Author: melanioffices

Compliance Isn’t Just for Big Companies: What Growing Organizations Get Wrong About Risk

On January 28, 2026, over a thousand small businesses received notice from the U.S. Small Business Administration that their participation in the prestigious 8(a) Business Development Program had been suspended[1],[2]. These weren’t fly-by-night operations or obvious bad actors. Many were established government contractors who had been successfully competing for federal contracts for years. Their violation? Failing to respond adequately to an SBA program-wide audit data request issued in December 2025.

The suspensions were swift and consequential. While suspended firms can generally continue performing existing 8(a) contracts, they are ineligible for new 8(a) awards during the suspension period. For companies that built their business model around 8(a) set-aside opportunities, the impact is immediate and potentially existential. The 45-day appeal window offers little comfort when revenue pipelines have already dried up.

This scenario underscores a harsh reality that growing organizations are discovering in 2026: compliance isn’t bureaucratic red tape that only Fortune 500 companies need to worry about. It’s operational protection, and the gap between having informal practices and documented, verifiable compliance can cost millions in lost contracts, regulatory penalties, and reputational damage.

What is “Compliance,” Really?

Compliance just means operating your business in accordance with applicable laws, regulations, industry standards, and internal policies. To put it simply, it means meeting your legal, ethical, and professional obligations. And it’s more than checking boxes. True compliance creates a framework that protects your organization from:

  • Legal and financial penalties
  • Operational disruptions
  • Reputational harm
  • Loss of business opportunities

The Risk Categories Growing Organizations Must Manage

Understanding the types of compliance risks your organization faces is the first step toward building an effective framework. Here are the major categories that trip up growing companies:

  1. Regulatory and Legal Compliance Risk

This encompasses federal, state, and local laws governing your operations, including emerging regulations around AI and automated decision-making in states like Illinois and Colorado. For many organizations, this includes labor laws, privacy regulations, environmental requirements, and industry-specific mandates. The challenge? These requirements multiply as you grow, expand to new states, or enter new markets.

2. Cybersecurity and Data Protection Risk

The Department of Defense began enforcing Cybersecurity Maturity Model Certification (CMMC 2.0) requirements on November 10, 2025, fundamentally changing how defense contractors must approach cybersecurity. Unlike previous frameworks that relied on self-attestation, CMMC 2.0 introduces verified assessments with serious consequences.

3. Financial and Tax Compliance Risk

The penalties for non-compliance have teeth. Recent examples include:

  • Worker misclassification: Back wages, tax penalties, and fines from DOL, IRS, and state agencies
  • Wage and hour violations: Penalties plus damages for affected employees
  • False Claims Act (government contractors): Treble damages plus penalties per false claim

For growing organizations operating on tight margins, even a single compliance failure can be financially devastating.”

4. Operational Risk

This includes licenses, permits, certifications, and proper classification of workers. As organizations scale, informal arrangements that worked with 15 employees can create serious exposure with 150. Worker misclassification investigations, for instance, have intensified, with the Departments of Justice and Labor examining labor compliance violations involving improper classification and fringe benefit calculations.

5.  Reputational Risk

Often overlooked, reputational risk is the lasting harm that follows compliance failures. Non-compliant contractors damage their standing with prime contractors who are accountable for their supply chain’s compliance. Being ‘CMMC-ready’ or maintaining clean 8(a) status signals capability, while compliance failures, even if later resolved, can permanently close doors as contracting officers view past violations as red flags.

Three Early Warning Signs Your Organization Has Outgrown Informal Risk Management

How do you know when informal practices aren’t enough? Watch for these indicators:

1. You Can’t Answer ‘Show Me How You Do That’ Questions

When an auditor, customer, or prospect asks how you handle data security, employee onboarding, or quality control, can you point to documented processes? If your answer is “well, Sarah usually handles that” or “we just know how we do things,” you’ve outgrown informal management.

2. You’re Turning Down Opportunities Due to Compliance Requirements

If you’re declining RFPs, partnership opportunities, or contracts because they require certifications or compliance frameworks you don’t have, you’re leaving money on the table. More importantly, you’re signaling to the market that you’re not keeping pace with industry standards.

Prime contractors increasingly exclude subcontractors that cannot demonstrate compliance readiness. Being proactive about compliance creates a competitive advantage, while delays can permanently eliminate you from consideration.

3. Key Employees Leaving Creates Operational Chaos

When the person who “knows how everything works” gives notice, does it create panic? If critical processes, relationships, or institutional knowledge exist only in someone’s head or personal files (even if on your business’ system), you don’t have processes—you have dependencies. True compliance means processes survive personnel changes.

Who Actually Owns Compliance in a Growing Organization?

Here’s the uncomfortable truth: in many growing organizations, compliance belongs to no one. IT thinks legal handles it. Legal thinks operations manages it. Operations assumes IT and Legal has it covered. The result? Gaps everywhere.

Effective compliance requires:

Executive-level accountability: Someone at the leadership level must own compliance outcomes, even if they don’t manage all the day-to-day tasks.

Cross-functional coordination: Compliance touches HR, finance, IT, operations, and legal. You need mechanisms for these teams to communicate and coordinate.

