expedia, which operates the travel website Hotels.com, for deceptive trade practices. Fee alleged that Hotels.com switched the plaintiff's paid reservation from a four-star hotel to a three-and-one-half star hotel. Fee brought the lawsuit in the state of Kansas. But, he agreed to a forum selection clause contained in the click-wrap agreement that required all suits to be filed in Texas. The Kansas court dismissed Fee's lawsuit since the click-wrap agreement on hotels.com required Fee's lawsuit to be brought in Texas, not in the state of Kansas. The forum selection clause used by Expedia was simple and straightforward and only required that all claims basically be heard in the State of Texas. 

Olmsted v. Dell-The plaintiff brought a class action lawsuit in California against Dell, Inc. The plaintiff asserted that Dell designed, manufactured and sold defective notebook computers in violation of California consumer protection laws. Dell's website required purchasers to accept a click-wrap agreement that contained a forum selection clause. This clause required all lawsuits against Dell to be filed in the State of Texas, but it also required consumers to waive their right to bring a class action suit against Dell for any reason. The California court refused to enforce Dell's forum selection clause. The difference in this case is that Dell not only required consumers to litigate in Texas, but the company's click-wrap agreement also required consumers to give up a fundamental right to sue as class action litigants. The court found this to be overreaching. 

5. Choice of Law provisions

Choice of law provisions usually also accompany forum selection clauses. They really go hand in hand, although choice of law provisions can stand alone. This type of provision specifies that the laws of a certain jurisdiction must be applied by the court hearing any dispute. The particular court hearing the dispute will apply the law of the state the court is located in (the forum) unless there is some conflict, such as when an out-of-state consumer sues an Internet business. The court may also apply a different state's law if the contract calls for specific laws to be followed. 

Modern courts follow the rule articulated in the Restatement (Second) of the Conflicts of Laws. It provides that choice of law provisions are presumptively enforceable as long as there is some relationship between the transaction and the state's law that would govern, or by another reasonable basis for choosing a particular states' laws. 

The Restatement basically recognizes there should be no limitation on the power of the parties to incorporate foreign law into their contracts. Under Section 187(2), the express choice-of-law made by the parties is still recognized "even if the particular issue is one, which the parties could not have resolved, by an explicit provision in their agreement directed to that issue." But, there are three exceptions to Section 187(2). First, the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice. Second, misrepresentation, duress, undue influence, or mistake secured the consent of one of the parties to the inclusion of the provision. Third, application of the state's law chosen would be contrary to a fundamental policy of the state that would be able to apply its own law but for the choice-of-law provision. 

Besides the Restatement, the Uniform Commercial Code (UCC) also allows the parties to a commercial contract to choose the applicable state law, so long as the transaction "bears a reasonable relation" to the state chosen. See UCC Section 1-105. (The UCC is followed in some form in all 50 states). Thus, the general law in the U.S. is that parties to a contract may choose the law of a particular state to govern the contract, and that the courts will uphold the choice. 

TIP! Most businesses online should simply require disputes to be heard under the laws of the state they are physically located. This is valid since there is already a relationship with the state. Also, selecting the laws of your home state is advantageous since your business is operating under these laws already. If no state law is designated, a court will typically interpret the agreement under the laws of the state where either party is located, or where the contract was performed or signed. 
 
Forum Selection/Choice of Law Lessons:

1. Always use forum selection clauses to avoid frivolous and costly litigation in some distant state;

2. Keep your forum selection clause simple. Don't restrict "fundamental" consumer rights, such as a consumer's right to initiate a claim against your business or initiate or join a class action suit;

3. A straightforward clause selecting the forum for any potential litigation and the choice of law should be simply used and no more. The language should be simple, yet crystal clear and should state the chosen forum is the exclusive forum that any and all disputes would be heard;

4. Finally, there is no guarantee any forum selection clause you use will be upheld. As stated, even if it isn't
unreasonable, the clause may violate the public policy of some state.

This article was written by Philip A. Nicolosi, J.D. Mr. Nicolosi provides legal services through his law firm, Phil Nicolosi Law, P.C., focusing on startup and small business law, Internet & technology law and commercial transactions. 

