I’m telling you the story of what happened to me. I was in the middle of starting up a new business while playing Startupologist here at StartupNation. And my hard drive had crashed, according to the Dell Customer Service rep. A DISASTER!!! ALL MY STUFF, GONE!!!

The Cinderalla aspect of this story, though, is that just a month earlier, a business associate at a collaborating company for my startup suggested that I get an automatic back-up service. Actually, he didn’t suggest, he demanded, saying something like, “If I’m going to be dependent on you, I’ve got to be confident that you won’t have a catastrophe and lose all this data we’re sharing. You’ve got to have an automatic back-up for your data.” He mentioned a couple of options he’d used for automatic backup of your computer. I chose one not knowing the difference - Carbonite, which is always working in the background, syncing your files with a remote storage area at Carbonite.

And thank goodness for his sage advice. Within a few days of my hard drive crash, I had received a new hard drive from Dell, I logged in to Carbonite, I selected “Sync,” and after Gigabytes of downloading, Bingo! I was back in action, not a single thing missing, everything organized just like before.

So I connected with Carbonite to ask them to make a special offer to fellow entrepreneurs at StartupNation who MUST NOT suffer a loss of their priceless data. Our businesses are just too small to endure that kind of blow.

Glad to share that Carbonite has stepped up and offered a special two-months free on an annual subsciption costing around $59. They also offer their standard “Try It Free” trial without a credit card required. Here’s Carbonite’s special offer for StartupNation folks.

My data was priceless, literally. At around $5/month ($59 annualized), it was a no-brainer for me when I was first advised to download it, and now I’m giving you strong encouragement to develop your own hands-off, automatic back-up solution.

Yes, Carbonite is an automatic backup service we have a special offer on, but choose any such service and get your data backed up automatically without having to think about it. Trust me, you’ll be glad you did. In business, the key is taking only risks you HAVE to take. Your data no longer has to fall into the “risk” category.

Here’s the special offer at Carbonite

For businesses, same rule applies (not the female part, but the type). If you operate a home-based business and your computer is the only real collateral you have, I wouldn’t worry about it. If you have an office with employees, documents and products, you might want to consider. Video surveillance systems and other security devices can help save your business money, just on insurance alone. Not to mention the fear factor to keep employee theft down and act as a security safety net in the case of a break-in.
The U.S. Department of Commerce reports that employee dishonesty costs business owners around $50 billion a year.

The U.S. Chamber of Commerce goes on to report that approximately 75 percent of all employees steal at least once, and half of these employees will be repeat offenders. Shocking, right! If this isn’t reason enough to invest in a video surveillance system, consider the following.

Saves Money
Insurance companies will actually knock off anywhere from 10 to 20 percent if you have a business security system in place. In general, most video surveillance systems are inexpensive—depending on your security needs. A basic single camera system on an analog system (aka not digital), will run anywhere from $120-$250 for a camera, and quality DVRs go for $500-$1,000+ (depending on your needs), according to Resource Nation.

Good Investment
For a more robust system, you may need to invest in multiple cameras and monitors. Digital offers the best picture quality, but again it may not be necessary to purchase a digital security camera system if security at your company is at a low risk of being violated. Before talking to vendors, decide what level of security you are looking for and stick with your decision. No need to purchase a state of the art system if you don’t need it.
Don’t let sticker shock on some of these systems deter you from what you need. Once you factor in savings from your insurance company, many times some of these systems are completely free.

Negotiating
When negotiating with video surveillance vendors make sure you are going through the contract thoroughly. Will they be setting the system up for you? Will they be educating you on how it works? Asking these types of questions will help you realize what is going to need to be done on your end. If a price seems too good to be true, it might just be. Paying a little more to get your system hooked up by a professional may be a better option. You can visit EverythingBusiness.com for a full list of security camera system providers.

Scrub Your Hard Drive

Just like you would before you sell a computer, clean your office copiers before reselling them. Some software programs on the market available for purchase are:

• Sharp has an encryption package erasing all your images from your copiers hard drive.
• Xerox on the other hand has been making strides to make their digital copiers safer since 2001. As of 2006, many of their copiers in the Officeportfolio have a feature called “Disk ImageOverwrite” that helps protect your information for free.