Resource allocation: Compliance isn’t free. Organizations need budget for tools, training, assessments, and potentially external expertise.

Documentation systems: You need infrastructure to maintain policies, track changes, store evidence, and demonstrate compliance over time.

Having policies is one thing, actually following them is another. For example, it’s not enough to have an information security policy on paper. You need evidence of implementation: logs showing the policy is followed, training records showing employees understand it, and audit trails demonstrating consistent application.

Building a Right-Sized Compliance Framework

The good news? You don’t need enterprise-scale infrastructure to achieve meaningful compliance. What you need is intentionality and structure. Here’s how to start:

  1. Inventory Your Requirements

List all applicable regulations, contractual obligations, and industry standards. This includes:

    • Industry-specific regulations (HIPAA, CMMC, SOC 2, etc.)
    • Data privacy laws (CCPA, CPRA, state privacy laws)
    • Labor and employment laws
    • Tax and financial reporting requirements

2. Conduct a Gap Assessment

Compare your current state to requirements. Where are the gaps? What are you doing informally that needs documentation? What aren’t you doing at all?

3. Prioritize Based on Risk and Business Impact

Not all compliance gaps carry equal risk. Focus first on:

    • Requirements tied to existing revenue (contractual obligations)
    • High-penalty violations (financial, legal)
    • Competitive differentiators (certifications that unlock opportunities)

4. Document Everything (But Keep It Practical)

Documentation doesn’t mean creating a bureaucracy. It means being able to demonstrate that you:

    • Have policies covering key areas
    • Trained people on those policies
    • Follow those policies consistently
    • Review and update policies as needed

Many compliance frameworks offer safe harbors for organizations that demonstrate they’re following recognized standards.

5. Build Gradual Capability

You don’t have to solve everything at once. Many frameworks allow for phased implementation. CMMC, for example, is rolling out over three years, with different requirements phasing in at different times. Use this to your advantage: establish foundational controls first, then build toward more advanced requirements.

Start with Level 1 controls if you’re a government contractor. Get your documentation systems in place. Establish regular review cycles. Then build toward Level 2 certification when your contracts require it.

6. Know When to Bring in Expertise

Growing organizations often try to handle everything internally. That works until it doesn’t. Consider external expertise when:

    • You’re pursuing certifications that require third-party assessment
    • The regulations are highly technical or specialized
    • You’re in a highly regulated industry
    • The cost of non-compliance significantly exceeds the cost of expertise
    • The contract requires a third-party assessment by an entity certified to do so.

Compliance as Competitive Advantage

Between AI regulations, cybersecurity requirements, and evolving industry standards, growing organizations face a choice: treat compliance as a burden to be minimized, or embrace it as operational protection and competitive differentiation.

Organizations that approach compliance strategically often find unexpected benefits. CMMC compliance, for instance, places organizations roughly 80% of the way toward ISO 27001 or SOC 2 certification, unlocking commercial and international opportunities. Strong data governance required by AI laws makes systems more reliable and decisions more defensible. Documented processes make onboarding faster and operations more scalable.

The bottom line: compliance isn’t just for big companies. It’s for any organization that wants to compete for lucrative contracts, attract discerning customers, and operate with confidence in an increasingly regulated environment.

The question isn’t whether to build compliance capability. The question is whether you’ll do it proactively on your timeline, with strategic intent, or reactively, under pressure from lost opportunities, regulatory investigations, or contract disqualification.

The organizations that thrive in this environment will be those that recognize compliance not as bureaucracy, but as operational resilience and market credibility. Start now, build systematically, and turn regulatory requirements into strategic assets.

[1] https://www.jdsupra.com/legalnews/sba-suspends-over-1-000-8-a-1833714/

[2] We recognize the policy debates surrounding recent SBA enforcement actions. This article focuses on the compliance implications for small businesses rather than the political dimensions of these decisions.

The Legal Shift That Needs to Happen When Your Business Stops ‘Getting By’ and Starts Scaling

I can usually tell when a business is about to hit a wall.

It’s not always obvious. There’s no lawsuit, no emergency call from an investor. Instead, it’s a message that carries a quiet unease: “We’ve been doing the same thing for two years, and now it feels… fragile.”

That moment often follows a growth accelerator or strategic program, when a business realizes how many foundational pieces were never put in place. Other times, it comes when a client only partially pays and the business discovers its “contract” doesn’t offer much protection at all.

That fragility is a signal. It’s the space between operating a business that’s getting by and building the legal infrastructure needed to scale with confidence.

Let’s talk about what scaling really means.

Everyone throws this word around. “We’re scaling!” usually just means “we’re growing.” But growth and scaling aren’t the same thing. Growth is your business revenue going up. Scaling is your revenue going up faster than your cost and that only happens when you’ve built systems that work without you being in every room, on every call, at every work site.

