Business Record - Iowa Biz

Building improvements - when your walls come tumbling down

Congratulations! You are a new business owner. 

You have secured financing from your local bank and are ready to find that perfect location to operate your business.  You find out that retail space is very expensive and somewhat limited but decide on space in a new strip mall going in close to your residence and in an area that has great curb appeal.

You meet with the landlord and find out that your space is actually a rectangle consisting of 1200 square feet. 

“Where are the walls?” you ask. 

After a little more discussion, you find out that they can be put in to meet your specifications. The cost is $25,000.  Yes, this is your cost.  Let’s call it an improvement or betterment.

Although a tenant may have made or paid for improvements and betterments, they ordinarily become part of the property of the landlord as soon as they are attached to the building. 

Finally, things are in place and everything is running smoothly.  Customers are starting to notice your prime location and you are getting walk-in traffic.  Then the unexpected happens. 

There is a car accident involving two cars that occurs in the front of your building.  One car ends up in your store causing damage to your office by fire.  The owner of the car that went through your store is uninsured and has no assets.  Where do you turn for coverage?

You call the landlord and he says he carries insurance and will call his agent. 

Meanwhile you also call your agent because you have no place to work. 

Your agent files a claim as well. You have some business interruption and extra expense coverage that will soon be kicking in.  As time goes by you notice that reconstruction of your office is underway. 

You walk in but there is no ceiling, no walls, no fixtures.  Remember, this is a new building and your landlord did not add to his policy any work that you did to improve the location. 

When you called your agent, he came in and never asked about any improvements to the location.   They thought that was the way it was when you signed the lease.  Welcome to your 1200 square foot space again.

In past blogs I have spoken of business interruption and extra expense.  I have also mentioned it is in your best interest to read your lease and communicate with your landlord as much as possible. 

In this case, I want to point out a coverage that can help you.  The coverage is improvements and betterments. 

This category covers a tenants, "use interest"  in improvements and betterments that the tenant has added to the landlord’s building.  These improvements generally change the property and enhance its value and ordinarily become the property of the landlord as soon as they are attached to the building. This is where the term "use interest" comes from.

This leads into the Leasehold Interest Coverage Form that will be discussed in my next blog.

Eat Your Veggies; Enforce Your Tasks

One of the most valuable lessons of project management came as a child at the dinner table. 

Let's face it:  very few children like to eat their vegetables in this McDrive-Up world of fast food.  Until I was married, I honestly thought the four food groups were grease, fat, sodium, and cholesterol.  But all too often, because she knew it was good for us, my mom would serve us vegetables.

Mind you, to the typical eight-year-old, vegetables of any variety in any quality are often perceived as ... well... gross, at best.  But I learned to eat them quickly and get them out of the way.  Why?  Because as unpleasant as they were piled piping hot on my plate, they were absolutely unbearable if they were allowed to grow cold.  There was truly nothing worse on this planet.

On projects, we all have tasks that are unpleasant.  Nobody wants to get them done.  They may involve filing government paperwork or filling out permit applications or sorting through historic data to find one minuscule fact.  Tedium!  But... if left unchecked, that same task could end up taking twice as long and costing four times as much due to penalties, estimate overruns, fines and interest, or lost opportunities.

How much of a stickler do you need to be at enforcing deadlines?  Well, it depends on whether you actually like cold and slimy asparagus, whether you want your eggplant looking like over-exposed road-kill.  (Sorry, but the imagery was too good to pass up... I hope you weren't reading this around dinner time.)  Really, it depends on your consequence-tolerance level should you let deadline after deadline pass without penalty.

People are people, regardless of age.  I found a great new blog post by a teacher where she talks about her mentor telling her that assignment due dates should never be enforced: 

Students are faced with deadlines all the time. "You can not play with your friends until you put on a coat." "You have to earn your allowance money before you can go shopping." They watch their heat being turned off in their apartment because mom or dad couldn't pay the gas bill by the 15th. Coach makes them run an extra lap because they were the last one to practice. Auntie burned the pie again because she didn't take it out when the timer beeped.  We are a culture of deadlines; when time lapses past the deadline and the task is not completed direct and indirect consequences happen. Middle school students understand this, perhaps what they have a harder time understanding is how to function without the deadline.

And so it goes with project teams and tasks.  There is one tool that I use consistently on projects that keeps the number of late tasks to a relative minimum:  The Late Task Report.  I create a report that shows which tasks are late, when they were due, and who is responsible for completing them.  Then I distribute the report far and wide:  the entire project team, project management team, company executives, CNN, Fox News, Wall Street Journal, The Weather Channel.  The result?  The team members HATE having it published to executives that they are behind on tasks.  They complete the task as quickly and accurately as they can, without much additional prompting from me.  The report itself works as a kind of "bad cop" to motivate behavior.