Enlist an IT Expert

Regardless if you think you are an expert, always seek professional help from someone in the field - especially when it comes to security concerns for your company. If you don’t have an IT expert in-house, there are plenty of them available to outsource and should be able to take care of wiping these machines clean just like they would a computer. As much as I hate to admit it, GeekSquad is nationwide, quick and easy.

Implement a Digital Filing System

Creating a digital filing system can be a great way to minimize your risk. Many businesses are digitizing their files for this reason - BoardPortal and NeatDesk are just two popular document management software programs that will digitally file the information. The fewer places information is handled, the less likely it will be that the information will get in the wrong hands. Some companies are going down to one digital copier machine that all employees are required to use.

Alert Employees

Just like a security attack, it is extremely important to alert your employees of the risks by an office copier. Send an email letting them know that all information is saved (this could also help if employees are copying items that are not business-related so-to-speak) and to be careful of scanning, photo copying confidential and proprietary information. If you decide to move to another system (digital filing) or limit use to only those in HR, it could cut down on the amount stored on the copier’s hard drive.

Educate Yourself

After news broke in April of these threats, the FTC has gotten heavily involved. Although this development is new, keep up-to-date on the latest security developments the FTC will be issuing. They are currently in talks with the major copier distributors and manufacturers to get a grip on the situation.

The Small Business Startup Kit was assembled in collaboration with Office Depot, which is supplying all the cool equipment and services included in the Kit. Here’s what in it:

• 1 Toshiba Satellite® U405-S2911 Notebook Computer With Intel® Pentium® Dual-Core Processor
• 1 Fellowes® PS 79ci 100% Jam Proof Cross-Cut Shredder
• 1 Lexmark X 7675 All-In-One Printer/Copier/Scanner/Fax Machine
• 1 $100 Gift Card to use at Office Depot

So, why are we doing this?

For StartupNation, this is all about helping you remove the barriers to starting and growing your business. That’s why we included essentials like the notebook computer, all-in-one printer, and the jam proof shredder. (By the way, trust me - you want to use a shredder. I just visited a transfer station where our garbage is dumped. You could see people’s personal papers flying all around in the wind.)

In any event, with these necessities on hand, the winner will have a well-oiled machine ready to support him or her on a path to success.

Here’s all you have to do for a chance to win this giveaway:

Leave a comment below in this blog as to why you look to retailers like Office Depot for your small business needs.

It’s that simple, folks!

We will then select a comment/answer AT RANDOM and name that person the winner. One comment is allowed per person. Must be 18 years of age or older to participate and based in the U.S. 

We will stop taking comments in this blog post at midnight EASTERN TIME on March 13, 2009. We will announce the winner on March 16, 2009 within this blog entry as a comment with instructions on how the selected winner should contact us with a SHIP TO address. The suite of equipment and gift card will be delivered shortly thereafter. Your only problem at that point is… what excuses do you have left NOT to “start it up”?!

All StartupNation spam rules apply and StartupNation retains the right to delete any blog comments it deems to be spam. If the selected winner does not respond to instructions by March 18, another winner will be selected at random on March 19, and a similar process will be used to reach them.

Jump in! Become a winner! We look forward to reading your comments.

As always, we want you to start it up and we hope this Small Business Startup Kit helps!

Below are the emailed questions I received from the producers in advance of my most recent appearance. They take this and turn it into what’s called a “rundown”, which is essentially an outline of the show with talking points, many of which end up on the teleprompter. I figured the process, as well as the actual advice, might be illuminating for you. Enjoy!
—

Financial:

What are the biggest financial mistakes that SBOs make?

·         Not prioritizing the spending

·         Not keeping track of available cash this month and in the months and year ahead

·         Forgetting that it’s easier to raise money when you don’t need it

·         Buying new instead of “used”.

