If you were to ask just about any business owner if their employees should receive equal pay for equal work or could be paid differently, based on gender, race, color, religion, and national origin, I’m certain that most would reply, “What are you talking about? Equal pay for equal work is the law. If I respect this concept of equal pay for equal work, I’m good, right?”

Well, not so fast.

Employers today are facing pay concepts that could upset the apple cart in many organizations. Recently, several states enacted Pay Transparency laws requiring companies to be open about compensation for current and prospective employees.

Companies may share compensation information, including how salaries are determined, ranges, and even individual employee pay. But they must not conspire with other companies in the same field to keep wages low.

“Today, a lot more has been added to the concept of equal pay for equal work,” observes Northern California employment attorney and author, Heather Bussing, “that, if not understood by employers, can lead to an unpleasant work environment at the least, and potentially expensive litigation at worst.”

She and co-author Kent Plunkett in Get Pay Right – How to Achieve Pay Equity that Works, provide employers with an easily accessible approach to meeting today’s requirements on employee compensation. The concept is known as pay equity and goes beyond equal pay for equal work, the law since 1963.

In a nutshell, individuals should be compensated fairly and impartially for their work regardless of factors such as gender, race, ethnicity, or other characteristics unrelated to job performance.

Sounds simple. Right?

A Variant of Teacher’s Pet

“A worrisome issue labor lawyers often find is the employer who pays people they like more and not based on their work or the value they bring to the organization,” Bussing points out.

“When others who aren’t teacher’s pets, realize this–doing exactly what they’ve been asked to do, and maybe even better, but they’re not paid fairly for it, bad stuff often starts to happen.

“They grumble. There is unrest. No employee wants to be treated unfairly, and so they focus on how they’re being treated at the workplace rather than their work. Productivity suffers, your customers suffer, and as time goes on you lose employees. And then you’re out of business. So, it is in a business owner’s best interest to pay all employees fairly.”

But what does that mean? How do you determine what is fair?

The Economic Value of Work

“We look at the relative importance of the work–the value employees contribute to an organization and its success,” Bussing says.

“For example, salespeople are some of the highest paid, having the most direct connection to revenue. They need people who create the products, marketing colleagues who make customers aware of the products, and administrative assistants who keep everything going in the organization.

“Often we overlook the value of the work brought to the organization by employees in their individual capacities – the value of each and their work in the chain of creation,” she underscores.

Are We Paying Our People Fairly? – The Pay Equity Audit

How can an employer know if compensation is fair to everyone and avoid being sued for discriminatory pay practices? Get Pay Right gives us a by-the-numbers approach, and Bussing notes, “It’s a lot like trying to figure out how to compare houses, but instead of bedrooms, bathrooms, and square feet, we look at skills, effort, responsibility, and working conditions.”

What companies should do

She recommends that employers should value the work, not the people doing it.

Establish each worker’s expected skills, their level of effort required, responsibilities and working conditions. Study the market and learn what people in related jobs are making.

At this point, the authors recommend: “Group comparable jobs and run a statistical analysis to see where pay gaps are and whether they correlate to race or gender — whether women and people of color are making less for the same work.”

With pay gaps identified, “Determine if there is a business reason for why those people make less than others doing similar work, such as having less experience or tenure. Sometimes the person making more has special skills that justify the additional pay.”

Doing a pay equity audit will tell you where the outliers on pay are and whether there is a statistical correlation to race or gender.

Concluding our interview, Bussing notes that, “Pay equity laws apply to all employers regardless of size. Companies with at least 100 employees should do regular pay audits, which can be accomplished with specialized software.”

Bussing is a lawyer who never gave up her goal of changing the world for the better. She is all about fairness. Get Pay Right shows employers how to achieve it when determining pay and keeping themselves out of trouble.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Are you paying your employees correctly? appeared first on Dennis Beaver.

“Mr. Beaver, my husband, ‘Leroy,’ is a high school history teacher and just inherited $50,000. He wants to use it to open a business but does not know what kind of business.

“I grew up in a family that still owns several small neighborhood hardware stores, started by my grandfather, so I know a lot about what it takes, but Leroy has no business experience at all.

“When I ask, ‘Why?’ he replies, ‘I need to prove myself to your family.’ Do you know someone who can share what it takes to start a business that is sure to fail? Thanks, ‘Bea.’

There is another way

My reader’s email could not have arrived at a better time, as I was just about to interview David Whorton, Silicon Valley entrepreneur and author of Another Way: Building Companies That Last … and Last … and Last.

Whorton offers a refreshing approach to building a business that endures, also known as an evergreen business — the goal is to put people first. “There is another way to build a successful business than the current philosophy of ‘bigger, faster is always better,'” he says.

He shares with us how to start a successful business by setting out the steps that can contribute to failure.