Mr. Nicolosi serves as a trusted advisor to numerous start-up and small to medium sized businesses. This includes representation for a wide range of business law matters including business organization, corporate/LLC governance, regulatory law, contracts and transactions and most other matters outside of litigation. Mr. Nicolosi provides guidance with e-commerce, Internet marketing and technology-related legal matters. 

Sunday, July 27, 2014

Traditional Telemarketing Risk



It's important that you can back up what you are claiming you can do for a prospect when telemarketing. Calling and saying we can save more time or we will reduce your cost is not a compelling proposition. It is even weaker when you do not go to the trouble of getting material together that proves your statements.

The value proposition newer, better, faster, cheaper provides no valid business reason to meet. We have heard it all before usually every day by every company that calls, writes and emails us.

Prospects avoid salespeople, so unless perceived as someone different you will be put in the same box as all the other sales executives that call.

The answer is simple: give them a compelling reason to listen to you. Compelling information is the answer to this problem that many do not take the time to refine and develop.

If your reasons for contacting a prospect are not powerful enough to move someone to a point of interest or action, your prospecting will never be strong. Information is the key to success in most selling situations and prospecting is no different.

What you are selling is of no real interest to the prospect, what they can get from a meeting with you is. If a prospect can get information they can use, that gives them a strong reason to arrange for you to come and see them. 

Other professionals feel that merely stating the product or service they provide, and talking about the benefits they offer will get them an appointment. If you are selling IT solutions, insurance, advertising, marketing services, web design, training, financial or legal services, software, commercial real estate computers or one of millions of products and services consider this. 90% of your prospects have no interest in your product or service. 

So if you think that simply telling a prospect what it is you sell is enough to stimulate interest, think again.

If you give a prospect information they can use this improves the communication between you and your prospects and clients. This is because you both benefit from the start rather than the prospect feeling he is doing you a favour by meeting with you. You are also building trust by putting you best foot forward (your expertise). You can blow your competition out the water by showing your clients that you are the top experts in your field.

Saturday, July 26, 2014

Commercial All Risk Insurance For Business

All businesses need commercial risk insurance. Without this safeguard, businesses are at significant risk and can even face financial ruin without the protection that insurance affords. "Risk management is critical for every business,and being prepared for risk--whether from a force of nature, new government regulations, or something else--can be the difference between success and failure (2)." Understanding the ins and outs of commercial risk insurance is essential for any business that wants to protect itself against unforeseen risks.

Overview of Commercial Risk Insurance

Depending on the nature of a business, a company or organization must procure insurance as required by the law. Yet often the minimum insurance isn't enough to offer all the protection a business truly needs. Businesses face all kinds of risks. Storms can wreak havoc on physical property like buildings and even servers. Sensitive information might be stolen resulting in an expensive law suit. Risks can't often be foreseen, so having insurance policies in place that protect the business once events come to pass is the only reliable solution for a responsible business.
 
Of course, there are many commercial risk insurance plans. Policies can be tailored to meet a business's specific needs. In some cases, a business needs to heavily protect its physical properties (1). In other cases, a business might need to protect against liabilities associated with its industry. For instance, employees might face certain on-the-job risks. A commercial insurance provider or insurance adviser can assist organizations as they try to determine the nature and level of insurance they need to go forward.

Types of Coverage Packages

Businesses should consider all different types of insurance packages and coverage. While your insurance provider will be able to go over each specific types of coverage, generally businesses must examine policies for professional liability, commercial property, insurance for directors and officers, media liability, cyber liability, workers compensation, fiduciary responsibility, and specialized policies designed for specific business features. Not every business needs all these types of insurance; however, your expert insurance advisor can help you decide which you need based on the types of risk your business faces.

Insurance as an Essential Investment

Businesses face substantial risk by failing to carry commercial risk insurance or carrying too little insurance coverage. Carrying insurance is a business expense that cannot be ignored. New or small businesses may not always understand the risks that face or how much insurance they should carry. An adviser can even help you determine if you need interrupted business insurance. If something happens to your business--a fire, for instance--you can be compensated for lost profits.

To obtain the commercial insurance your business needs, it's important to work with a provider that can give you the expert insight you need to make the best insurance decisions for your business. Many businesses choose to work with a single insurance provider so they can obtain discounts on the policies they procure. Be sure to investigate the ins and outs of each policy.

