Business Education

Here’s the Most Important Takeaway from the Trump ZTE Fiasco

ZTE who? What? Wait just a moment. There’s headlines all over and most Americans don’t know what to make of the situation. In fact, it’s a bit confusing since it deals with a very boring subject. But, it’s really not that difficult to understand. Ostensibly, it’s the result of bad business practices, and it’s causing real-world consequences for a very large company. At the most basic level, it delivers a great business lesson, which many entrepreneurs would otherwise avoid. It’s an uncomfortable topic but it’s also a never-ending threat — complying with the law.

The Trump, ZTE Fiasco in a Nutshell

Of course, very few business owners intentionally break the law. However, this doesn’t mean it’s not possible to accidentally cross the line. (In fact, it’s entirely possible to inadvertently make a mistake, only to realize it when it’s too late. After all, there are so many laws, it’s nearly impossible to always be in-the-know, all the time.) Basically, the Chinese company, ZTE, sold its products to Iran and North Korea. Now, what triggers the trouble is the fact those products contained American-made components.

Today’s business owners have a wide array of concerns, not the least of which is turning a profit in what can be a volatile economy. However, financial success is of little consequence if the government compels you to dissolve your company for failing to comply with legal requirements. —Intuit Quickbooks

The net result is a colossal fine of $1.19 billion. Yes, “billion, with a ‘B.'” That’s the cost of violating trade agreements and it’s one which will surely make every international company take notice. But, such a financial penalty will put ZTE out of business. That’s where the controversy comes into play.

What to Do if Your Business is Out of Compliance

Now, let’s look at the core lesson here — operating a business within the confines of the law. Sure, breaking the law is not something you set out to do. Although, this doesn’t mean it can’t happen. If it does, here are some helpful suggestions for how to deal with a compliance issue:

Don’t try to hide it or ignore it. Whatever you do, don’t attempt to hide it or ignore it. The problem won’t magically go away. It will only worsen and that’s much more damaging. Face it, apologize, ask for forgiveness, take responsibility and do so humbly.
Get sound legal advice, right away. If your business does break a law, it’s not necessarily the end of the world. Sure, it’s definitely unpleasant and uncomfortable. But, that means it’s time to tackle it head-on, as soon as possible. Speak with a lawyer, if necessary to learn about your options.
Openly address the situation carefully. Chances are excellent your team members will learn about it at some point. Do yourself a favor and address it pragmatically. Just like when you fire an employee, there will be questions and you have a duty to provide answers.
Learn from your mistake and move on. While it’s a bad experience, that doesn’t mean it’s worthless. Take the opportunity to learn from your mistake and then put it behind you.

Have you ever experienced violating a code or law? What other advice would you offer about learning and getting past the experience? Please share your thoughts by commenting!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

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From Ketchup to Mercury: Medicinal Myths and Lessons for Small Business Evolution

December 26, 2024 No Comments

Throughout history, the pursuit of innovation has led humans down some surprising paths—sometimes with remarkable results, and other times with lessons learned the hard way. Two fascinating examples are ketchup and mercury, both of which were once hailed as medicinal marvels. Yep. That’s right. Ketchup and mercury were use as actual medicines.

Entrepreneurs Avoid the Top Mistakes that Put New Companies Out of Business

March 30, 2023 No Comments

Starting a new business is an exciting venture, but it’s important to be aware of the risks involved. According to research, about 20% of new businesses fail in their first year, and about 50% fail within five years. While there are many factors that can contribute to business failure, some are more common than others. Big Mistakes New Entrepreneurs should Avoid The numbers above aren’t the only ones that are out there. Other studies reveal the new business failure rate is as high as 75% (depending on how “failure” is defined.) However, most findings agree fewer than half will survive long enough to celebrate their fifth year in business. …being an entrepreneur and founding a successful startup is difficult. It’s a long and difficult road, and you will make mistakes, regardless of how hard you try not to. In fact, there are a few common mistakes that entrepreneurs make, especially during their first time attempting to start a business. Thankfully, the key to mitigating risk from those mistakes, and hopefully avoiding them altogether, is understanding as much about them as possible. —Forbes.com What’s more, of the less than half that do make it to their fifth year, a mere 33% of those entities will go on to celebrate their tenth year in business. So, let’s take some time to explore the most common reasons new businesses go broke and how entrepreneurs can avoid failing. Lack of Market Research One of the most common reasons new businesses fail is a lack of market research. It’s important to understand the needs of your target audience, as well as the competition, in order to create a successful business. Entrepreneurs who skip this step may find that their product or service is not in demand, or that they are unable to compete with established businesses in the industry. To avoid this mistake, conduct thorough market research before launching your business. This may involve surveys, focus groups, or other methods of gathering feedback from potential customers. By understanding the needs of your target audience and the competition, you can create a business that is more likely to succeed. Poor Financial Planning Another common reason new businesses fail is poor financial planning. Entrepreneurs may underestimate the costs involved in starting and running a business or fail to secure adequate funding to cover these costs. Additionally, some entrepreneurs may overspend on non-essential items, such as fancy office spaces or unnecessary equipment. To avoid this miscalculation, create a detailed business plan that includes financial projections and a budget. This can help you estimate the costs involved in starting and running your business, as well as identify potential sources of funding. It’s also important to keep track of your expenses and income and to adjust your budget as needed. Lack of Marketing and Branding Even if your product or service is high-quality, it’s important to effectively market and brand your business. Entrepreneurs who fail to do so may find that they are unable to attract customers or establish themselves as a reputable business. To avoid this blunder, create a marketing plan that includes branding, advertising, and other promotional efforts. This may involve creating a logo and website, networking with potential customers and industry professionals, and investing in online and offline advertising. Poor Management Effective management is key to the success of any business. Entrepreneurs who lack management experience may struggle to make important decisions, delegate tasks, or create a positive company culture. Additionally, entrepreneurs who try to do everything themselves may become overwhelmed and burned out, which can negatively impact the business. To avoid these missteps, hire experienced managers and delegate tasks effectively. It’s also important to create a positive company culture that promotes productivity, teamwork, and employee satisfaction. Inflexibility Finally, entrepreneurs who are unwilling or unable to adapt to changing market conditions may struggle to keep their businesses afloat. This may involve being unwilling to pivot the business model, invest in new technologies, or adjust pricing and marketing strategies. To avoid this foil, remain open-minded and adaptable. This may involve regularly monitoring market conditions, soliciting feedback from customers, and being willing to make changes when necessary. As we all know, starting a new business is a risky endeavor, but by avoiding common mistakes and implementing effective strategies, entrepreneurs can increase their chances of success. What other mistakes would you include and warn entrepreneurs about? Please take a few brief moments to share your experiences and more so others can benefit from your input! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Ways to Deal with Employee Theft