Failing to conduct a risk assessment

Don’t leap first, figuring that you’ll simply work out the details later.

Risk comes in four major buckets:

• Market

• Team

• Technology

• Financing

A would-be owner needs to ask themselves many questions related to these four buckets:

• Do you understand the market, the intended customer and their willingness to buy?

• What will be required from all the technologies your product or service will rely on to be differentiated?

• Where are you going to find the good people you will need on the team?

• Will you be able to build it from its own cash flow or need to raise outside capital? If outside, what is the likelihood of successfully raising the funds required?

• What does your product or service and the products or services associated with it cost? How will you provide service and support?

Not knowing the answers could inevitably lead to your business failing.

Quitting your job and having no income separate from your new business

Your job and current paycheck might provide you with a safety net. “If you can continue to bring in income while building your company, you will give yourself more time and much less anxiety,” Whorton underscores.

Not thinking through the business model

Whorton cautions against relying on what you see in other, similar businesses. You need to think about what you want to achieve and resist using the industry-standard business model.

Consider which business model is best suited to your concept, your business and your funding strategy: For example, retail, franchise, third-party distribution, marketing-driven and direct-to-customer (internet) sales all have different benefits and cash requirements.

If you want to build an evergreen business — one that will endure — you’ll want a business model that generates cash early and does not rely on outside equity or debt.

Falling into the ‘if I build a great product or service, they will come’ mentality

Ask: How am I going to get this product in front of my customers? Through stores, partners, a third party, field sales representatives or other sales or marketing programs?

Biting off more than you can chew from an emotional perspective

Are you psychologically able to deal with the people issues that arise in any business?

Being a founder can be a lonely and very stressful process for a number of years. There is a lot of uncertainty associated with establishing and running a business. For example, Whorton says, “You lose a major customer, half your revenue vanishes, and you think, ‘Oh my gosh, if I don’t have a strong balance sheet, I have to lay off people! I just can’t do that!'”

Ask yourself and the people who know you best: Am I ready for these challenges at this stage of my life?

Feeling threatened and therefore not hiring people who have more experience than you do

Whorton points out that you need to hire people who can help your business succeed. “Just because you get along on the local baseball league team does not translate into that person being a competent, honest sales representative. Hiring people whom you are just friendly with, but you know little about their character or capability, spells trouble.”

Don’t ignore red flags, such as “I know that he never stays employed at the same place for more than a year, but I really like him, and he has a lot of cool things to say about how he works.” The fact that this person has not survived in one place for more than a year tells you that something’s wrong, and you have to dig into it.

Remember that character counts. “When you get good people with great character, take care of them and let them shine,” Whorton underscores.

Going into business because you feel it’s expected of you, including joining a family business

Running a business is hard, so you should really want to do it.

You want to go into the business with the attitude, “This is my purpose in life — I want to have a team that is allied with my vision and values.” A red flag is someone saying, “I’ve got this idea. Now, I’m not really in love with it, but it seems to have some traction, so I’m going to run with it.”

An inspiring read

Whorton concluded our interview with these comments: “If you are starting a business, ideally, it is one that you want to dedicate the rest of your life to. That’s the secret to evergreen companies that endure well over a hundred years.

“My advice to college students who are vaguely thinking about getting into business one day is to develop a curious mind and consider yourself to be a lifelong learner. Pursue a well-rounded education and discover the common denominators of prior and current business leaders — what helped them succeed?”

Reading Another Way was as inspiring as my interview with its author. Whorton’s candor made me feel as if we’d known each other for years.

If you are thinking of opening your own shop, Whorton shows you the way to building that place on the planet you will love to return to every day.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Building a Business That Lasts: The Critical Steps to Avoid Blunders appeared first on Dennis Beaver.

Most people understand the risks of being a cosigner for a car purchase or lease. But how should you reply if a good friend or a close family member says, “Will you please be my guarantor — not cosigner, just a guarantor — for the apartment I would like to lease?”

Is there a difference?

“Mr. Beaver,” “Nick” began in his phone call, “I’ve read your column for years and need some guidance. My nephew, ‘Mitch,’ is 42 and has a horrible credit score. He had difficulty in the past paying bills on time, but recently cleaned up his act, has a good job and steady relationship and appears to be on the right financial path.

“He wants to rent an apartment for himself and his girlfriend. Both of them work and have good incomes. He was told to find a ‘guarantor,’ or the management company would not lease him the apartment.

“I am being somewhat pressured by family to take on that role, and they tell me that, at most, I would be responsible for one month’s rent if he defaults, and then I could walk away. I can live with that — but is it correct? Is there a difference between a cosigner and guarantor on a lease?”

What Nick did not know about his nephew?

