Reprinted with Permission Courtesy of New Business Minnesota ©2018 – www.newbizminn.com

January 2018The Monthly Resource Guide For Startup Businesses

Need Help Filing Business Tax Returns? Startup-Friendly Accountants Are on Page 2.

Protecting Your Business

You’ve Worked Hard to Launch Your Business. Have You Taken Steps to Protect What You’ve Built? These Experts Offer Their Solutions: Troy Solis, SOL-IS Technology Solutions; Bob Bossert and Mike Karch, Floyd Total Security; and Steve Goldetsky, Inrelex Law Group PLLC.

Special Report

Protecting Your Business

From the Publisher: Most new businesses take care of the obvious when they launch. They’ve got a banker, web designer, CPA etc. But they often forget to take steps to protect their business from the unexpected dangers lurking around the corner. Knowledge is the shield that will protect your business.

To examine this topic for our readers, New Business Minnesota approached this team of experts to write about the latest trends and strategies: Troy Solis, SOL-IS Technology Solutions; Bob Bossert and Mike Karch, Floyd Total Security; and Steve Goldetsky, Inrelex Law Group PLLC.They will share more information in a free interactive workshop in upcoming months.

New Business Minnesota will hold its monthly Startup Meetup networking event immediately following the workshop. For more information and to register and RSVP go to: www.newstartupmeetup.com.

By Michael KarchFloyd Total Security

Security has taken on a different mean-ing over last 10 years or so. Protection your business or home used to mean

locks and burglar alarms. Now it’s about a whole range of technology to control access, reduce risk and loss, protect employee and customer information, monitor the parking lot, and so much more.

I’ve been with Floyd Total Security for more than 40 years and the security world has changed, along with the emerging threats.

What hasn’t changed is the basic ap-proach to protecting your business.

Security AssessmentFor all prospective clients, we do a walk

around to see what’s going on. If you are going to open a new store or new location, we talk to the police in that area to see what crime trends we should factor in.

We assess what intruders might target and why. Are they going to steal intellec-tual property, cash, records of employees or customers, equipment or inventory? Will it be an opportunistic thief looking to make money, or a disgruntled employee who want

to inflict pain? It is important to go through this pro-

cess. Not only do security companies have to come up with a plan to address identified threats, insurance companies and attorneys also want this type of assessment conducted to contain the risks as much as possible.

Once you identify your risk, you will have a pretty good idea on what to budget for security. If you have nothing to lose, protection is cheap. If the survival of your business is at risk, you will need to spend enough to secure it.

What they expect from us is a profession-al security survey, to get educated about the latest solutions, and then discuss a plan that meets their needs and budget.

We’ve always done free estimates and surveys. It’s about getting to know them and helping educate them as well so we can have straight talk about what their options are and what’s available to them.

We definitely are not a high pressure sales company. That’s not how you build long-term relationships with customers.

Security issues are always there, no mat-ter your business. For many of the people calling us for the first time, their interest in security was triggered by an event that

raised their concern. It could be a burglary in their neighborhood, their insurance company bringing it up, or they are a small business just opening a retail location and they know they should do something.

As a new or small business owner, you shouldn’t wait for some event to get you thinking about how to protect your busi-ness.

Secure the DoorThe best place to start is with locks and

keys. That’s the first layer of security. You want to control who goes through the doors.

Among the easiest ways to do that is with restricted duplication keys. These are keys that controlled by the manufacturer, under United States Patents, and issued only to se-lect dealers. These dealers have undergone high-level background checks and special-ized training to provide these services to clients.

Duplication of these restricted keys can only be done by these select dealers and only with the proper company authoriza-tion. Floyd recommends the Medeco Brand of High Security Restricted locks and keys.

Floyd Total Security Continued on Next Page

To Protect Your Business, Lock Your Doors, Control Access, Monitor Your Space

Right-Sized Security Plans Can Prevent Losses, Add Convenience, Help Manage Your Business. And Provide Peace of Mind.

Mike Karch and Bob Bossert with some of their team members at Floyd Total Security.

We have provided our clients these restrict-ed key services for 40 years and through three U.S. patents.

