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Biz Practices and Scams

This document summarizes a presentation given to entrepreneurs on good business practices. It covers finding capital and financing for small businesses, avoiding common scams that target small businesses, keeping customers happy through good customer service, and the importance of legal compliance. The presentation provides tips on obtaining loans from banks, alternatives to loans, selling equity, and dealing with risk factors. It also outlines common scams like office supply fraud and ways to protect businesses.

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Banashree Baruah
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62 views42 pages

Biz Practices and Scams

This document summarizes a presentation given to entrepreneurs on good business practices. It covers finding capital and financing for small businesses, avoiding common scams that target small businesses, keeping customers happy through good customer service, and the importance of legal compliance. The presentation provides tips on obtaining loans from banks, alternatives to loans, selling equity, and dealing with risk factors. It also outlines common scams like office supply fraud and ways to protect businesses.

Uploaded by

Banashree Baruah
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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GOOD BUSINESS PRACTICES

FOR ENTREPRENEURS

Ronna Brown
THE BETTER BUSINESS BUREAU

New York Public Library


Science, Industry and Business Library
Branch
October 19, 2004
Small Business Facts

 Over half of all employees in NY work


for small businesses

 99% of all businesses in state are small


Today’s Agenda
 BBB: Finding Capital and Keeping
Customers

 FTC: Good Advertising and Avoiding


Scams

 Questions and Answers


Entrepreneurs
Hurdles and Rewards
 Initial Hurdles
 Create plan
 Get Financing
 Comply with regulations

 Staying in Business Hurdles


 Offer quality product/service
 Price competitively
 Market

 Rewards
 Lifestyle, Financial, Achievement of Dreams
At the Beginning
Get Expert Advice

 Free Sources
 Business Associations
 Government
 Nonprofits
 Community Business Counselors

 Get Help With The Basics


 Business Plans and Loan Proposal
 Marketing and Selling Techniques
 Financing
 Local Laws and Licensing
Where’s the Money?

 Informal - Friends/Relatives/Business Owner


 Loans - Banks/Credit Unions

 Debt Financing Alternatives - Commercial

Finance Co. Non-Profit MicroLenders/Govt Backed


Programs - Empowerment Zones
 Selling Equity
Where’s the Money?
Informal Network

 Create written document

 Don’t overextend

 Understand risk
Where’s the Money?
Traditional Loans
 Banks
 Interest Rate
 Longterm/Shortterm
 Risk Factor

 Relationship/Partnership
Where’s the Money?
Alternatives to Traditional Loans

 Vendor Credit

 Leasing Companies

 Factor Companies

 Customer Financing
Where’s the Money?
Selling Equity

 Control

 Need business advisor

 Understand exactly what all the terms


mean
General Issues for Financing
Risk as it relates to the owner

 Know your actual & perceived risk level


 personal credit score
 credit and borrowing history
 Prepare to make a Personal Investment (25% is typical )
 Your experience and track record in business
 Create relationships – know loan officers
General Issues for Financing

Risk as it relates to your business

 Collateral
 Business cash flow
 Equity in business
 Accurate records
 Your business plan and loan proposal
Scams Targeting

Small Businesses & Organizations


Just the Facts
 Common scams
 Office supply fraud
 Yellow Pages invoice scams
 Public safety fundraising fraud
 Web site cramming fraud
 How they work
 Pointers to prevent losses
Office Supply Fraud
 Chronic problem

 Affects all types of businesses and


organizations

 Companies lose $200 million annually


Trademarks of Office Supply Fraud
 A bill, statement or invoice that looks
legitimate for:
 Toner
 Light bulbs
 Cleaning supplies
 Air canisters
 Tape
 First-aid kits
How the Scam Works
 Telemarketers state or imply that:
 They are calling from the regular, previous
or “authorized” supplier
 It is time to reorder before prices go up
 They are calling to complete an existing
order
 They are asking for confirmation to send
previously ordered merchandise
How the Scam Works
 Telemarketers ask for:
 Name of the person that orders supplies
 Serial number and brand of equipment
 Confirmation of business address
 Does the business want a free gift?
Subsequent Events
 Supplies arrive at the office
(not the kind usually ordered)
 Invoice follows several days later
 “Past due” invoices and collection
efforts INVOICE