I said, “Nick, let’s do some due diligence research on Mitch right now. If he’s been sued or has gotten in trouble criminally, it will be on the Superior Court Civil and Criminal Filings index, so turn on your computer.”

We found many entries about Mitch — two bankruptcies, lawsuits and judgments against him going back years, several because this jerk pays rent for a month and then stops, becoming a squatter.

He has written checks galore on closed accounts, and his name appears on the Criminal Register, which shows that he did time in the slammer for the bad checks —which Nick knew nothing about.

“Yeah, I see all that,” Nick said, “but I still feel almost forced to help the kid.” That history should have scared the pants off of him.

“Nick, he’s no kid. He is trouble, so let me fill you in on the nonsense you were given about being liable for only one month’s rent as a guarantor.”

There are differences

I explained to Nick that a cosigner has equal responsibility for the rent or other financial obligations, and this begins when the agreement (lease or purchase contract) is signed. With a lease, cosigners are considered to be tenants and may live in the property.

A guarantor might sign a separate agreement, assuming responsibility for the debt only if the primary borrower defaults. They do not have the right to occupy the property. So, at first glance, it might appear that serving as a guarantor is fairly safe — the financial exposure is much less than that of a cosigner.

That said, it is very common for real property leases to make a guarantor’s legal obligations virtually identical to those of a cosigner. In my experience, if a guarantor rejects those terms, property managers will pull the plug on the entire transaction. It becomes a take-it-or-leave-it situation.

Think before being pressured into being generous

“Nick,” I said, “we all need to get real — very real — and ask ourselves the following questions when someone requests us to cosign or become a guarantor, especially if the person has already proven themselves to be an irresponsible flake or are at the beginning of a romantic relationship.”

• Why do they need my help?

• Are they, or other family members, putting a guilt trip on me?

• What did they do to put themselves in a position of needing a cosigner or guarantor?

• Will they hit up someone else if I refuse? (They will.)

You should also accept that you are not this person’s guardian angel — they will survive without your help.

Why would you accept the significant financial risks that will likely impact your credit and mental well-being when — not if, but when — they default and you wind up getting sued for their debt?

Consequences at home: Relationship strain

Mixing finances with personal relationships often guarantees embarrassment, feelings of betrayal and the loss of trust when the borrower fails to follow through on promises.

It’s even worse if the borrower defaults on the loan and makes no effort to protect the generous family member who was there when needed — sometimes the borrower will even blame the cosigner for having the nerve to insist they repay their debt.

Even if the borrower is financially responsible, cosigning is a significant financial risk. If you are not comfortable with it, decline.

The bottom line is that cosigning or guaranteeing any financial transaction is a major commitment with real consequences. Seriously consider it only if you have absolute confidence in the borrower’s ability to repay and can answer yes to this question: Can you accept the potential risks to your own well-being and that of your family?

Finally, in a dating relationship, realize there are cons by the bushel who “just need a little help” in getting into that apartment or buying a car. Refuse.

When they say, “If you really loved me, you would help, but I guess you don’t,” you can think to yourself, “That’s right! I don’t have ‘sucker’ stamped on my forehead!”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Don’t Be a Sucker: The Truth About Guarantor and Cosigner Agreements appeared first on Dennis Beaver.

A recent article, Overbilled by Your Lawyer? You’re Not Alone, told the story of a lawyer whose firm touted expertise that she didn’t yet have and billed for time that she didn’t work. That story led to an e-mail captioned “Bravo” from Professor Nancy B. Rapoport of William S. Boyd School of Law, University of Nevada, Las Vegas.

Collaborating with Joseph Tiano, the founder and CEO of Legal Decoder, a legal data analytics company, the pair have written extensively about the reasonableness of attorney fees as well as on using time entries to predict risk factors for legal malpractice.

“Your story is a client’s nightmare,” Rapoport observes, adding, “but most lawyers do their best to serve their clients fairly and do not engage in that type of unethical behavior.”

Both lawyers proceeded to list five things clients need to carefully notice about any bill they get from their lawyer and what to do when something appears to be not right.

1. Did the right level of professional work on your matter?

Rapoport: The retainer agreement — the contract that you sign with the law firm — will state who is going to work on the case. For smaller matters, this usually means one lawyer. For larger cases, there could be several attorneys and paralegals. Generally, each one of those people has an hourly rate, unless you signed up for a fixed rate or other alternative billing arrangements.

Partners are the most expensive, while paralegals are the least expensive. Not every task has to be performed by a partner. Make sure that what’s done is performed efficiently by the person with the right skill level. Partners don’t need to be doing basic legal research, and associates (newer lawyers) don’t need to be the ones drafting complicated documents from scratch. Read the time entries and get a feel for who did what for you.