May 24, 2017 No Comments

One of the most unappealing things about managing a workplace is having to deal with ugly situations. Employee theft, or, internal theft is perhaps the single worst scenario to encounter because often times, you won’t know the extent of it, at least, right away. This behavior can take shape in a number of ways, including fudging clock-in and clock-out times, taking supplies without permission, or, even stealing money. While the latter might get your heightened attention, it’s the more subtle that can go on for much longer periods and cost more in losses. Ways to Deal with Employee Theft Make no mistake about it, internal theft is a huge problem in the United States. However, it is difficult to gauge because so much of it goes unreported due to embarrassed or recalcitrant employers. The average estimate ranges widely from $20 to $50 billion per year, with Fortune reporting in the retail sector alone, a whopping $32 billion was lost in 2014, with an amazing 34.5 percent of that being attributed to employee theft. Only shoplifting outpaced it, accounting for 38 percent. Whether it’s downloading and sharing company confidential information (a hot topic these days), manipulating expense reports, or stealing merchandise- employee theft and fraud is a serious issue for business owners. In fact, studies show that occupational fraud now results in the loss of five percent of an organization’s annual revenue. —U.S. Small Business Administration While it’s an unpleasant experience to-be-sure, it nonetheless exists, and, in practically every workplace. The level, though, might be very minute, like the employee who occasionally takes a few postage stamps for personal use. When it comes to bigger issues, it’s not unusual for the owner and/or manager to be taken by surprise. After all, you do what you can to screen and interview every new hire, but sometimes, it’s not enough. The primary reason for this is a simple necessity, especially for small business owners who need to delegate responsibilities. They just don’t have the time to do it all on their own, so, they leave certain things to employees. This creates an atmosphere of opportunity where trust can be easily breached. When that happens, here are some ways to deal with employee theft: Evaluate the situation. When you discover the problem, it’s best not to jump to conclusions about the scope. It could just be a case of miscommunication or simply a lack of judgment. If you believe it to be serious and particularly one that’s ongoing, you should commit to take action. If it’s minor, you might consider issuing a written warning, placing him or her on probation, or, repayment. Document everything you can. If you discover supplies, inventory, materials, or money is missing, do everything you can to document what it is, when it happened, and it’s worth. You should gather as much evidence as you can to bring the situation to resolve. Phone your attorney or HR Consultant immediately. Dealing with internal theft is a serious matter and you don’t want to overstep your legal bounds. While you certainly have rights, you cannot afford to act in a rash manner. Call your lawyer and ask about what options are available to you. Call the local police or sheriff’s department. If your legal counsel instructs you to contact the local authorities on their non-emergency line, you should do so right away. While this won’t likely resolve the issue immediately, it will be a step in the right direction. Get in touch with your insurer. Another one of the first phone calls you should make is to your insurer to learn exactly what coverage you have in-place. You might have to file a claim to recover most or a portion of your loss. Once the initial work is done, consider how you’ll deal with preventing the same problem from occurring in the future. You should also discuss the matter with key team members and think seriously about how to present the issue and your reaction to others in your business. As a Leader, it is important that you don’t allow this to become office gossip, get out in front of it, and demonstrate your commitment to your company and how you reward good work and the consequences for theft. Want to find out about what a business coach can do for you? [shareaholic app=”follow_buttons” id=”26833294″]