Regular keys can be easily duplicated at the hardware store where they keep blanks for all common door locks. Any of your em-ployees could have copies made. And for-mer employees could also have extra copies.

There is even a company that will make a duplicate key for you based on a photo you send from your phone and mail it back. That’s pretty scary.

We have used Medeco brand non-dupli-cable keys for decades. They are now in their third generation of patented keys.

For homes, deadbolts are absolutely necessary to deter break-ins. Although a determined burglar will always find a way, they don’t like being slowed down or have to make a noisy entrance that may attract a neighbor’s attention.

In commercial buildings, fire codes su-persede any security concerns, so deadbolts aren’t allowed. Firefighters need to enter buildings as quickly as possible since lives and property are at stake.

Access ControlOnce you can secure your doors, your

next vulnerability is controlling who passes through it and when. For example, a manu-facturing facility with multiple shifts needs to ensure proper access only at certain times and days for members of that shift.

Using a card and key fob entry system, you can control access on an individual basis. With a key-only system, you have no idea of who is entering, only that they have a key.

Many companies maintain that control throughout the facility so that only certain people need access to the computer or re-cords rooms and only during certain hours. These systems can also record every time someone enters or tries to enter a restricted area.

This same technology can be used to limit access or monitor use of a copy ma-chine, control access to a parking ramp or a tool room. It can control single or multiple buildings anywhere in the country.

Video monitoring Video monitoring has come a long way in

quality and versatility over the years. Now you see it being used for non-security func-tions as well, such as monitoring the cus-tomer lines or seeing if employees finished setting up the store display so you don’t have to go in to check.

Since many false alarms are caused by employees not burglars, video verification is

very important. Once an alarm is received you can get alerts and pictures on your smart phone. From there you can determine if the monitoring station should call the po-lice.

Employers also use video cameras to monitor workers compensation issues, or to see if someone really did slip on the side-walk out front, or document that the car came into the repair shop with the scratch already on the door.

Cameras are also being used for analyt-ics, such as counting how many cars are coming in and out of parking lots, traffic patterns, etc. The technology allows us to search those things and record what is going on to help management in planning.

We are excited to have camera systems to monitor construction sites, outdoor storage areas, vacant buildings and more. The sys-tems send video, in real time, to our moni-toring station. In the past outdoor protec-tion was almost impossible. These systems are portable, run on batteries, and transmit by cell. They can be rented to meet the length of your outdoor project.Smart Phones

Of course, smart phones are at the center of all things security. You can check out all your cameras, turn your alarm on or off in case you weren’t sure they were on. You can remotely unlock a door to receive a delivery.

We have a number of companies that use their smart phones as part of a monitoring system to maintain refrigeration at a specific temperature. Basically, anything you can put a switch on you can monitor on your smart phone.

Central MonitoringThe heart of all security services is a cen-

tral monitoring station, which responds when there is an alarm. While many secu-rity companies farm out that responsibility to a third party, at Floyd Total Security Sys-tems, we continue to keep it in house.

We find it works better because we can react quickly, make changes and not have to go through a third party. Also, we are in the community. We have relationships with fire and police departments going back decades. That makes a difference.

Since it is so critical to our reliability and dependability, we have our central monitor-ing station inspected annually for Under-writers Laboratories (UL) certification.

Do It YourselfThe temptation is always there to DIY.

Consumer-grade security cameras at a big box store are fairly inexpensive. The down-side: product quality is lower than com-mercial grade equipment and they aren’t

serviceable. Business owners tend to not have suf-

ficient security knowledge about the right number of cameras to use or where to prop-erly place them in their space. What lens is right? How much data storage? There are a lot of details that matter.

And with DIY solutions, you are respon-sible for monitoring it 24/7 and knowing what action to take in the event of an alarm. What do you do if you are in Florida on va-cation and you get an alert about your home in Minnesota? Who do you call? If you call 911, you get Florida 911, not Minnesota.

Our clients don’t want that ultimate re-sponsibility. They want us to handle it.