Friday, July 25, 2014

Benefits From Digital Signage - Endless Possibilities


The first consider the low-hanging fruit that makes dynamic menu boards so effective for restaurants. According to Nelsen's third-quarter (2013) Digital Place-Based Video Report, ad recall for POS-type digital signage is typically in the 60% range, which is more than twice the average recall of static signs-menus or otherwise.

This is the reason you can so easily recall the rich color of a creamed latte topped with cinnamon spice at your local coffee shop. Or, depending on where you dine, maybe you can easily recall dynamic advertising for the most awesome, juiciest pub burger that can fit in the mouth of man. I saw such an ad not long ago and it just keeps playing in my memory like a favorite song.

Such recall makes it a natural choice for promoting those more seasonable and profitable food items at the right time and place. According to a Networld Media Group report, Digital Menu Boards and ROI, the average sales lift of any digitally promoted item on menu boards averages around 3-5%, which means that payoff for such a system most often occurs in one year or less.

The restaurant market definitely benefits from digital signage, although the possibilities only start with ROI and grow from there. Improving the customer experience is also about a return on objectives (ROO). Case in point: Medicine Eat Station in San Francisco. This upscale downtown tofu shop is using digital signage for ambiance. The integrated sign system creates the atmospherics of "living in harmony with nature" that is accentuated by 4 vertically rotated 42" plasma panels built into the wall of the eating gallery. To accomplish this, high-definition video footage of the Rocky Mountain landscape is used for real-time imagery. 

The programming lasts for about an hour before it repeats. At first glance, it appears to be a still image. But wait, this is real-time imagery, meaning that the clouds slowly cross the screen. A 4,000-year-old Bristle Cone Pine occasionally wavers in the Rocky wind. Light and shadows change constantly, as if you are really there.

This is a great example of ROO, but unfortunately digital signage used as a canvas for art really hasn't caught on yet. It is by no accident that Medicine Eat Station built this to look like one giant window. It is very cool to experience, meaning that it adds to the purpose of customer satisfaction, just like ambient music, lighting, colors, etc.

Money managers are already pounding their fists, shouting, "Where's the ROI!" Of course, it's possible to occasionally slip in an advertisement on the example above, but this might be detrimental to the return on objectives and may compromise the result. Digital signage is not just about sales lift; it's also about creating a return on objectives. ROO creates a value that cannot be counted in terms of dollars and cents directly. However, ROO leveraged wisely does produce ROI.

Many more POS digital signage opportunities are possible for food and beverage venues. Imagine if you will these scenarios:
  • A sports bar with digital screens showing "this week's sports highlights" via pictures, video replays, etc., is a
natural place to present promotions to a viewing audience already buying food and beverage. This kind of content adds to customer satisfaction and experience and is available through readily available prepackaged syndication.

  • Engage patrons with an on-screen sports trivia experience (or any other trivia for that matter) that encourages participation by offering a coupon for the right answer. This can be done by using a QR code to facilitate the "answer" to the on-screen question.

  •  In a QSR setting people are often interested in news, sports, and weather. These interests can be satisfied with existing TV programming and mixed with on-screen ticker announcements, such as today's special, menu promotions, seasonal sales, etc.

  •  How about a trendy restaurant that displays works from local artist. The LCD monitors hang on the wall with picture frames wrapping them. Maybe patrons vote on the best art. Owners could join forces with local art schools, art societies, and public support groups. Ultimately, this could tie-in to customer satisfaction and experience. Who is not uplifted by good art, and for that matter, good food?

  • In downtown districts, many restaurants depend on people walking buy. Instead of using posters turning yellow on windows, why not project clear and crisp digital images directly on the window! The technology exists but hardly anyone uses it. The projector cost is about the same as a large LCD screen, although projector bulb replacement would add to maintenance costs. If that's a major concern, then laser projectors are an alternative with much longer maintenance cycles. These images could be today's menu special, happy hour enticements, a new menu item that you can almost taste, a soothing cup of fresh ground coffee on a chilly morning, or just good old branding that reinforces quality services, etc.

  • Now let's turn to the nightclub scene where people are hopping and bopping on the dance floor. Bizarre curved screens are splashed like clouds above them with computer-controlled graphics flashing to the beat. During breaks, projectors are switched over to digital signage where various branding and POS offers are made.