2. How many people in the office worked on your documents or appeared in court?

Tiano: In larger matters, there’s a tendency for several lawyers to handle a document — often far too many than can be justified. Or maybe there’s a big hearing coming up in your case. How many people attended? One? Two? Ten?

There should be a unique reason for each person “touching” your matter to add input or expertise. Don’t be afraid to ask what they did, because all of those people are “contributing” time at their individual hourly rates. In the end, the “reasonable” fee analysis partly hinges on the unique, independent value delivered by each legal professional.

3. How specific are the descriptions in the time entries on your bill?

Rapoport: Clients are entitled to know who did what and how long that “what” took. If someone just “worked on” your matter, you can’t possibly know what was done. Did they draft something? Edit something? Negotiate something? “Worked on” and “attention to” are meaningless phrases.

Make your lawyers use verbs that tell exactly what they did so that you can evaluate the reasonableness of the fees. This should not come as a surprise to anyone.

Every state has an ethics rule that requires attorney fees to be reasonable, so before you can decide if the fees are reasonable, you need to know what the lawyer(s) really did.

4. Did those time entries break down the time spent on each task?

Tiano: How much time did each task take? If you see “prepare for and attend” or the like, ask, “How long did the preparation take? How long were you there?” If lumped together, you have no way to evaluate if too much time — or too little, or just enough — the lawyer spent on “preparing” vs “attending.”

Judges typically won’t let a law firm “lump” those fees together (a bad habit also known as block-billing). You shouldn’t either, and if the law firm can’t recall how long each of those sub-items took, a discount is often requested and warranted.

It’s the lawyer’s job under ethical rules to tell you what was done, so any mistakes or ambiguities should be borne by the lawyer and not you.

5. Did the law firm use artificial intelligence to speed up routine tasks?

Rapoport: AI can be designed to automate certain routine tasks and to speed up other, less routine tasks. But a lawyer must be responsible for the work product generated by AI.

When it goes wrong, “hallucinations” (wildly incorrect results) can occur, and only a trained eye will be able to spot them. Lawyers must embrace technology that lets them spend less time on things that computers do better than humans do so that they can devote more time on the things that only humans do well.

At least one court we’ve seen has reduced a legal professional’s fees based on the failure to employ AI tools.

If you see a time entry that indicates that an associate has spent days looking for a particular type of clause in a contract, ask, “Why didn’t your firm use AI, which would have found that clause faster?” And then ask for a discount.

Remember math problems in high school?

Concluding our interview, both attorneys suggested that we recall our days in high school geometry when we had to “show our work.”

“Requiring lawyers to show theirs is just plain common sense,” Rapoport said, “and in so doing, you’re more likely to be paying a reasonable bill.”

The post Five Things to Notice in Your Lawyer’s Bill appeared first on Dennis Beaver.

If you’re thinking about becoming an entrepreneur, you may be wondering whether you’d be more successful starting a business or buying an established business.

“‘Start your own business, open your own shop’ has always been part of the American dream,” observes Josh Tolley, nationally syndicated talk show host and author of the recently published Acquisitional Wealth.

“Sadly, few people pay enough attention to statistics that show approximately 50% of start-ups fail within five years. However, if a business remains open for a decade, the odds are that it will survive and has the potential to be marketable. So, if you have the option of investing in a new business or buying a well-established, going concern, just think of the hassle, worry and grief that can be avoided. But you’ve got to go about it the right way, realize the importance of having your own support team, and don’t even dream of doing it alone!”

Don’t fall for social media instant experts

In recent years, a number of our clients have run their business ideas by my staff — ideas and schemes, as Tolley correctly points out, “that often (stem) from a growing social media presence of insta-experts and coaches who sell do-it-yourself, expensive ‘how to buy a business’ courses, along with a list of several self-named resources that are available to buy now from their websites.

“Very much like the stock market mania of the COVID years, otherwise sober, mature adults act more like high school kids infatuated with their first love. This is where the failure to have competent, professional help and guidance can prove costly,” he says.

I asked Tolley to set out some of the most glaring mistakes anyone wanting to buy a business can make.

1. Follow the wrong advice and think you can do it on your own.

So many people are trying to go it alone, following the advice of an online business coach who says, “I can guide you in buying an ongoing business, so why pay for a lawyer or an accountant?”

The result is an epidemic of financial and legal problems. If you are buying a business, definitely use the experience of a broker, a transactional attorney and, if applicable, an accountant familiar with the dynamics of the enterprise. “It’s going to save you years of headaches, stress and possible legal ramifications to the business,” Tolley notes.

2. Buy retail or income-producing property.

The second most frequent mistake is getting into either retail or income-producing real estate. Tolley underscores, “Retail is not where you want to start, and you must accept the fact that there is a lot of unstable ground when it comes to retail. Restaurants are retail. Anything can upset the apple cart, from a pandemic to even construction on the road in front of the business/restaurant you just purchased.”