·         Ignoring what I call the “2X Factor” which makes the point that things usually take twice as long and cost twice as much than you expect

·         Buying too much inventory or spending too much on advertising without testing out what works best

·         Not paying attention to building business credit

·         Accumulating “fixed costs” instead of “variable costs” which are far more flexible to changing status of the business

·         Receiving investment and not ensuring that there’s a unified plan and timeframe. This is called, “alignment of interests,” and is critical to create.

What resources are there for people when they are in a hole?

·         there are consultants who will help you build up your credit, personal and business

·         utilize an accountant. Don’t just check in at tax time – make it a quarterly check-in.

·         PR firms are helpful in managing any external-facing issues

Should they use their credit cards?

·         Credit cards are a last-resort solution to financial problems. More often than not, they simply dig a deeper hole for you.

Should they go to a bank for a loan?

·         Going to the bank for a loan BEFORE crises occur is always smarter.

Where do you turn when you can’t get a loan?

·         Your rich uncle

Friends and family? Pitfalls / pros?

·         Friends and family are a great way to go as long as you treat any loan or investment professionally and set expectations and communicate regularly and thoroughly about status of their investment

FYI, one of the most common laments we hear on our radio show is, “how do I get a loan if I don’t have good credit?” That’s a huge impediment and reality out there…

Legal:

What are the biggest legal pitfalls that SBOs fall into?

·         Not being protected or insulated from a lawsuit – this is easily achievable by moving from “sole proprietorship” to “LLC” or “S Corp.”

·         Ideas are copied by someone else b/c the ideas, known as “intellectual property” weren’t protected or enforced properly.

·         Non-compete clauses are not entered into with a partner or key employee at the time of engagement and when they depart they use their experience with you to become a competitor. They can poach clients/customers, too.

·         Not having people sign a Confidentiality Agreement whenever possible

·         Making representations that are too grand and unrealistic with investors, which can lead to shareholder hostility and worse

How important is an attorney to a small business?

·         Very. That’s why attorneys are so damn wealthy – they’re needed!

If a SBO finds themselves in a legal matter are there any resources they can go to for help?

·         Attorney is first stop. If no attorney, call around people who you trust and ask for a referral.

·         Internet is valuable but can be hit/miss in terms of reliable information

·         If a legal issue arises, I recommend making that your leading priority until you’re certain that it’s not a significant threat. Left untended to, a legal situation can drown you. This is one area where you always want to be extremely vigilant.

Insurance

What are the biggest insurance mistakes SBOs make?

·         Not getting coverage, especially basic liability coverage

·         For investors, it’s effective to indicate to them that you’ll have “Key Man” insurance. Helps them manage their “downside” in the event that you’re incapacitated.

·         Not getting coverage for a home-based business b/c you assume your homeowner’s insurance covers all your stuff.

·         Skimping on healthcare coverage. When a medical situation arises, don’t let it eat your finances. As pricey as it is, it’s better to bear the burden of healthcare costs over a longhaul than it is to get slammed all at once.

What is the bare minimum that a SBO needs?

·         Healthcare

·         Liability coverage

·         Short-term/long-term disability

Natural Disaster

Obviously, these are unforeseen, but how can SBOs prepare for them?

·         Have an emergency procedure in place for you, your team and customers who may be present/impacted.

·         Establish communication and rendez vous points

·         Sounds crazy, but each year thousands of people get blind-sided. You always think, it happens to other people, not me… but alas…

What resources are there for disasters?

·         www.Ready.gov – they provide both business and personal disaster planning advice and materials

Management / Employee

What are the biggest management / employee problems?

·         Most employee problems result from poor selection and management

·         Theft of intellectual property

·         Sharing of proprietary information

·         Stealing

·         Working under influence of drugs

·         Employee-employee discord

How do you handle a major employee crisis?

·         If there’s mutiny on the bounty or one bad apple, individual meetings complemented with group meetings are effective. Anytime something goes awry, it can be a great learning opportunity for everyone else as long as embarrassment is avoided.

·         If the employee has an emergency (is that what you mean?!), treat them like a family member.