  • From a legal lens, I know a business is scaling when:
  • The same legal question gets asked three times in a month
  • Founder equity or IP ownership suddenly matters because someone else wants in, or a deal with a more established company forces hard questions about how much of your IP you’re giving up (or licensing) for the fee on the table
  • Contracts stop being one-offs and start following a pattern
  • “We’ll figure it out later” becomes “we can’t move forward until we figure this out”

Why smart founders ignore legal (until they can’t)

Let me be clear: if you’ve been operating on duct tape, positive thinking, and hope, you’re not reckless. You’re often just rational and managing your business resources. Here’s why most founders delay:

  1. Capital preservation. Legal feels expensive when you’re watching runway. Paying a lawyer $3K to secure your intellectual property doesn’t seem as urgent as paying rent or hiring your first employee.
  2. Survivorship bias. You see businesses blow past you without obvious legal investment. What you don’t see is the equity mess they’re unwinding in year five, or the deals they can’t close because their IP ownership is unclear. (Survivorship bias means you’re only seeing the winners who made it without legal and operational structure and not the businesses that hit walls, lost deals, or imploded over preventable issues.¹ )
  3. Complexity paralysis. There are seventeen things you could be doing legally. So, you do none of them, because you don’t know where to start.
  4. The “clean it up later” myth. You tell yourself you’ll handle it when you raise money, or hit $1M, or hire a COO. But “later” always costs more. Always.

The shift: legal as infrastructure, not cost center

Here’s the mindset change that has to happen:

Stop asking, “How little can we spend on legal?”

Start asking, “What legal infrastructure enables our next stage?”

When you treat legal as infrastructure, you’re not just avoiding risk, you’re removing the friction that slows you, and your business. down. Clean IP ownership means you can take investment without renegotiating who owns what. Solid contract templates mean your team can close deals without waiting for you to review every line. Clear founder agreements mean you’re not having emotional conversations about equity when you should be focused on growth.

The ROI isn’t always obvious up front, but it shows up in how fast you can move, how much risk you avoid, and how much your business is worth when it matters. The businesses that scale sustainably get this early.

Growth without legal alignment compounds risk

Here’s what I see happen when businesses scale without tightening up their legal foundation:

  • IP ownership gaps. Who actually owns the thing you’re selling? If the answer involves a contractor from 2022 who didn’t sign an assignment agreement, you’ve got a problem.
  • Founder misalignment. Equity splits that made sense at formation don’t hold up when one founder is full-time and the other isn’t. These conversations don’t get easier with time.
  • Contract inconsistencies or none at all. Your first 10 clients have contracts that say different things. When you hit client 50, that’s not quaint, it’s a liability. Or, you’ve been getting by having your clients simply sign a proposal which often doesn’t include key contract terms.
  • Regulatory tripwires. At certain revenue thresholds, new rules apply. If you don’t know what they are, you can’t comply with them (For e.g., Hire your 50th employee and suddenly you’re subject to FMLA (Family Medical Leave Act) and ACA (Affordable Care Act) employer mandates you weren’t before.²

The cost (time and money) of “cleaning it up” is always higher than building it right. Always.

A few questions to ask yourself

If you’re wondering whether you’re at this inflection point, here’s your gut check:

  1. Do you have processes you’d need to defend legally if challenged?
  2. Are there parts of your business you avoid thinking about because the legal is unclear?
  3. Could you answer basic questions about who owns what in your business without hesitating?
  4. If an investor asked for your cap table, operating agreement, and IP assignments tomorrow, would you be ready?

If you hesitated on any of those, you’re likely past the point where “winging it” works.

What this actually looks like

Making this shift doesn’t necessarily mean hiring a general counsel or spending six figures on legal. For most growth-stage businesses, it means:

  • Getting clear on IP ownership (who created what, who owns it, and can you prove it)
  • Tightening up your template agreements so that closing a deal is efficient or your team can move without you
  • Documenting founder equity and roles in a way that holds up under pressure
  • Running a legal audit to identify the gaps between where you are and where you’re going

It’s less about “doing all the legal things” and more about doing the right legal things for the stage you’re in.

Final thought

If you’re feeling that fragility I mentioned earlier, that sense that your business is outgrowing its structure (or lack of structure), that’s not a sign you’re failing. It’s a sign you’re succeeding. The businesses that scale sustainably are the ones that recognize that moment and do something about it. The scrappy startup phase is over. The question is whether your legal foundation is ready for what comes next.

If you’re asking yourself that question, let’s talk. I help growth-stage businesses identify where they are, what gaps exist, and what to prioritize. You can book time with me HERE, or just send me a message.

¹For an easy read on survivorship bias: “Why do we misjudge groups by only looking at specific group members?” by the Decision Lab
²https://www.law.cornell.edu/cfr/text/29/825.105

 

Shielding Your Brilliance: Practical Steps for Small Business IP Protection

Creativity and innovation are often the driving forces behind small business success. Whether it’s a unique product, a catchy brand name, or proprietary technology, your intellectual property (IP) is the essence of what sets your business apart.

However, with the rewards of creativity come the risks of infringement. Keep reading to explore how small business owners can identify, safeguard, and defend their intellectual property against infringement.

At the heart of intellectual property lie patents, trademarks, copyrights, and trade secrets. Each category protects different aspects of your creative work, from inventions to branding elements to original content. Understanding these categories is crucial for small business owners looking to safeguard their ideas and assets.