Wednesday, July 23, 2014

Successful Marketing For All Starts Business



The basic concepts of effective marketing but is not the product or service. Forget or ignore this fact at your peril. So many marketers worry because they lack a spectacular new product or service to sell, when what they should be doing is focusing on their chosen marketplace first. A marketplace is just a group of people who buy certain types of products or services, and they're reachable through specific media -- specialty magazines, TV ads, email lists, or whatever.

The marketplace will tell you what it wants. For example, golfers want to shave points off their scores in the fastest, easiest way possible. Therefore, they buy all kinds of gadgets so they can show off to their buddies and be heroes out on the links. There are different schools of thought about which type of club can help you lower your score the most. Some people say, "You've got to drive farther," while others say, "Drive for show, putt for go." Whatever your specific school of thought, in the end, it's all about lowering your score and impressing your friends -- and finding a faster, easier, less painful way to get that result even quicker.

These are matters of the heart -- of emotions -- and those who serve the golfing market best are in tune with these matters. Like all the most successful marketers, they start with the marketplace first, paying close attention to the kinds of items that are most appealing. If you focus on those things in your market, then you can be a so-so copywriter and still get wealthy -- because you've homed in on those key areas that you know are red-hot.

If you can't find an unfilled niche that people actually want filled, then look for the most appealing items in the market first -- i.e., those that sell best. If you focus only on trying to sell those types of items, you won't waste your time beating your head against the wall, trying to sell things that only excite or interest you. You'll be alert to what excites your marketplace, and now you can create something even better than what's already out there. This will help you understand your specific niche market and pull you even deeper into that niche, because as I like to say, there's riches in niches.

Always start with the market. I'm repeating that already because it's so important -- and most marketers just don't get it. Look at the people who comprise that market, and note exactly what they're buying. Let the market tell you what direction you should go, and you'll rarely, if ever, spin your wheels trying to sell them something nobody wants to buy. You're going into a market you know is full of eager, rabid buyers. You're going to improve the wheel just enough to make it a little better than what your competitors are offering, and grab some of that market in the process.

It's all about understanding what people want, and then developing products and services that appeal to that specific marketplace. Start with their biggest desires; what does the marketplace want the most? Then develop products and services that give it to them. 

That's one of the reasons I like information marketing. If you sell widgets or anything else you have to manufacture, whether it's a bottle of water or a dining room table, there are certain limitations on how you can market it and how you can go about creating products. But when you're an information marketer, there are all kinds of ways to create information. It could be as audio CDs, DVDs, books, reports, digital media, or any number of other delivery mechanisms.

Tuesday, July 22, 2014

Physical Appearance For Qualified Job Applicants


Many peoples Job search is more competitive than ever with more people looking for work then there are jobs, you will need as much of an advantage over other qualified job applicants as you can get.

With much emphasis put on your resume, qualifications and job experience, sometimes there is little thought on overall physical appearance. Now I do not mean whether someone has showered before the job interview or, making sure they have clean clothes on no, I mean your overall physical appearance.

In other words, if you go into an interview for instance 45 pounds over weight that may have an impact on the employers decision to hire you. That may not always be the case as that does not mean that someone does not have the skills to be an effective employee, it may come down to a question about your overall health status and discipline.

Yes in today's world, there are still employers where this may mean the difference between someone getting the job or not. If there are other applicants that are just as qualified, they may have a tendency to go in another direction.

Now we all understand that discrimination of any kind is not acceptable but, let's be clear, it still takes place in some instances.So what do you do about it? If you know you have a few pounds you can afford to lose and your doctor has brought it up as a medical issue as well, it will serve you to begin getting proactive in an effective exercise program that involves resistance training and proper food choices.

If you know that you will be searching for a job in the very near future or, looking to change careers, it pays to put some time and a few dollars into looking your very best. Anyone can go out and buy fancy clothing for the interview but, getting yourself into sound physical conditioning will be more of a challenge.

If you are not sure where to start your new physical transformation, you may want to consider going down to your local fitness center and hiring a personal trainer. Let them know what you plan to do and what your goals are.

It's much easier to make the changes you need to be successful when you have someone helping you along the way by saving you time and frustration.