Peace of MindYou never expect to have a break in, fire,

or emergency every day. What you do ex-pect, and deserve, is to have peace of mind. That means you have a reasonable security program in place that gives you the assur-ance that you are prepared, protected and secure.

At the heart of all security measures – all those keys, cameras and locks, are your fam-ily, home and possessions – are your busi-ness and employees. It is intensely personal. Insurance can replace your stuff, but not the emotion of the event that has taken away your peace of mind.

I have talked a lot about the ever chang-ing technology aspect of security. However, the confidence you have in the company providing your security is extremely im-portant.Poor customer service can also take away your peace of mind.

When clients don’t get phone calls or e mails returned or face repeated billing is-sues, it It doesn’t take long before they won-der how competent the company will be in responding to an alarm at your home or business.

At Floyd, we believe strongly in the lat-est technology and the highest level of cus-tomer service. They go hand in hand. That’s why we are now doing business with third generation families. It is kind of cool!

NBM

Reprinted with Permission Courtesy of New Business Minnesota ©2018 – www.newbizminn.com

Mike Karch is the owner of Floyd To-tal Security, providing integrated security system solutions for homes and business throughout the Midwest. Services include alarm systems, Access Control, CCTV, 24/7 monitoring and Locksmithing. He can be reached at (952) 881-5625 or

www.floydtotalsecurity.com

Working with Managed IT Pros Will Help Keep Your Business Productive and Your Data Safe.

Your Business Is Under Constant Threat from Hackers, Spammers and Creeps

By Troy SolisSOL-IS Technology Solutions

When it comes to Protecting Your Business, it is essential that you have what the military calls situational aware-ness of your IT environment. That means knowing

where your vulnerabilities are, what solutions are needed and where, and keeping everything current.

If your IT environment is breached or fails, your business could suffer serious damage, diminished pro-ductivity and, if it affects your customer service, loss of business.

I know what it’s like to start a business. It can be overwhelming. The key, I’ve found, is to focus on your strengths and delegate the rest. I learned it first-hand and I see my successful clients practice that as well.

You could easily spend four hours chasing a tech problem that we could fix in minutes. That’s four hours you could have used for meeting prospects, sending a marketing email blast or engaging your clients.

I started my career in technology as a radar and radio electronics technician in the U.S. Navy. After serving, I joined the medical device industry, where my talent for technology advanced me from electronics technician to roles in IT management and consulting.

I launched SOL-IS Technology Solutions in 2009 to bring that level of service and expertise to small business owners.

Even if you outsource your IT, you will still need a good understanding of the technology you rely on. The issues are the same whether you are a solopreneur on a laptop or a big company with hundreds of users. Here is a quick overview.

Vulnerabilities The biggest vulnerability is having an internet con-

nection. That’s the route hackers take to get in, and they are constantly banging at the door. If your firewall isn’t updated regularly, they will get in.

If you want to be totally secure, follow the example of one of my clients. They have NO internet connection on their 15-year old computers and outdated software. Ev-erything works perfectly because they’ve never touched the internet. They don’t need updating or patches.

They do, however, have a separate computer for email and online things, which is the computer we fix and maintain.

For most of us, the internet is not an optional thing. Therefore effective protections and management sys-tems must be in place.

Perimeter Gateway ProtectionThis is the outer edge of your security perimeter. This is

a big one: your internet router. You may own your own or lease one from your internet provider and it is the entry point of all in-ternet activity.

While it provides a level of security with a basic firewall that will keep hackers out,

it doesn’t keep out all attack threats. For in-stance, it won’t do anything about incoming

emails or websites you visit. On the gateway, there are other

Services that enable anti-virus and anti-r a n s o m w a r e tools or other subs cr ipt ion-

based software to protect you.

These are b u s i n e s s -class prod-

ucts that are used by professionals, not something

you get at Best Buy.Gateway protection is by far the

most beneficial protection for your network, home or office. If you don’t have the resources to get the quality

gateway protection, you need to work with someone who does.

End point protectionEnd points are your computer, tablet,

phones on the network and any device that is connected to the router.

This is the next perimeter after your router. Your computer and other devices will have their own firewall. You should

have it set up properly and have it turned on in the appropriate network environments.