He makes a strong case in his book: “Make sure that you are purchasing a business that is not dependent on retail conditions, but instead depends on market or B2B (business-to-business) conditions.”

3. Think you’re going to be successful without going all in.

Contrary to other endeavors in life, if you’re going to acquire a business, jump in entirely or don’t jump in. “Once you have acquired a business,” Tolley points out, “you have to commit and really go for it. So often, I’ve seen the results of ‘entrepreneurs’ who tried to continue working their regular job. A variant of that mental process thinks, ‘Well, we saved $200,000 for a down payment, so let’s try $50,000 down to just give it a taste.’ That never works out.”

4. Change your team of advisers during the process.

“Don’t listen to your friends who might have owned one business once or who have no experience at all,” Tolley cautions. “This isn’t a time to get a consensus from friends and family. Unless they’ve done this successfully, their opinions don’t really carry a whole lot of weight. As many first-time buyers don’t come from a business background, their friends and family tend to have a similar lack of experience, and so their advice may lead down incorrect paths.”

How to prepare to buy a business

Before buying a business, you have to prepare financially by:

Keeping your credit score high
Not incurring any unnecessary new debt, such as a new car
Postponing any sort of credit hit until after the purchase
Ensuring your tax records are clean and up-to-date

Concluding our interview, Tolley shared a prescription for a successful business purchase by someone who has never before owned or operated a business: Start learning as many business skills and acquiring as much practical business knowledge as you can, rather than focusing on specific industry capabilities.

“Your overall business skill set is going to serve you much better in acquiring the company and running it successfully,” he says. “For example, with a restaurant, how to manage employees is going to serve you better than mastering a risotto recipe. Related and important skills will come with the business; knowing how to drive the business — like learning how to not just drive a car but race it and win — is now your goal.”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Four Big Mistakes to Avoid if You’re Buying a Business appeared first on Dennis Beaver.

There is an old saying: “The more you give your children, the more you take away.”

Today’s story began with an email from stay-at-home mom “Cindy” and her hard-charging, financially very successful, real estate broker husband, “Steve.”

“Our personalities are quite different. Cindy is quiet and non-assertive, while I am the bull in a china shop,” Steve wrote, adding, “Our three children — ages 7, 19 and 23 — have her personality. I do not blame them for that, it is just the way they are.”

Early signs of affluenza

“The kids have been raised in affluence, especially the two older ones. An expensive car at age 16, credit cards, given plenty of cash, and sadly, they became lazy. We bought a condo for our 23 year old son, and provide a large monthly allowance for him and his 19 year old sister, neither of whom has the drive to succeed that we did.”

The email ended with this plea: “We do not want this to happen to our youngest child. What can we do? We need advice. How can we put them all on a road to self-sufficiency, and avoid further financially enabling and making them dependent? We now see how money can be a curse.”

Four key lessons for kids

I ran these questions by Southern California-based financial counselor Scott Thor who complimented the couple for addressing the problem now with their 7-year-old.

“There are four key lessons children raised in affluent families need to learn,” he points out. They are:

1. Understand about earning money. Instead of an allowance, put them on a commission, to get a sense of doing something to earn money for the work they have done.

2. Help them realize how saving money — not spending it now — makes it possible for a major purchase later. You want them to experience the joy and motivation of anticipation, picturing themselves with that new computer game, for example.

3. Explain to your kids the importance of having patience and being satisfied with what they currently own.  A lack of contentment with where you are in life materially often leads to overwhelming debt where credit cards become your worst nightmare, allowing you to spend way beyond your means. Another debt trap is leasing a car — that you never really own — with an interest rate of 20%. Why not save up for a car you can own outright?  This goes right back to patience.

4. Teach your kids not to hoard money, but to think of others, to give, and to be charitable. When we look at wealthy families, one of the things that differentiates them from people who are not as good at managing their financial resources is their understanding the value in giving.

Dealing with adults

I asked Thor, “For their adult kids, what can they say or do, or is it too late?”

“Dealing with an adult it is much harder,” he underscores. “As parents you have to accept the fact that, ‘It is not entirely the kids’ fault as we have enabled their dependence on us.’

“You’ve got to cut it off but you can’t do it cold turkey; You must set goals and help them become financially independent, able to live on their own income and not your  money,” he observes, and lists the following two steps to follow when discussing these issues with an adult child.

1. Take part of the blame, for example, “I have not done such a good job when you were younger. Now we have to work toward you becoming independent.” Share that conversation with a friend or your spouse to see their reaction before delivering it to your children.