U E
D
ST
PA
Fighting Back
 When a business fights back,
the scam artists . . .
 Bully the caller with litigation threats
 Try to negotiate a lower price
 Appeal to sympathy
 Charge a “restocking” fee
 Make the organization return supplies at its
own expense
Why This Fraud Thrives
 Invoices appear legitimate
 Employees may not be familiar with
regular vendors and the cost of supplies
 Employees may feel they have consented
to the transaction
 The scam succeeds even when a business
returns the supplies, pays a “restocking”
fee, or negotiates a lower price
How to Protect Your
Business or Organization
1. Know Your Rights
 Don’t pay for unordered merchandise.
 Don’t return unordered merchandise.
 The Telemarketing Sales Rule offers
protections
 It requires disclosures
 It prohibits telemarketers from
misrepresenting material information
2. Use Purchase Controls
 Consider assigning a designated buyer
 Use purchase orders
 Send a copy of every purchase order
and bill of lading to accounts payable or
designated staff
Refuse merchandise that does not match
your purchase order or bill of lading.
3. Train Your Staff
 Instruct employees on how to respond
to telemarketers
 Employees should refer callers to the
designated buyer
 Require telemarketers to get a
purchase order
Yellow Pages Invoice Scams
 The solicitation has the appearance of an
invoice
 It may bear the logo and feature the
name “Yellow Pages”
 It may falsely suggest the publisher is
your local telephone company
 It may lead you to believe your business
has already been listed in the directory
and you are now being billed
Avoiding These Scams
 Check out the company and publication
 Call local Yellow Pages publisher
 Ask for a copy of a prior edition
 Ask for online address and call advertisers
 Ask for written information regarding
publication, distribution and circulation
 Check with consumer protection agencies
 Contact local postmaster or postal
inspector
Public Safety Fundraising Fraud
 Raising money for local police or fire
personnel
 Selling advertising that will appear in
local law enforcement journals
 Raising money to help fight drug abuse
in the schools or community
Blowing the Whistle
 Ask for identification
 Ask how your contribution will be used
 Call to verify legitimacy
 If you cannot verify legitimacy, report
telemarketer
 Be wary of “special treatment” offers
 Don’t be intimidated!
Website Cramming Scams
 The “Offer”
 Free website
 Nominal fee
 Cancel anytime
 The “Catch”
 Sites contain limited information
 Sites are not listed with major search
engines
Don’t Get “Crammed”
 Treat unordered services as a gift
 Review phone bills promptly
 Assign purchasing to designated staff
 Document purchases
 Train your staff on how to deal with
telemarketers
 Buy from those you know and trust
Where to Complain
and Get More Information
 Federal Trade Commission
 1-877-FTC-HELP (382-4357)
 www.ftc.gov
 FTC, Washington, DC 20580
 State Attorney General
 www.naag.gov
 Local Consumer Protection Office
 Better Business Bureau
 www.bbb.org
Federal Trade Commission
600 Pennsylvania Ave, NW
Washington, DC 20580

1-877-FTC-HELP (382-4357)

www.ftc.gov
Customers
 Easier to keep a current customer than
find a new one

 What do customers want


 Quality product
 Respect/Appreciation
Customer Retention
Typical BBB Complains

 Mistreatment

 Inadequate Complaint Handling

 Lack of Contact Information

 Product or Service Defect

 Failure to Deliver Product/Service


Customer Retention
Typical BBB Complains

 Misrepresentation /Expectations

 Refund Refusal

 Deceptive Advertising

 Misusing Private Customer Information


Customers
Common Mistakes

 Frontline Staff cannot Resolve

 Rigid in Solutions

 Doing Nothing

 Lack of Sympathy
Customer Retention
Good Practices
 Listen

 Reason

 Keep Calm

 Find a Specific Resolution

 Goodwill Counts

 Your Customer’s Complaint Matters


Customer Complaints
Mediation

 Fast, Fair, Flexible

 Confidential

 Requires Good Faith


Legal Compliance
“Ignorance is not Bliss”

 Federal, State, Country, and City Laws


 Seek Professional Help
 Legal Forms of Business Ownership
 Tax Laws
 Required Licenses or Permits
 Employment and Labor Law
 Consumer Laws
CONTACT THE BBB
 THE BETTER BUSINESS BUREAU
Servicing Metro New York, Long Island, and the
Mid-Hudson Region

 www.newyork.BBB.org

[email protected]

 Telephone: 212-533-7500
THANK YOU

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