Identifying IP Infringement

The first step in protecting your intellectual property is recognizing when it’s being infringed upon. What does infringement look like? Maybe it’s the unauthorized use of your brand name or logo, replication of your copyrighted content, imitation of your patented inventions, or breach of your trade secrets. Being vigilant and proactive in monitoring for such infringements is key to preserving the integrity of your IP.

Taking Action

Here’s one of the not-so-fun parts of running a business: having to deal with someone using your intellectual property without permission or payment. It’s essential to take proactive steps to protect your IP. Those steps include:

  • Obtaining legal protection through trademarks, copyrights, and patents;

  • Drafting clear contracts to establish ownership rights and implementing robust security measures to safeguard trade secrets;

  • Conducting regular IP audits to assess and document your assets;

  • Maintain meticulous records of your creative process, including drafts, timestamps, and invention dates.

  • Set up online alerts to track mentions of your brand name or products. Not everything will rise to the level of infringement, but early detection is crucial.

Building a Culture of IP Awareness

Ultimately, protecting intellectual property requires more than just legal safeguards for your IP assets—it requires a culture of awareness and respect within your organization. Starting at the head, as a business owner focus on innovating, and if you are “inspired by”, be careful not to copy and just make slight changes. That is a No-No.

Also, educating employees on the importance of IP protection, promoting ethical practices (i.e. not misusing or copying IP), and encouraging innovation while emphasizing the need for confidentiality are essential steps in fostering a culture that values and protects creativity. Anyone that is part of your team should understand the steps they need to take if incorporating another creator’s IP in the deliverable.

When the Gloves Come Off

If you suspect infringement, don’t stay silent. If you are accused of infringement, don’t ignore. Consulting an IP lawyer can help you navigate the legal complexities of infringement and determine the best course of action.

In the competitive landscape of small business, intellectual property is both a precious asset and a potential liability. By understanding the various forms of intellectual property, identifying potential infringements, implementing robust protection strategies, and fostering a culture of awareness and respect, small business owners can safeguard their creative assets and ensure their long-term success. Remember, defending your creativity isn’t just about protecting your business—it’s about preserving the essence of what makes it unique.

MC Law offers various solutions to help you protect and monetize your IP. Get in touch with us here today!

New Year, New Business, New Rules! Demystifying Business Entities and FinCEN in 2024

Happy New Year, fellow dreamers and doers!

I hope your 2024 is off to a fantastic start. The start of a new year symbolizes new beginnings and opportunities for growth personally and professionally. It’s a time when we are motivated to take the leap.

If 2024 is the year you launch that business (you’ve done all the research, registered for all of the small business webinars, saved your coins, etc) or, if you know this year is the year to finally shore up your business’ foundation in preparation for your next level, you’re in the right place.

In this blog, we’ll explore your options for establishing a new business and touch upon the new law to impact small businesses.

First Things First: Choosing the Right Entity for Your Business Model

One of the foundational decisions you’ll make is selecting the appropriate business structure. It’s likely you are aware of the LLC, or Limited Liability Company, business structure because it’s often plugged as the right entity from various online experts, and it is a great option.

However, each structure has its own implications for liability, taxation, and management so it is important to take the time to understand the nuances of each and choose the one that aligns with your business goals and vision.

If you are just starting, meaning you are self-funding and it’s just you (or another person or two), your brain, your laptop and prayers, it is fine to start out as a sole proprietorship until you have evidence that you have a viable business idea and plan. If it’s you and another person, make sure to have a partnership agreement in place to create the foundation for the partnership.

Back to the LLC, it’s the most popular option for today’s entrepreneurs for a reason. It shields your personal assets from business bumps and bruises and is flexible. But if you have big dreams to create the next big thing, you require big money, and your idea comes with a fair amount of risk, a Corporation may offer the structure, stability, and potential tax benefits you want. However, Corporations are less flexible and come with more paperwork.

Finally, if part of your mission is to support a specific cause that benefits a group of people, then a non-profit corporation may be the way to go. Indeed, for-profit corporations occasionally align themselves with a non-profit or charitable arm if part of their mission is to support a specific cause.

I hope it’s clear that your business structure selection is not one-size fits all – it must align with your business goals.

Follow the Rules

This year, a new law called the Corporate Transparency Act is shaking things up, especially for business entities formed after January 1st, 2024.

I’m sure you’ve seen the TikToks or Instagram and Facebook posts alarming the public about the “additional fees” to start a business in 2024. I even saw one video on IG that “An LLC Will Cost You $500/Day in 2024”.  That description is misleading.

The quick high-level summary of the Corporate Transparency Act is that it was enacted to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market.

What does that mean for you?  If you started your business after January 1, 2024, you will need to submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), providing details (details you’ve likely shared to open your business bank account, obtain an EIN, apply for business certifications) identifying the individuals who are associated with the company within 90 days of formation.

If you have started your business before January 1, 2024, you have until January 1, 2025 to comply. Failure to comply with the new regulation, or willfully violating the BOI reporting requirements may result in penalties of up to $500 for each day the violation continues. There is no fee for submitting the report.