You’d be surprised how many assume it’s on when it isn’t.

Be aware of your firewall settings when away from your home or office, which are private Wi-

Fi connections. The greatest risk is from public connections such as free Wi-Fi at a coffee shops

or airport. Make sure you are set up properly or you can get infected.

Anti-virus software can give you addi-tional protection. You are better off using a

SOLIS-IS Technology Solutions Continued on Next Page

paid anti-virus subscription service, which provides regular updates and anti-virus definitions automatically.

There are free versions you can use, but they aren’t as robust. And you have to re-member to get the updates and make sure they are installed.

End Point / Patch ManagementOnce you have your protection in place,

you have to manage it. That means know-ing how to properly use your anti-virus and malware software and patch updates for Windows or Mac.

Recently, hackers developed a Malware product and then set their sights on Win-dows operating systems that were missing a certain patch. My business clients didn’t have issues because we keep them up to date and manage it for them. Those who were on their own were left scrambling to find a fix for it.

Email protectionEmail is one of the most common entry

points for bad guys. It’s an opportunity for things to get into your computer from any-where in the world.

Deception is the favored tool. If they don’t know you, they will pretend they do. They might send a Dropbox notice saying you have a document you need to sign. DON’T. It’s coded software that will give them remote access to your computer or track your key strokes to get passwords to your bank accounts.

We recommend using an email service that includes anti-malware, anti-virus and anti-spam software as part of their service. Some of the popular free services leave the scanning to you, costing you an additional layer of protection.

TrainingThe biggest component in any protec-

tion scheme is training. You and your users need to know what to look out for. Hackers are tricky. They will send you emails about wanting to pay one of your invoices or ask you to reset you bank password. Beware of their offer to “Just click here.”

They are masters of replicating logos and email formats used by any business. One of my customer had just agreed, in an email with his real lawyer, to mail a $6,500 check to a certain address.

Within minutes, another email arrived that looked just like his lawyer’s format with instructions to send the money by wire transfer instead. Fortunately, the ac-

counting person didn’t fall for it.No “anti” anything software can protect

you against that. You have to keep your eyes open, your wits about you and ques-tion everything.

If in doubt, you can put your cursor over the link and see if you can identify who it’s coming from. Or you can call the apparent source to verify if they sent it.

Get training for you and your staff, be-cause ultimately, you are the weakest link. A good managed service provider can help with that.

BackupsWhen all goes wrong, whether it’s a vi-

rus, bug, ransomware or hard drive crash, you have no hope of recovery if you don’t have a solid backup.

If you get a ransomware alert and they lock your data, backups that include ver-sion histories can be a lifesaver. You can go back to a point before you were attacked and your data was encrypted and do a re-store from there. It could be from hours or days to a year earlier.

If you get a ransomware message on your computer screen — STOP. Discon-nect power from your computer and seek professional help. If you have a good back-up version history that predates the attack, you have a decent chance to recover.

Back when ransomware first appeared, we obtained a new client because they were hit with a demand for payment to unen-crypt his files.

His best course of action was to do a re-store. Unfortunately, he had been using a free backup service that was just mirroring what was on his computer – the virus was backed up as well. Beware of free stuff. He lost everything.

Don’t overlook, as many do, the need to back up your email data, contacts and accounts. Don’t forget your calendar. You don’t want to lose your future, too.

Password change policiesIf you want the easy route to a miserable

life, convince yourself that you only need one password. Be serious about protect-ing your business and create real password policy. Write it down on a piece of paper.

• How frequently to change it.• Required level of password strength.• Number of characters, special charac-

ters, numbers, upper and lower case.• Enforce the policy with special tools to

monitor and ensure it matches password

strength policies. You should strike a balance between

memorable and overly complex. Sixteen characters is extremely strong and is a good goal for length. To keep it memorable, try combining three or four easy to remember password. Mix them together.

As you consider solutions for protecting your business, remember that there is no such thing as one size fits all. Your com-puter environment, how you work, where you work and the software you use all pres-ent challenges that are different from other businesses.