2. Set a plan in motion.  Create a 6 to 12 month plan.  Help them get on a budget.

Financial coach can help

Thor explained that the goal of a financial coach is to educate clients about personal finance and help them develop a spending plan suited to their goals and values. “We show our clients how to take responsibility for their decisions, remain a source of financial advice, and require accountability from them.”

Thor, who has been a business consultant and financial coach for over ten years, holds a doctorate in management from Newberg Oregon-based George Fox University. He concluded our interview with this warning:

“The parents absolutely must stick to what they have stated in their intervention. If not, their own financial ruin is a real possibility. It is sad beyond words to see couples not far from retirement cash out their IRA’s, sell their homes, getting into financial trouble themselves just to give money to their kids.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post How not to financially paralyze your children appeared first on Dennis Beaver.

“I work for a business strategy firm that encourages input from employees on ways of expanding our menu of services. Every few months we have ‘Pizza and Proposals Day,’ where employees are encouraged to pitch new marketing programs.

“After lunch we listen to presentations from colleagues; some, well-researched, feasible — while others, poorly thought out, damaging the employee’s credibility and their tenure. I have a couple of good ideas but do not want to make a fool of myself. Do you know of a guide, video, anything that would help me? Thanks, ‘Don.’”

Avoiding the Wrong Steps Enhances your Chances

Don’s question came in at the right time as I had just concluded an interview with Ray Sheen —author of the HBR Guide to Building Your Business Case: Tell a Compelling Story, Identify Stakeholders, Analyze Risk and Return.

In reading this excellent, by-the-numbers approach to turning a proposal into reality, it became clear that Ray understands the mechanics of reaching and persuading an audience of in-house decision makers to come on board with an idea developed by a colleague.

He is president of product and process innovation based in Greenville South Carolina. His firm trains and consults in the areas of technology deployment, and digital transformation. He is also an adjunct professor of business at the Southern New Hampshire University. With a BS in mechanical engineering from the U.S. Air Force Academy, a master’s in astronautical engineering from MIT, Ray Sheen is one of the most interesting people I’ve had the pleasure of interviewing this year.

Don’t Do It the Wrong Way

I asked him to set out what must be avoided if that new idea or concept is to have a real chance of acceptance.

1 – Fail to know your audience. Assume they will understand what you are talking about.

Consequences: Without explaining what parts of the business are being impacted and how your idea will make money – it will neither be understood by decision makers nor approved. So, find out who sits on the review board, and their level of education, experience and responsibility in the area you are discussing.

2 – Fail to know management’s hot button issue.

Consequences: What is the major strategic initiative they are working on right now? Popular ones today are: Sustainability, ESG (Environmental Social Governance) and Supply Chains. If your proposal impacts one of these, they will be interested, and if it does not, they might not.

3 – Fail to explain the results of both doing/not doing the project in financial terms:

Consequences: If they don’t see a negative consequence to idly standing by and doing nothing, they will take on some other project, not yours. Always keep in mind that money is the language of business.

4 – Fail to present your proposal as a story that you live!

Consequences: Numbers alone will put them to sleep! An audience wants the speaker to live the presentation! A good story helps them capture and experience your vision of what the opportunity will create.

5 – Fail to verify the accuracy and consistency of the information presented.

Consequences: If you tell them on page one that the project costs $1 million, and then on page 10, the figure jumps to $5 million, you have just destroyed any trust the decision makers have in you! So, a third party should proofread your material, as we become blind to our typos and other errors.

6 – When developing handouts, keep them vague so that unless the person has attended your presentation, they will be unable to reach a conclusion as to the project’s desirability.

Remedy: Be sure that even without attending the presentation, your ideas can be followed using the written material alone.

7 – When there are multiple options, fail to tell your audience the ones that you prefer.

Consequences: They will question your ability to make decisions! Always remember that when you step into the role of advocating a business case, your credibility is on the line.

8 – Be unprepared for either a Yes or a No.

Consequences: If they say “yes,” are you ready – and can you describe the next step? If you are not prepared for “what‘s next” the proposal may be approved but doesn’t get off the ground.

If they say no, then at some convenient time, approach a decision maker and ask for their feedback. Be polite! Make it clear that you care about the organization.

Possibly they do not trust the numbers or your plans for implementation were not well presented. They may love the idea but can’t say yes because they don’t have confidence in the implementation. If you do not have a well-thought out plan, then you come across as a dreamer, not a doer.

9 – Fail to anticipate questions.

Consequences: This undermines confidence in your ability to run the project or implement the solution. You lose face. It can put your job at risk.

10 – Fib! Make stuff up!

Consequences: You have destroyed your credibility. Once senior managers determine that you lie, you will never receive significant responsibility. You can’t be trusted.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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“I stumbled across evidence that my husband, ‘Chris’ is again stealing from his employer.