If you need help with any of this, especially if there are several owner/operators of the business, you have a holding company, or any other unique circumstance, your friendly neighborhood lawyer (that’s me!) can guide you through the process.

Schedule a time to chat here.

Don’t forget to share this blog with your business friends. Cheers to 2024!

Beyond Recap: Small Business Year-End Review Tips for Future Success

I couldn’t be more excited for 2024. As the year draws to a close, entrepreneurs find themselves juggling a multitude of tasks, from finalizing annual reports and wrapping up client deliverables to making time for holiday luncheons, parties, and galas.

Amidst this whirlwind of activity, it’s important not to overlook the essential legal and back-office matters that can significantly impact your business’s success and longevity. By taking the time to review and assess these legal matters before the year ends, you can ensure that your business is well-positioned for a smooth and prosperous start to the new year.

Alright, business owners! Let’s jump into the key checkpoints for your end-of-year legal and operations review:

1. Review and Update Contracts

Contracts are the backbone of every business deal and many business relationships, but here’s the deal: business evolves.

Your business in year 1 is different from your business in year 3 and different from year 5. It’s essential to review and update existing contracts to ensure they continue to align with your current operations and objectives.

Pay close attention to key terms such as scope of work, payment schedules, intellectual property rights, and termination clauses. If you have any concerns or uncertainties regarding your contracts, consult with an experienced business attorney for guidance.

2. Update Company Policies

Company policies for your team and customers serve as the foundation for a harmonious work environment and positive interactions with your clients and customers.

Regularly review and update your company policies to reflect any changes in employment laws, industry standards, or your business practices. Make sure your policies are clearly communicated to your employees and that they are consistently enforced.

Make sure the policies on your website and point-of-sale are accurate. This will help you maintain a positive and productive work environment and transparency while minimizing legal risks.

3. Conduct Tax Compliance Review

Tax compliance is a critical aspect of business management, and failing to meet your tax obligations can lead to severe penalties and financial repercussions. Take a moment to assemble, scan, and upload relevant documents so that when 2024 comes you are ready.

If you work with a CPA, follow their instructions now for an easier tax season. Consider scheduling a consultation to learn how to maximize tax deductions and minimize your overall tax liability.

4. Protect Intellectual Property

Intellectual property (IP) is a valuable asset that deserves careful protection. Take steps to secure your IP rights, such as trademarks, copyrights, and patents.

Take time to inventory new IP created this year and get on the calendar to discuss protection. By protecting your IP, you can prevent unauthorized use, safeguard your competitive advantage, and make plans to monetize.

5. Data Security and Privacy

Data is the new currency, but it’s also a liability if not secured. Assess your cybersecurity measures and consider meeting with a cyber security consultant to ensure you are taking the appropriate steps to protect client data. Also, a solid privacy policy can earn you trust and credibility.

6. Review Insurance Coverage

Insurance: your shield against risks and the money-saver for your business. Don’t skip this crucial step in protecting what you’ve built. Review your existing insurance policies to ensure they provide adequate coverage for your current business needs.

Consider any gaps in your property damage, liability, cyber-attacks, and employee health insurance coverage. Consult with an insurance broker to assess your risk profile and optimize your insurance coverage.

7. Organize Business Records

Review your business records. Take a moment to sort, file, and delete the files on your desktop (anyone else’s pretty picture on their desktop completely covered with random downloads). That pile on your desk, file it away or shred. Organize your records systematically and implement a secure record-keeping system.

As you gear up to fine-tune your business for the upcoming year, remember that support is just a step away. Whether you need legal advice, guidance on compliance, or connections to reliable operational partners, we’re here to assist you.

Reach out today for expert legal assistance or valuable referrals to trusted professionals in various operational aspects.

Small business success is our priority, and we’re committed to helping your business thrive. Contact us now to ensure a solid foundation for the prosperous year ahead!

Mine / Yours: Understanding the Ownership of Intellectual Property in the Workplace

A client recently reached out about a new law labor in NY that addresses intellectual property developed by employees (BTW if you have burning business or IP questions, feel free to send an email).

To put it simply, New York Governor Kathy Hochul has just signed a law that says employees do not have to give their employer any rights to an invention they create on their own time, using their own material, unless it’s related to what the company does and was created while they were working for the company[1]. This new law validates the usual terms found in most employment contracts.

Are you currently working for someone while building your business on nights and weekends? Do you know what that means for your inventions or anything else you are creating while employed? This blog is all about ownership.

Inventions? Is it mine or yours?

First things first, let’s clarify what we’re talking about. When we mention “inventions,” we mean those brilliant, world-changing ideas and creations that may spring to life during your personal time if you are an employee.

This could be anything from a new app, a game-changing invention/product for children, or even the next best-selling novel. Now, when it comes to “employee rights,” we’re addressing the question of who owns these inventions.

The General Rule

In general, if you develop an invention in your own time, using your resources, and without using any of your company’s equipment, trade secrets, or confidential information, the invention is likely to belong to you.

Why Should You Care?