It may have taken the shape of a loss of data, or a short-fall in needed cash. Perhaps it was a lawsuit or a personal medical situation. Who knows - it could’ve been an unexpected tax hit or maybe even a key customer pulling back from a large order that you’d considered “in the bag”.

We had our own crisis last month when this website was attacked and disrupted by a “hacker-bot”, a new term for me and one I’ll always wince at when I hear it in techie conversations.

This coming week I’m going back on CNBC’s The Big Idea to discuss how to deal with crises like those mentioned above. I’m wondering if any among you would like to be featured on the program to ask your burning question about how to deal with a crisis you’re experiencing. The show will air next week on Tuesday, barring any pre-emption.

So, anyone dealing with a crisis at their business? Been through one recently and want to avoid similar situations in the future? Please share your comments below and/or volunteer to be considered for the show by satellite uplink from your town’s local TV station.

If preferred, as an alternative, you can use this link to contact me, too.

Rich

So here are a few thoughts on backing up from a businessperson’s perspective. (Note: I’m not an IT person!)

There are lots of ways to back up your data. I use a little program called SmartSync to keep my notebook computer (home and travel use) synched with my office computer. The software keeps track of which files have changed since the last synchronization, and pops them onto a little 2gb thumbdrive. When I plug the thumbdrive into the other computer, all the files get synched up, including my email. So the inbox and outbox look just as they did when I left the office, or vice-versa. This has the added benefit of keeping two complete copies of all my stuff in separate places, so fire or theft should never result in data loss.

Another approach is a removable hard-drive. I just came across the new Free Agent drives from Seagate. The drives are cool, and the site also uses some fun Flash functionality.

Thanks to everyone for your comments and observations. Entrepreneurs are cool.

Large corporations have massive IT departments to support their systems. Solo operations can usually get by with a consumer-grade setup. Those in between need help, especially if you are growing quickly.

One of the biggest risks faced by a small business is data loss. Imagine losing 2 years worth of accounting records, presentations, emails, letters, and design files that took you hundreds or thousands of hours to create. The consequences range from painful, to disastrous, to business fatal.

One of the best ways to prevent data loss is to have your mission-critical info stored in what’s called a "RAID." It stands for Redundant Array of Inexpensive Drives. In its simplest form, your data is spread among a number of hard drives that work together to make sure that each bit of data is stored on at least two separate drives, so that if one dies, your data is safe. Great idea, but hard to manage if you aren’t a techie.

Blogging pioneer Robert Scoble alerts us to a new data-protection solution that might be particularly well-suited to small businesses without sophisticated IT departments. It is a RAID data storage solution that doesn’t require an IT expert to manage.

Check out the Drobo.

Andrew Field is President of PrintingForLess.com, known by its thousands of happy customers as "America’s Print Shop." He works and lives along the Yellowstone River in southwest Montana.

A study showed that one out twenty people who received e-mails “phishing” for personal information fell victim to the scam and half of those fell victim to the crime–losing $600 on average to the scammers. It’s easy to respond to the wrong e-mail when you are a busy start up owner–plus they look like they come from your bank or credit card company.

A friend of mine is a global security expert for a major corporation. He says there are thousands and thousands of people out there trying to get into your computer. They have mega computers that run 24 hours a day looking for a weak link that they can exploit. It may be to use your computer to send junk mail, or maybe to look for sensitive information in your files. They may "phish" for private information like your credit card number of Social Security number so they can steal your identity. They may just install malware that causes pop ups.

The latest threat to cyberlife is called "pharming." You type in a legitimate web address but are redirected to a bogus site that steals your data. The bad guys have to get into your computer and install some malicious software to make it work, so don’t be lazy or careless about keeping your computer protected.

An article in the Christian Science Monitor says your best defense is to keep your antivirus and antispyware programming up to date (though they are not perfect at preventing these things, I can attest to that for sure). Also, you should be able to confirm you are on a real site by clicking on the lock symbol in the corner of the browser and confirming that it shows the address you intended to visit. The address bar should begin with "https," not simply "http." The Business Software Alliance has a newly developed website to keep us informed.

Be careful out there! And please, share your experiences to help the rest of us!