Because of the range of services and pricing packages available, any business can afford to work with a managed IT ser-vices professional who can make sure they are protected, productive and getting only what they need.

Managed IT is all about monitoring your systems to ensure your technology systems are operating properly, and are secure. An IT professional will continually ensure that your systems are prepared to face emerging threats before you are attacked.

One of the things you learn about run-ning your own business is that you don’t know what you don’t know. Take the IT re-sponsibility off your plate so you can focus on what you do best – grow your business.

NBM

Troy Solis is President and owner of SOL-IS Technology Solutions, an IT company serving the Twin Cities and surrounding areas with managed IT services, data network security, technology consulting and cloud solutions. He can be reached at (952) 279-2424 or

support@sol-is.com www.sol-is.com

Reprinted with Permission Courtesy of New Business Minnesota ©2018 – www.newbizminn.com

Inrelex Law Group Continued on Next Page

Be Prepared. Have an Attorney on Your Team.

Every Business Faces Legal Challenges. Here are Five Areas You Should Know.

By Steve GoldetskyInrelex Law Group PLLC

It is a thrill to write an article on protecting your business. After 35 years of practice I have seen

a lot and want to share insights. While a short article won’t cover all bases—it will give you a great head start.

To protect your business and ensure its continued success I have five themes to cover.

• Have a business plan• Create a team of consulting

professionals• Determine potential own-

ers for the business• Draft contracts which ad-

equately protect you with cus-tomers and vendors

• Try-it and fix it. A good business plan is es-

sential. How will you measure the progress of your business? Is it worthwhile to create the business, is there a market-place for what you are selling?

Will you do business as a corporation, limited liability

company, or sole proprietor-ship? One way to limit your per-

sonal liability is creating a corporation or limited liability entity.

A business owner generally will have no personal liability for busi-ness debts. However, if you rent space for your business or want to purchase goods or services from vendors, these businesses may want your personal guarantee for the business payment obligation.

The fewer personal guarantees you make the better, but expect that some guarantees may be required. An option is to personally guarantee payment for a set period of time which allows the other entity comfort in knowing your business will timely pay its obligations.

A client once came to my office de-siring to purchase a coffee shop. The individual was tired of the “corporate

experience” at a bank and wanted to start her own business.

As a business attorney, I find it fulfilling to help someone start a business. I suggested she first cre-ate a business plan for the acquisition target. When she did, she realized she would be working for minimum wage for a number of years. That wasn’t sustainable for her personal cash flow needs.

In this instance we avoided a crisis by deter-mining this was not the “right” business oppor-tunity for her and that other future opportunities may be a better fit.

A prospective client came to my office indicat-ing he had a Delaware corporation that would be taxed as a separate legal entity: a C corporation. This was a closely held business that was doing business only within Minnesota.

I generally suggest clients organize their busi-ness under Minnesota law—and elect to be taxed as a pass-through entity – an “S” corporation or limited liability company.

This is especially true in 2018 with the new federal tax legislation which provides wonderful tax savings opportunities to pass-through enti-ties. This client could have protected himself and his business by getting a business structure that fit current business needs. This can be accomplished by assembling the right team of business consul-tants.

A good team of consultants for your business includes an attorney, accountant, bookkeeper, banker and insurance broker.

Each consultant brings a little different perspec-tive to the table. A new business owner needs this expertise.

If you are going to need funds for your busi-ness, a good banker is key. If your business will need to insure against the risks of doing business (all businesses need to do this), find a good busi-ness insurance broker who understands the risks your business faces and the coverages you need. Your life insurance agent or homeowner agent may have the required expertise to determine in-surance coverage you will need for your business. Make sure they are knowledgeable about business or commercial insurance.

Your team of consultants needs to communi-cate with each other. For example, sometimes a “yes if ” from one team member and a “no unless”

from another team member means the same thing, whereas the business may only hear “no” from one consultant and “yes” from the other.

A client came to my office and felt business insurance was a luxury the business could not afford. The client thought he was adequately protected as a shareholder in the corporation.