So... how are you doing at eating your veggies in a timely fashion?  Is it a project that you can stomach?

Carpe Factum!

Accentuate the Positive!

Everyone who knows me knows that I can be a bit of an eccentric. In high school and college, while my friends were banging their heads and teasing their hair to new heights, I was listening to jazz and gaining an appreciation for big band standards. Perhaps that's why, on the heels of yesterday's post on QAQnA, I woke up this morning with the old Johnny Mercer classic going through my head...

You've got to accentuate the positive
Eliminate the negative
And latch on to the affirmative
Don't mess with Mister In-Between

You've got to spread joy up to the maximum
Bring gloom down to the minimum
Have faith or pandemonium's
Liable to walk upon the scene

I'm constantly amazed at how we, as human beings, focus on the negative. I've been call coaching all week, and while the vast majority of sessions have gone well, I found myself brooding over a couple of the more challenging sessions rather than celebrating the many sessions that went really, really well. I likewise find that people expend all their mental and emotional energy focused on a few negative customers rather than celebrating all the wonderful interactions they've had that day.

Sometimes we need a visual reminder help adjust our thinking. Keep a scratch page next to your phone or next to your cash register. Put a hash mark down for every positive customer interaction and negative customer interaction you have. At the end of the day, look at the tally. I'm confident that, most days, the positives will far outweight the negatives. Walk away from your desk/counter recounting all the GREAT interactions you've had that day. (If the negatives outnumber the positivies, perhaps it's time to brush off your resume!)

Creative Commons photo courtesy of Flickr and Dave.

Omgili & Google partnership combines objective and subjective search results

When developing social media strategy for clients, I often talk about listening before talking. As with any marketing effort, it helps to know the general wants and needs of the customer first, before jumping in.

Traditionally this would take the form of consumer research, surveys or focus groups. Today, with all sorts of social mediums inviting peer-to-peer conversation (such as blogs, wikis, message boards and social networks) companies can listen to what's being said about them in real-time.

There are many listening / buzz trending tools online, ranging from the free (Google BlogSearch and Twitter) to the high-end (Radian6). One application that has emerged as particularly useful for me recently is the search partnership between Omgili and Google.

Omgili, to put it simply, is a search engine that tracks opinions, discussions and conversations, as opposed to individual websites and pages. At google.omgili.com, you can see how they've paired subjective search results (perception, arguments, opinion, sarcasm) with Google's objective results (facts, raw information).

It's a nice blend, especially for marketing and PR folk. Just type in your company's name and click "search both" to see what customers are saying, right now.

Consumer insight like this is invaluable, and it gives your organization an advantage in the long run. The best part: Omgili is a free application that you can start using today.

Link: Subjective + objective search results: google.omgili.com

Nathan T. Wright

Want buy in?

This is the time of year when new marketing initiatives are being hatched and launched.   Many of you will be relying on your foot soldiers (read: front line employees, customer service representatives, sales force etc) to carry forth the plan and bring back the bounty. For most of us, our employees play a pivotal role in either our marketing success or our marketing failure. They're the ones who interface with our customers.

So why is it that when we're about to launch a new marketing effort, the employees are often the last to know?  Many times, they'll see your TV spot on the air or see a direct mail piece in their own mailbox and think, "hmm, I didn't know we were doing this!"  That's crazy but it happens every day. 

If your marketing team does not have a system in place to always introduce your efforts internally first, you need to create one.  Think of it as an informal training opportunity and pep rally rolled into one. 

Nothing feels better to an employee than when they're clued in - made to feel like an insider.  Once you make them feel included, they're going to be much more interested in learning what you need them to know, to deliver on your marketing promise.  Don't just show them the communications tool - explain the why's and how's behind the project.  Then, get them excited about it.  Help them see the potential results if you're all successful.  Most important, help them see how they can play a role in achieving the results you all want. 

This is a simple, no cost fix that will reap you many a reward.  Don't dismiss it. 

Who Owns Your Website, part two

You Know What You Did
My last Who Owns Your Website post was very well received. The jist of that post was that unless your website was created by your employee in the course of employment OR you obtained a written assignment of all rights in the website, you probably do not own your website. That post covered those parts of your website that you honestly thought you owned, but as it turns out, you do not. This post covers things you probably knew you did not own, but thought you could use without getting caught.

Here are the excuses I hear when people get sued for infringing someone else's website design. I thought it was okay because:

They Gave Me an Inch
You paid a designer for work on a website. Now you want to replicate that design across several websites, and possibly even license it to others. Although you paid the designer for the work, you do not own the work. You merely have an implied license to use the work for its intended purpose. Whether that "purpose" includes use in other projects and/or sublicensing is a question for a judge or jury to decide. To avoid getting to that point, obtain an assignment of copyright up front, or at least detail in writing exactly what you can and cannot do with the design.