Taking the time and energy to be in the best physical condition you can be in at any age will tell your employer a lot about you and, also will help in keeping you physically fit so that you are productive and have the energy to succeed.

So remember, those first ten seconds you meet a prospective employer can mean the difference in you getting hired or passed over for someone else when it comes to your overall Important physical appearance.

Sunday, July 20, 2014

Technology Of Infrared Thermometer

Infrared Thermometer is a device that is used for identifying temperature without touching the object. It can be useful in measuring temperature in objects that are far away, hot or small. Generally, these devices are used in areas, where the normal thermometers cannot be used. This particular device is available in a number of shapes and sizes and sometimes, they might touch the objects for finding its temperature. It is used in a number of applications and is used in a number of industries too. Also, the temperature of an object is measured in different ways with this device and details about some of these ways are given below:

Brightness sensor: Brightness Sensor is one among the many different types of this equipment. A single wavelength is used by this type to identify the warmth in an object. The measurement is done based on the amplitude of the IR Energy, which is radiated by a specific device. As this type uses only a single wavelength, it is somewhat hard to obtain a precise reading.

Multi-variant sensor: Multi-variant sensor is another type, wherein different wavelengths can be observed. This model is highly popular for its precision and accuracy in reading. 

Ratio sensor: This model is known to calculate two varied wavelengths. Due to this technology, this model can ensure accurate reading even when there is obstruction. Different devices make use of the above-mentioned technologies and the handheld device that looks like guns is among the most commonly used devices. Nowadays, there are professional companies dealing with different types of this device and there is a model called stick type, which is used for different applications. This compact size can be carried easily in pockets. Here are the details about the different uses of this device:

Medical: Infrared ear thermometer is one of the finest inventions of technology and it uses the energy that comes out of the ear to measure the body temperature in patients. This is known to give an accurate result.

Cooking: Sometimes it might become necessary to get the precise measurement of the heat in food and in such a case this thermometer can be used. It uses a laser beam to detect the precise temperature. Professional chefs can effectively use IR Thermometer as it can be inserted into the food for knowing the temperature.

Gardening: When it comes to outdoor gardens, the farmers might sometimes need to know the heat in the soil and for this purpose, this device can be helpful.

Most Important Use Six Tips For Event Planning

The organization, events can be a key communications channel and an opportunity to network and meet well-connected people. The goal is to make the event interactive and strategic, giving you the opportunity to communicate your organization's message to your target audience, and giving them a venue to give you feedback. 

Creating an event that will be imaginative in design, and effective in its purpose, requires a methodical business-like approach to make sure you select the right meeting facilities, hire the right catering, and structure the best program. Here are 10 tips to help you take your event planning to the next level.

1. Pick a Date

Obviously deciding when you will have your event is one of the most important questions you can answer. It helps to have three potential dates in mind so you can compare the availability and prices of different services on different dates. You might want to include different days of the week, simply for greater flexibility.

2. Determine the Length of Your Event

Even adding an extra hour to your event can make a dramatic impact on the cost and time required to plan the event. Additionally, you have to think about what time of day the event will occur. If you expect your guests to be at your event from 10am to 2pm, it is a good idea to offer a catered lunch.

3. Who is Attending?

Attendance numbers are consistently overestimated by event planners, which can sometimes make for unproductive negotiations or sunk event costs if not all of your guests show up. Try to get a firm RSVP from your guests, and track your attendance numbers in a spreadsheet. Do not make guesses about this detail.

4. How Many Rooms?

Some events, such as fund raising dinners, only require a single ballroom to house all of your guests and activities. But if you are hosting a full-scale conference, you will probably need to rent rooms for breakout sessions, lectures, and exhibits. Much like the number of attendees, you will not be able to accurately estimate costs until you know how much space you need.

5. Budget over Cost

Making decisions about vendors and rental space costs without a budget can be reckless and may lead to you spending too much on your event. Having your budget in place provides you with a framework by which you can compare your different proposals from vendors and venues. Will you be charging admission for attendance? Will you have sponsors for the event? Will you charge to allow exhibitors to set up in your event? Identify your revenue sources and how much money you will have before you start blindly spending it.