Even though you own shares or member interests in a limited liability entity without personal liability, you don’t want a lawsuit to break the bank and force you out of business. Good business insurance which covers first dollar litigation expense is a good antidote for this problem.

Sometimes there may an association that has good insurance coverage for your type of business. Examples include an association of realtors, personal trainers, restaurants, and chiropractors, etc. By becoming a member of the association, the association may have an attractive insurance package to offer your business.

When creating a business, the owner has to decide if he or she wants or needs additional owners to make the business successful.

Owners may need special expertise or fi-nancial backing and another individual can bring this resource to the table. Some individ-uals may provide key resources to the business but should not have an ownership interest.

Owners have to be willing to work to make the business successful with long hours and low wages. Some individuals cannot or will not do this and simply want to work for a pay-check.

Make sure to offer ownership in the busi-ness only to those who truly are committed to making the business successful and mak-ing sacrifices to achieve success. The rule of thumb is limit the number of owners to those essential to the business.

Drafting the right contracts. The first con-tract to create after incorporating or organiz-ing your business is an agreement amongst owners.

This contract will govern the rights of the owners’ in relationship to each other. It can be a control agreement, buy sell or operating agreement. The agreement answers what an individual is allowed or not allowed to do on behalf of the business.

The agreement also determines what hap-pens when an owner wants to sell her interest in the business. Will she be able to sell? What will be the price paid? Will the entity purchase it or will the owners repurchase? Is the repur-chase mandatory or merely permissive?

To properly protect the ongoing business, it is critical to have this agreement in place. I strongly recommend this agreement be draft-ed at the time the business is created.

I call this time frame the “business honey-moon phase”. This is the time when everyone in the company wants the business to succeed and the owners are generally aligned on how to make this happen.

A client recently came to my office. A co-owner wanted to leave the business and ex-pected to be paid the price set forth in the buy sell agreement.

As I reviewed the agreement it was clear the purchase formula was based upon a differ-ent set of circumstances than the business was currently experiencing.

First, the owner leaving the business had not been active in the business for some time. As an inactive business owner, the individu-al had contributed little to the success and growth of the business.

Further the purchase price for the owner’s interest would make it difficult or impossible to pay the departing owner the amount owed without destroying business cash flow.

Through a six-month period of negotia-tion, we were able to successfully agree to a sale price which allowed both owners to move forward; one to a new adventure and the re-maining business owner to continue the busi-ness without absorbing a damaging debt ser-vice obligation.

Contracts

Drafting contracts with your customer is critical. In a commercial context, the con-tract needs to be commercially viable for all parties. This means your customer gets what is bargained for and the business receives the proper payment in a timely manner.

Further the contract needs to limit the li-ability of the Company. Too often commercial agreements are so one-sided they prevent or severely restrict the free flow of commercial activity between a business and its customer.

I have also experienced customers who ex-pect a company to absorb liability for mistakes that is simply unfeasible. Drafting customer agreements with clear commercial expecta-tions and limiting the company’s liability is always the goal.

Contracts with vendors of products or ser-vices needed for your business must clearly specify what the obligation and liability of each party is under the contract.

I have reviewed contracts with custom-ers and vendors which provided inadequate protection to a party and what the agreement actually required of each party. The liability of one party to the other for an ambiguous promise under the contract can be disastrous.

Try it and fix it The first steps in protecting your business

are described above. The work doesn’t stop there. Periodically evaluate your business. Consider meeting with an advisory board. Don’t be afraid to honestly evaluate whether your business is heading to prosperity.

If it’s broken, fix it. And if it needs tweak-ing, then tweak it. As business owners we get absorbed in the day to day details of our busi-ness. Take the time and effort to evaluate your business and reposition it for success.

NBM

Steve Goldetsky is an owner of Inrelex Law Group PLLC. He is a business and estate planning attorney with over 25 years’ experience representing individuals and small businesses in areas ranging from business formation, business succession planning, probate, employee benefits and real estate matters. He can be reached at (952) 835-3030 or

steve@goldetsky.com www.goldetsky.com

Reprinted with Permission Courtesy of New Business Minnesota ©2018 – www.newbizminn.com