“He works at a golf course and pockets cash from golfers. He doesn’t record their tee times so there isn’t a record of them playing or names on a tee sheet. He stole $14,000 last golf season and so far he’s taken over $2,000 this season. The owner — who is a longtime, close friend — is unaware.

“He keeps the stolen cash in empty golf ball boxes in a drawer in his Man Cave – a spare bedroom – which I recently discovered. Amazingly, he records what he takes each day in a calendar notebook, taking anywhere from $25 to $175 every day depending on how busy the golf course is that day. He’s a gambler and has been kicked out of most of the casinos in our area.

“I love golf and could play anytime but I’m so disgusted and disturbed by what Chris is doing that I can’t bring myself to go there.

“I’m full of resentment and terrified that he could take me down with him. What should I do? Thanks, ‘Mona.’”

Photos of Cash and A Calendar Showing Dates of Theft

Attached to Mona’s email were photos of something like $20,000 in clean, new $100 bills, along with pages from a calendar indicating how much money was taken on certain days, with a running total of over $14,000.

“It was spooky looking at evidence of this embezzlement – and in his own handwriting! He did the same thing at a different golf course some years ago, but I thought he had stopped. All of what he stole went to support his gambling habit. I never saw one cent of the money and he did not purchase anything for our home, pay bills, nothing!”

Many Issues Involved Here

I ran Mona’s question by a retired police detective, a private investigator, and a CPA with the national accounting firm CBIZ, each one beginning their evaluation with these questions: “When did she first know or have reason to know of his thefts? Does she want to remain married to this thief?”

Advice from a Private Investigator

California-licensed private investigator Riley Parker observes that, “Spouses discovering embezzlement usually happens one of two ways: (1) The thief uses the stolen money to buy things for themselves or the family, so it is obvious, or (2) it is discovered accidentally as might have happened here.

“This is important if law enforcement becomes involved, for if she in any way participated or knowingly benefitted, she’s dirty and subject to prosecution.

“Given his stealing in the past, I see her at risk and therefore should retain a criminal defense attorney in addition to at the very least, a consultation with a divorce lawyer. At some point in time, the IRS might need to be contacted, in an attempt to establish herself as an innocent spouse but I would only do this through counsel.”

Law Enforcement’s Opinion

“Tony Mosley, a 25-year veteran of the Bakersfield Police Department, recently retired as a detective, provided these recommendations:

“Her specific course of action will depend on whether he knows she has discovered the theft and is willing to admit it and her ability to distance herself from what he has done.

“She should immediately get the money and related evidence out of the house and put it in some safe place until it can be returned to the employer which should be done with the help of a criminal defense attorney.

“From my experience, it is very doubtful that law enforcement would be interested in getting involved if the funds were returned, as she is trying to make things right. But she certainly will have sealed her husband’s fate as an employee.”

The Innocent Spouse Relief with the IRS

“If your readers have filed a joint tax return, she could be liable for a potentially large tax bill she and Chris face from his theft,” observes Southern-California based CPA, Greg Braun, with the national accounting firm of CBIZ.

“By not declaring the stolen money as income, tax and penalties would be owed. However, Mona can file for relief under the innocent spouse rule. IRS Publication 971 tells us that:

“If her application is granted, she will not be liable for tax or the penalties that stem from her husband’s failure to declare the income from these stolen funds. She must meet the following conditions to qualify for innocent spouse relief.

1. They filed a joint return.

2. There is an understated tax on the return that is due to erroneous items of her spouse.

3. When she signed the joint return she did not know, and had no reason to know, that the understated tax existed.

4. Taking into account all the facts and circumstances, it would be unfair to hold her liable for the understated tax.

Additional Recommendations

I asked Mona if Chris had ever been violent with her? “No, not physically, but verbally, especially when discussing his gambling addiction which he denies,” she replied.

“Then unless he gets into Gamblers Anonymous, you know what that means for your marriage, right?” She agreed and promised to keep me in the loop.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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As my town is located 100 miles north of Los Angeles, it is an ideal stopover for people driving to destinations north or south on Highway 99 or Interstate 5 and has afforded me the chance to meet readers, who are always welcome to drop by our office for coffee.

For the past several years, two couples have made this a yearly event. “Sam” and “Jake” are retired psychiatrists, in their late 80s and have been married for more than 20 years to lovely women they met on a golf driving range and who are 25 years younger than they are. Sam, who is married to “Julie,” has admitted to me privately that he “didn’t want a third marriage.”

Over these yearly visits, I’ve learned they are well-off and reside in 4,000-square-foot homes. They have no debt and have assets and rental income that make paying for utilities no problem. However, fear has begun to haunt Sam.