You might wonder why this matters, especially if you are currently employed and thinking “how will they know what I’m creating in my personal time?”

Well, understanding these rules is crucial for both employees and employers. For employees, it means they can explore their creative side without worrying that their nights and weekend project could be claimed by their employer. It encourages innovation, creativity, and entrepreneurship.

For employers, it means setting clear expectations and providing transparent policies. If you’re worried about potential conflicts of interest or if you think your employee’s invention could be related to your business or industry, it’s crucial to establish ground rules from the start.

Not So Fast

Of course, there are exceptions to this rule. Similar to the new NY law, some employment contracts may have clauses that grant the employer rights to inventions or other intellectual property created outside work hours, especially if those inventions or IP are related to the company’s business. That’s why it’s crucial for both parties to review and negotiate employment agreements carefully.

A great practice for employers and employees alike is to discuss these matters when the employer makes the offer of employment, and the employee negotiates the terms of the employment agreement presented. Open communication can help avoid misunderstandings and conflicts down the road. And for employers, it’s also a chance to showcase your support for your employees’ creative endeavors.

However, if you’re an employer who wants to assert some ownership over inventions created outside of work hours, there are ways to go about it:

  1. Make sure your employment contracts specify the company’s rights (especially if you are in a state that has not made this law) to inventions and any exceptions for creations developed outside work hours.

  2. If you’re dealing with particularly valuable inventions, you might want to consider a separate agreement to define the ownership, revenue sharing, or royalties.

  3. Open Dialogue: Encourage employees to come forward with their inventions. If an idea has the potential to benefit the company, discuss it openly, and find a mutually beneficial solution.

Over the last decade it has become more common for individuals to work for someone full-time and have a side venture to make more money or work full-time and build their business on the side until they have the funds to make the leap into full-time entrepreneurship.

It’s also not uncommon for individuals to go from employment to entrepreneurship and back to employment. With all the ways in which we now earn a living, it’s important that on whatever side you sit, you understand employee rights as they relate to intellectual property.

Remember, if you are an employee, the key here is to understand the parameters of what you can create and fully own within the context of your role as an employee. This is especially important if you are considering leveraging your current position to create a new business.

If you’re an employer, remember to respect your employees’ creative freedom while also protecting your company’s interests. Open communication and transparent agreements can go a long way in creating a win-win situation for everyone.

Stay creative, stay innovative, and stay informed!

Say Goodbye to Chargeback Headaches: 7 Tips for Small Business Owners!

If you are new to business, this may be the first time you’ve heard of the term “chargeback”. Before we define it, just know that they can be a nightmare for small business owners. They not only result in lost revenue but also consume precious time and resources.

While often confused with a refund, a chargeback is different. A chargeback is a return of funds to a customer’s card account after they dispute a card payment on their statement. A refund is a repayment of a sum of money.[1]

Some chargebacks are legitimate. But because of the lost revenue and time (and headache) it takes to address, small business owners would benefit from putting a strategy in place to deal with this potential ordeal.

Keep reading for 7 strategies to implement to prevent chargebacks.

1. Clear and Transparent Policies

Start by establishing clear and transparent refund and return policies. Make sure these policies are easily accessible on your website, invoices, at the point-of-sale, contracts, and in any communication with customers. When customers know what to expect, they are less likely to initiate a chargeback without first seeking a resolution through your established channels.

2. Detailed Product Descriptions

Provide detailed and accurate product descriptions on your website. Include high-quality images and specifications to ensure that customers receive exactly what they expect. Do you provide services? Are you a coach or a consultant? Be careful to provide a clear scope of the work or project for which you are hired in your contract.

If you frequently receive questions about related services, and it’s not included in the package your client requested, it’s a good idea to also include what is not included in the contract. Misunderstandings about product details and what is and is not included in a service are common triggers for chargebacks.

3. Excellent Client Experience/Customer Service

Do not overpromise and under-deliver. You need to make sure that you can deliver the services that you claim you can deliver and on time. Selling products through your website or other selling platforms? Prioritize excellent customer service. Your phone number, email address, contact information, should not be a game of hide and seek. Address customer inquiries and concerns promptly and professionally. By resolving issues before they escalate to chargebacks, you can build trust and loyalty with your customers.

Also, if you offer subscription-based services or products, make it easy for customers to manage their subscriptions. Provide clear cancellation instructions and ensure that billing is transparent. For example, if you know the transaction will appear as a different name than the one you use for branding purposes, alert your clients (at the point of sale, on the invoice or receipt, and in your policies) what name will appear on their credit card statement. Unauthorized subscription charges can lead to chargebacks.

4. Record Keeping

Maintain detailed records of all transactions, including order confirmations, shipping details, and customer communications. If you provide services, use clear and complete contracts. This is not to say that every contract needs to be 20 pages long, but you want to make sure you are not deleting clauses you deem unimportant for brevity purposes. If you have a conversation about the issues with your client, make sure you follow up with an email to summarize the discussion. This documentation can be invaluable in disputing unwarranted chargebacks.