6. Marketing

Once you have the concrete details of the event planned out, it is time to start working on a marketing plan to let your audience and potential guests know about and start planning for the event. If you are holding an exclusive event, this may simply mean mailing out invitations to your guests. On the other hand, you may want to advertise on TV, radio, or in trade magazines if your event is open to the public. Keep in mind the purpose of your event. If you are trying to bring in revenue,

Saturday, July 19, 2014

Entrepreneur Coaching And Business

What are the common traits of an entrepreneur?

The entrepreneur is a different animal to your average coaching client. They are futurists and have the capacity to see opportunities where others cannot. They are highly creative and are strategic thinkers. They operate best free of constraints. They are impulsive and risk takers. The opportunity will often outweigh the risk. Their impetuosity and spontaneity often leaving a trail for others to clean up. They love to have multiple ideas or projects on the go. They thrive on starting things and can quickly become bored. They often work best alone. They move at a rapid pace. They may experience frustration if those around them cannot keep up.

What common mistakes do coaches make with entrepreneurs?

Don't try to change them or slow them down

Successful coaches appreciate the entrepreneur for who they are and don't try to change them. Let them run and get out of their way. Watch and learn. They move at such rapid pace they may omit to consider risks or challenges. Help them expand their thinking, use brainstorming techniques, run scenarios, add clarity and detail to the vision, identify blind spots. 

Preserve balance and sustainability

In their haste the entrepreneur may neglect basic aspects of their lives, egg diet, exercise, relationships, birthdays. Watch out for sustained periods of neglect. They are optimists and masters of illusion. Look for hidden signs of stress. The entrepreneur has the capacity to make small things big things - both opportunities and problems. Call it gearing. A good coach will realize this and role-play whatever role is appropriate. This is an art. 

Respect their creativity and risk threshold

Entrepreneurs have a high threshold for risk. Accept it and work with them. You may need to be the flexible one. Their tolerance for risk, not yours, should determine the basis for strategies and objectives. Entrepreneurs love to brainstorm ideas. They also love to talk. So, let them. Coaching is about listening. Entrepreneurs want someone to listen and respond enthusiastically to their ideas. They seek positive reinforcement.

What advice would you give to public practitioners dealing with entrepreneurs?

Much of the above is also true for the professional advisor. There is one basic distinction. True coaches will not give advice. They will facilitate self-discovery through questioning techniques. Professional advisers such as accountants are expected to give professional advice. They are subject matter experts and required to interpret the law and share their knowledge. Remember entrepreneurs are the decision makers so offer them your considered opinion and let them decide. Give them options.

Be proactive

Entrepreneurs move fast. They subject themselves to risks and make frequent decisions. They do not and cannot know everything. They place a premium value on astute professional advisers who can give them considered opinion proactively and foresee scenarios or risk exposure they cannot.

Be accessible and responsive

When entrepreneurs want an answer they want it now. They make rapid fire decisions and have short concentration spans. They don't want to dwell on the detail. Big picture, clear guidance, fast turnaround.

Service focus

Tune into what your client wants. Take time to learn how they tick. Be flexible with your communication style to accommodate your client. They talk fast, you talk fast. They want succinct information, give it to them. They want options, run scenarios. They expect you to be there when they need you not return my call two days later.

Questions are the answers

Learn how to listen. Learn how to ask powerful questions. The techniques of a skilled coach are just as relevant for an accountant or sales professional. Ask open questions, eg what, where, when, how. Praise questioning techniques such as probing, clarifying, paraphrasing, summering.

Restate commitments

Once you have reached agreement with your client, repeat it back to them for clarity, "So, it is my understanding that you want me to submit your tax return by Monday, 31 July, is that correct?" or "My expectation is that you will sign and return the contract to me by Wednesday, is that reasonable?"

Real-time information

Nothing irritates an entrepreneur more than old information. Time is money. They want both lead indicators (prospects, conversion rates, average sales, purchase frequency) and lag indicators (customers, sales, profits) in their management reports. Sales pipelines are essential management information.

System and structure

The entrepreneur needs system and structure. They often aren't the best person to deliver it. That's why they hire a coach, personal assistant, consultant or accountant.

Coaching an entrepreneur is an exhilarating and rewarding experience. It can be a roller coaster ride and is never a dull moment. Supporting them in your role as a public practitioner can be just as rewarding.