BadgerMan69 Said it Was Okay
Often an employee or a message board commenter will attest to the availability of design material for public consumption. "Fair use", "public domain" and/or "I am the author", are all common justifications. The problem is that the person authorizing the use typically has little or no knowledge about intellectual property laws. While you might possibly use this "authorization" to convince some judge you were an innocent infringer, this defense merely reduces the punitive damages and other side's attorney fees you might have to pay. Even an innocent infringer still has to pay compensatory damages and their own attorney fees.

All My Friends Jumped Off the Bridge . . .
A lot of website infringements stem from the perception that since everyone else is doing it, it must be okay. This can easily get out of hand. Say a website owner licenses a particular design. An unscrupulous competitor then sees the design and steals it for his or her own website. A third ethical, but non-intellectual property savvy, competitor sees the other two designs and assumes the design is fair game. The process continues until everyone but the original licensee is in federal court defending themselves against claims of copyright infringement. BTW/if you find yourself in this position, resist the strong temptation to explain to the judge that you only broke the law because everyone else was doing it too. 

I changed 25% of the Design
I have no idea from where these urban legends originate. There is no law which allows you to copy something if you change "x" percent of the design. If it is substantially similar, you better rethink using it. This can be a big concern in the situation where the designer based the design on a pre-existing copyrighted work, merely creating a "derivative" from the original. The designer truly believes he or she owns all rights in the new work when they subsequently license the work to you. To avoid this problem, stick with seasoned designers, more likely to know what they can and cannot do with other people's work.

It Did Not Have a Copyright Notice
In the past, if you published a work without proper copyright notice, the work went into the public domain. No longer. With the advent of the Internet, people are constantly stealing other people's works and posting them online without proper copyright notice. The absence of a copyright notice merely provides you the opportunity to throw yourself on the mercy of the court and claim innocent infringement. You still have to stop using the work and you still have to pay stiff  damages and your attorneys, you just might be able to avoid paying punitive for punitive damages and their attorneys.

I am Not Making Any Money From It\Giving the Author Free Publicity
I believe this line of thinking originates with a misunderstanding of Fair Use. While monetary gain on your part and loss of income on their part are indeed factors to be considered in rendering a determination of whether a use is indeed "fair use", the rules are much more complex and their application mercurial. Remove "fair use" from your mindset; act like it does not exist. If you absolutely need to use something in a manner you believe is fair use, obtain a written opinion from a copyright attorney first. Even if the attorney determines the use is not allowed, he or she might be able to suggest legal alternatives.

Now, go off and infringe no more.

Brett Trout

Rebates -- phooey. Take some real stimulus.

By now everybody's heard about the "stimulus" rebates - $300 to $600 checks from the Treasury to you to jump start the economy.  But that's chump change.  The real money in stimulus is for businesses.  Two parts of the stimulus plan are directed at business.

1. Increased Section 179 deduction.  When you purchase a piece of business equipment, you normally have to capitalize the cost and recover it through depreciation over a period of years.  For most non-rental, non-real estate assets, Internal Revenue Code Section 179 allows you to elect to immediately deduct some of your fixed asset purchases.

For 2007, taxpayers could use Section 179 to expense up to $125,000 of assets that would otherwise be capitalized and depreciated.  The stimulus law doubles that amount for the first tax year beginning after December 31, 2007.  If your purchases of qualifying assets exceed $800,000, the deduction gets cut back.

2. Bonus Depreciation.  Not everyone can use Section 179.  Some passive investors don't get to take advantage of the deduction; some taxpayers just buy too many assets. For them, there is "50-percent bonus depreciation."  This applies to new assets that are normally depreciated over periods up to 20 years. 

Bonus depreciation is simple: you get to deduct half of the cost of the asset in the year it's placed in service.  You depreciate the rest under the usual rules.  If you have a $100,000 asset with a five-year life, you would normally get to deduct $20,000 of the cost in the year it goes into service.  Using bonus depreciation, the first year deduction is $60,000: half of the cost ($50,000) is the bonus, and the remaining $50,000 is depreciated under the usual rules.

Bottom line: if you have a business, the stimulus doesn't stop at $600.

What is Yours is Ours

I gave a presentation recently at PSIS.

I had a wonderful time and I've received awesome feedback from those who attended. (I've even got some feedback from others who weren't there) Another testament to a network?  I don't know.  It's a testament to the wonderful people that get up every day looking for ways to improve themselves and others.

As I reflect back and believe you me... I'm reflecting and refining as we speak! I can't get this thought out of my head... It's not MY network.  It's OUR network.

We live in an unbelievable community filled with unbelievable people, places & things.  The longer we spend cultivating each other, the quicker we will all achieve the successes we are seeking.