5. Secure Payment Processing

Invest in secure payment processing systems. Ensure that your website is protected with SSL encryption and that your payment gateway is PCI compliant. This helps protect customer payment data, reducing the risk of unauthorized chargebacks due to security breaches.

6. Delivery Confirmation

If you offer physical products, consider using delivery confirmation services such as tracking numbers or signature confirmation. This provides evidence that the product was delivered to the customer’s specified address, making it harder for customers to claim non-receipt.

7. Chargeback Alerts and Prevention Services

Ask your payment processor about chargeback alerts and prevention services. These services can help you detect and prevent fraudulent chargebacks in real-time.

Chargebacks are not an inevitability in business, but since there is a new scam every day, you want to be prepared. As the saying goes, an ounce of prevention is worth a pound of cure. Implement the strategies now, not only for your financial bottom line, but also for the reputation of your small business. If you are not sure what you need, or how to create an effective system to manage these issues, reach out. We can help you!

Celebrating Mid-Year Wins

Hey there, small and mid-sized business owners! As we hit the mid-year mark (give or take), it’s the perfect time to take a step back and assess how far you’ve come. Mid-year reviews are not just about analyzing performance, writing reviews for employees, or setting new goals. It’s also an opportunity to celebrate your achievements and milestones.

In the hustle and bustle of running a small business, it’s easy to skip celebrating your business’ achievements. However, taking the time to reflect and celebrate the progress you’ve made in implementing the strategic plan you wrote at the end of 2022 and acknowledging and appreciating your team’s hard work can work wonders for morale and motivation to keep going.

Identifying and Evaluating Mid-Year Achievements

It’s easy to find yourself in grind mode that you don’t know where to start. Look back at the goals you set at the beginning of the year, and assess your progress.

I typically take my longer strategic plan and break them into quarterly goals and further break that down into milestones and tasks that need to get done. I love to check things off on a weekly basis, so stopping and appreciating what has been accomplished in the prior two quarters is motivating.

Utilizing data also helps in determining the part of your plan that may need some tweaking. If you have a team, invite them to share their valuable insights. What are they seeing in their day-to-day work? What changes have they experienced, if any? Being open to different perspectives can help you avoid blind spots and help build a stronger sense of camaraderie.

More than $$$$

While important, succeeding isn’t limited to financial gains. As a small or mid-sized business, you’ve likely had wins beyond your profit and loss statement.

Perhaps you finally landed a meeting with a decision-maker to hear your proposal for a contract that could be a game-changer. Or maybe you’ve finally received notice that your trademarks have registered. Maybe you finally took action and made the investment to pursue securing your brands. Or perhaps you are finally feeling a sense of relief because you’ve made key hires (for example, an assistant or operations manager) that gave you back time to focus on taking your business to the next level or time to just breathe.

Honor all your milestones because each contributes to your overall progress.

Time to Celebrate

After taking stock, it’s time to do something. Treat yourself. If you are solo and work around the clock, plan a weekday day trip doing something you enjoy but rarely get to do.

If you have a team, consider your company culture and budget. Again, it’s a good idea to get the opinion of key players on your team to know what your team would appreciate. Perhaps a paid-day off, gift cards (at places they shop), etc. The point is to do something beyond a verbal praise, or if solo, checking a box and moving forward. It’s important to be intentional about stopping and smelling the roses.

Also, while celebrating as a team is important, don’t forget to acknowledge individual efforts. Personalized acknowledgments and rewards can go a long way in boosting employee satisfaction and motivation, and there is no reason why the appreciation has to wait until the end of the year. Consider creating a spotlight or recognition program to honor outstanding team members and their contributions.

The Homestretch

Finally, as we celebrate our successes and get the motivation we need to keep going, it’s a good opportunity to check in to make sure you have the right goals for the remainder of the year and a plan to achieve them.

It’s also a perfect time to make sure any outstanding legal/business issues are being addressed or are scheduled to. Business owners should be concerned about its compliance throughout the year and not just at tax time.

Mid-year reviews are an excellent opportunity to reflect on your small or mid-sized business’s progress and set the course for the remainder of the year. By taking the time to celebrate your achievements, you inspire your team, foster a positive work environment, avoid burnout, and set the stage for even greater accomplishments.

We’re celebrating serving more growth-oriented small businesses and our new license to provide additional services to businesses in NJ! If you need support heading into the homestretch, reach out to us HERE.

So, let’s raise a toast to your mid-year wins and continue the journey to success together! Cheers to a prosperous second half of the year! ??

Non-Compete Agreements Clauses: OK or Nah?

Are my contracts legal?

A few clients have reached out to ask about the National Labor Relations Board’s (NLRB) recent legal opinion on non-compete clauses/agreements and what it means for their existing contracts and moving forward.

We talk a lot about protecting your business and business assets (i.e. intellectual property) here, so it makes sense to briefly explain what all of this means for a small business owner, since using non-competes is just one tool to managing risk for business owners ready-to-hire or outsource because hiring and outsourcing is important for any business owner that wants to grow and scale.