Department of Labor Proposes New FMLA Regulations

The Department of Labor recently released new proposed regulations concerning the Family Medical Leave Act (FMLA).  Since the proposed regulations are 477 pages, it is nice that Ohio employment lawyer Jon Hyman has provided a excellent overview.

Jon simply has one of most informative employment law blogs around.  Here are his highlights of the new regulations:

Except in emergency situations, employees will be required to follow the employer's policy for notification of FMLA leave, eliminating employees' ability under the old regulations to take up to 2 days after an absence begins to notify their employer that they intend to take FMLA leave. This change will greatly improve employers' ability to plan and schedule around employees' medical leaves.

• Employers will be able to directly contact employees' doctors when employers have questions about FMLA medical certification forms that the doctors have filled out. Employers will no longer have to go through the employee as an intermediary, or retain their own doctor to contact the employee's doctor. While this change may have some effect on employee privacy, it will greatly improve the flow of information and streamline the ability of employers to make proper decisions based on full and complete medical information. This rule will also eliminate the expense and burden of companies having to retain their own doctors simply to ensure that a form is properly filled out.
• To employers' dismay, the regulations do not change the time increments in which employees can take intermittent leave, but do require that an employee using intermittent leave use the employer's regular call in procedure except in emergencies. Thus, employees will still be able to take intermittent leave in very short increments, continuing for employers the administrative nightmare of intermittent leave, albeit with some additional notice.
• Employers will be entitled to require employees to obtain certification of FMLA-eligible medical conditions twice a year instead of annually.
• Currently, the clock under which employees accrue their 12 months of service for eligibility has no time limit, even after multiple breaks of service. Thus, if I work for 6 months for a company, and return 10 years later, I am eligible for FMLA leave after another 6 months. The new regulations place a 5-year cap on years of service for calculating eligibility, except for military or childrearing leaves, or where rehiring is covered by a collective bargaining agreement.

Please note that I often find many small employers mistakenly believe they are subject to the FMLA regulations.  Generally, the FMLA covers employers with 50 or more employees, and employees must have worked for the employer for 12 months and for 1,250 hours of service during the previous year to be eligible for FMLA leave.  So be sure not to create a situation where you are responsible for FMLA leave if you are not required to do so.

As always, seek the advice of an employment lawyer in your particular situation.

flickr photo by mahalie

I'm Not Weird; I'm Just Not You

How we act and interact with the people around us at work each day depends upon our personality types

It's a fact. People are different from each other and no amount of getting after them is going to change them. Nor is there any reason to change them, because the differences are probably good, not bad. People want different things. They have different values, motives, needs, drives and urges.

People believe different things.

They perceive, understand, conceptualize, and think differently.

So of course, people act differently, as a result of different wants and beliefs.

We get this. We accept it. And we talk a good game when it comes to being open, accepting others' differences, and looking for a diversity of individual styles on our work teams.

But accepting others' differences day-to-day, when one personality type rubs against the grain of another, is a difficult thing to do for even the most open-minded individual. We find ourselves putting labels on our co-workers as a way of coming to grips with, and thinking about, our differences.

• He's a nit-picker.
• She's a motor mouth.
• He's a worry wart.

Ouch! What if we could talk openly about leveraging Bill's strengths as someone who's focused on the details --mitigating any analysis-paralysis-- rather than labeling Bill a nitpicker?

Or discuss the value of Sherry liking to talk more than Bruce does, without labeling her a motor mouth? Being analytical and verbal are not bad qualities but putting derogatory labels on them can make them seem so.

Personality profiling instruments -- like DiSC, Myers-Briggs, Predictive Index and scores of others -- help team members understand, talk about and learn to appreciate each other's differences. And this is important. Because if we aren't careful, we'll think about others' "different" behavior in terms of flaws or afflictions, and we find ourselves wanting to correct these flaws.

Our Pygmalion project then becomes to make all those near us just like us. You have never been guilty of trying to coerce a spouse or a child into being more like you, I assume. Yeah, right. The science of people differences and similarities is a fascinating one; there's always something new to learn and nuances to understand. And it's fun!

Think about the study of personality types and the US Presidential race that is shaping up. Politics is complex, and personality styles play an important role in our political decisions...whether we want to admit it or not. As a life-long student of leaders and their personality types, here's my take on the personality styles that win out when elections are fought out on TV over long periods of time:

• Candidates whose preferences are for extroversion -- meaning they focus on external concerns and draw energy from connection and communication --have an advantage. Think Ronald Reagan and Bill Clinton!
• Candidates whose preferences are for feeling judgments -- meaning they make decisions based on empathic, circumstantial weighing of human-centered values, rather than logic and analysis -- have a leg up. Think George H. W. and George W. Bush!

Fun, huh, and a little weird.

photo on flickr by HeBeDeBe