On May 30th, the NLRB’s Office of General Counsel issued a legal opinion regarding non-compete agreements which concluded that overly broad non-compete agreements are unlawful and violate the National Labor Relations Act (NLRA). According to the NLRB, non-compete agreements between employers and employees may interfere with employees’ rights to organize (i.e. collective bargaining) under Section 7 of the National Labor Relations Act (the Act), and the enforcement by employers of non-competes may violate Section 8(a)(1) of the Act.

The full legal opinion is HERE, but the long and short of it is expect increased scrutiny around these agreements and clauses. Currently, there are several states that have banned employee non-compete agreements. Business owners must check that their employment agreements do not include overly broad non-compete clauses.

In other words (and this is a very high-level summary), non-compete clauses/agreements should not be a written in a way that an employee could reasonably interpret that they would be barred from, or limited in, pursuing other employment opportunities. The NLRB’s opinion did note circumstances where non-compete agreements could be lawful. For example, non-compete agreements in true independent-contractor relationships are permitted.

Obviously, hiring employees or contractors can bring significant benefits to small businesses, such as increased productivity, access to specialized skills, the ability to scale, and freeing up the business owner to step into the leader and visionary role. But hiring also comes with risks.

Small business owners must proactively safeguard proprietary information and comply with various labor and employment laws. If you’re unsure whether your agreement is enforceable, or you need help with risk management in general, get in touch with us HERE.

Why Small Businesses Need Online Policies More Than Ever Before

Year over year, the number of consumers purchasing goods or services online has increased. And more and more businesses understand that even if they are not strictly online-based, having an online presence is necessary.

With an online presence, small businesses have new opportunities and face unique challenges. A well-designed and attractive website is important from a branding and marketing perspective.

Likewise, the website should be user-friendly. However, a key aspect of operating online (whether you have a full e-commerce shop or use your website to market your services) is the inclusion of well-written online policies on your website. Online policies protect the interests of the business owner, provide transparency, and foster a positive experience for customers.

Here are just a few ways your business will benefit from properly drafted online policies:

Building Trust and Credibility

Maybe it’s just me, but if the website looks like it hasn’t been updated since 2003, and if I have to hunt for the link to the terms of use, shipping policy, refund policy, etc., that makes me pause. Well-crafted online policies, such as privacy policies and terms of use and clearly-defined shipping, return, and refund policies, help small businesses project a professional image to their customers. Simply put, you look legitimate.

By clearly communicating your commitment to protecting customer data, respecting privacy, and adhering to industry standards, your business can build trust and credibility with your target audience.

Not only will you look professional and legitimate, but you also demonstrate transparency by outlining your policies regarding data collection, storage, and usage. You demonstrate transparency when you clearly define what counts as an acceptable return, outline the procedure to request a refund, and the care taken to ship products to you.

When customers understand how their information will be handled and how and when they can expect to receive what they’ve ordered, they feel more comfortable sharing their information and making the purchase. This results in increased trust and a stronger relationship with your business.

Protecting Customer Data and Privacy

Operating online expands your business beyond your physical location. But, with most business opportunities, you must assess and take steps to reduce potential risks.

Well-written online policies are essential for small businesses to comply with local and international regulations, such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). (Read more about the GDPR here).

By clearly defining how customer data is collected, used, and protected, businesses can avoid potential legal issues and costly penalties.

Setting Clear Expectations and Terms of Use

In many ways, online policies are contracts between business owners and users. And just like a contract sets clear expectations between parties, the terms of use or terms of service provide clarity to all visitors to the website regarding their rights and responsibilities when accessing and using a small business’s website or online services.

Setting those expectations helps prevent misuse, copyright infringement, or other unwanted activities that could harm your business. Your policies can also help you limit your liability by establishing guidelines for user behavior and disclaiming certain liabilities.

For example, if you provide financial tips, if you operate in the health and fitness space, or if your website includes advice, instructional videos, testimonials, or data, that demonstrates how other people who followed your advice achieve success. You want to make it clear that you are not guaranteeing results and that the business is not responsible for injuries resulting from taking the advice.

Resolving Disputes and Managing Online Interactions

As mentioned before, your online policies are like a contract between you and your customer or you and visitors to your website. Any good contract will include a dispute resolution clause.

In the same way, your online policies should outline procedures for resolving disputes, whether it’s through mediation, arbitration, or other alternative dispute resolution methods. You want to manage potential conflicts with customers or users in a fair and efficient manner and avoid costly litigation.

Additionally, it’s imperative that you manage user-generated content, such as reviews or comments on your website or social media pages. By setting clear guidelines for acceptable behavior, businesses can maintain a positive online environment and promptly address any inappropriate or harmful content.

As an intentional and determined business owner, you cannot afford to ignore those links typically found in the footer of most websites. These online policies not only protect customer data and privacy but also enhance trust, credibility, and transparency.

By setting clear expectations, mitigating legal risks, and effectively managing online interactions, you can create a secure and reliable online environment. Investing time and effort into developing comprehensive and user-friendly online policies is a worthwhile endeavor that can contribute to the long-term success of your small business in this digital landscape.

If you know you have ignored this long enough, or you’re just not confident in the online policies you currently have, reach out to us for a consultation, and gain a peace of mind knowing your online business is secure.