‘My wife wants us to get solar panels’

Before this year’s visit, Sam phoned to say, “My wife is pressuring me to get a solar panel system installed because several of our friends in the area are putting these systems in, using a one-person company recommended by their wives’ massage therapist. But the expense and time for a payback can’t be justified at our age and limited life expectancy, and I would like you to discuss this with all four of us when we come down.”

As planned, we discussed buying or leasing a solar system, the fact that they would need to install a new roof ($15,000), neither had family at all interested in inheriting a house with solar panels, and selling a home with solar panels is no walk in the park.

Sam’s and Jake’s age weighed heavily against them living long enough to see a return on investment of the at least $40,000 that installing solar panels would cost them. A solar system plus battery backup adequate for the size of their homes would take a minimum of 15 years to achieve a payback. As they had no financial issue with paying for energy, getting solar at their age wouldn’t make sense. Plus, they could not assume their children or an eventual buyer of the home would even want their solar system or any system.

I printed out several articles — with pros and cons — that I urged them to all read before the sales presentation that had been arranged by the massage therapist for the following week. When they left our office, it was clear that everyone agreed they just didn’t need solar.

Then came the high-pressure sales presentation

Both men phoned the day after the high-pressure, you’ve-got-to-sign-today-to-get-these-prices sales presentation, which was attended by the massage therapist.

“Would you believe it?” Jake said. “Sam’s wife wanted to sign for a $70,000 system, with battery backup, right then, but he put his foot down.”

Sam was almost in tears, his voice trembling, and he kept repeating, “I can’t go through another divorce at my age.”

Later that day, Jake called back: “I am worried about Sam. Julie is trying to please the massage therapist.”

Within hours, Sam called back, too, and said, “Well, I’ve got to keep Julie happy, so we will probably buy something from the guy.”

What this really looks like

I ran this situation by California private investigator Riley Parker to ask him what could be done to protect Sam from what looks like elder financial abuse.

He replied, “Dennis, cops and private investigators tend to become cynical, as we see so many of these situations. While there are, of course, wonderful marriages with large age differences, what you are describing here just feels like a wife who could be seeking, and finding, a different kind of attention than her husband can provide. It is obvious there is no way to justify solar at their ages. Someone had better protect Sam’s assets, as Julie may already have begun taking advantage of him. Possibly, his son or daughter could be appointed to take charge of his affairs. Also, Sam obviously knew this solar scheme didn’t feel right, and most people would stop there, but he caved in. That is serious. Sam’s best defense is common sense and gut feeling.”

I asked Parker whether it would help to know more about the massage therapist, by doing a background or licensing check.

Parker said, “California is one state where there is no license requirement to be a massage therapist, but even if he were licensed, he should not be the focus. Sam needs to have an accountant go through his assets to see what, if anything, is missing. If he can trust his adult children, then he needs to open up to them. We do not know what his wife has done. Is she waiting for him to die? That is a serious question, especially if there are unexplained withdrawals from his bank accounts. A divorce could be the least of his worries, even at his age.”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post If It Looks Like Elder Financial Abuse, It May Be Just That appeared first on Dennis Beaver.

If Southern California-based family nurse practitioner Joe Torres had read Fool me Once, by Kelly Richmond Pope, he and I would never have spoken. He also would not have lost thousands of dollars in an “overpayment” scam that began when he was with a patient and his laptop screen froze.

I’ll come back to Joe’s all-too-common story in a moment, but I would like to offer this suggestion if you are thinking about a gift for a high school or university graduate — really anyone who wants to learn how to protect their money.

Let that gift be one of the most useful books they could ever own. Fool me Once provides keys to avoid being taken by the con artists and thieves who roam the earth.

With elder financial abuse so prevalent, Fool me Once shows my older readers and their children the signs that mom or dad aren’t okay.

“Said they were from My Bank”

“I was at work,” Joe wrote, “using my laptop, seeing patients, when my screen froze and a message stated that it has a virus and to call a number. I did, and a man said he was with my bank and for $400 he can give me antiviral protection on my computer so I can use it. I sent the $400 using a credit card.

“Immediately, he showed my debit card number, said that I paid too much and he will send $200 back to my bank account. Since I never use the card, I thought he was an employee of my bank as he had the card’s number.

“Somehow $44,200 appeared in my account! He instructed me to wire him the extra money and if I do it right away, he would give me $70 and five years of antiviral protection.

“I was trying to be honest and I wired $43,930 the same day. The next day, I realized this was a scam So, I went to my bank’s closest branch and changed my debit card number.”

Joe Discovers No Safeguard from His Bank

Management at his bank said, “You owe us $44,200!”

“I never received an alert via text, email, or mail, of the movement of the money from my home equity line of credit to my bank account. This was not right, as I but never used it.

If I would have been alerted, I would have immediately canceled or not sent the wire.”

Overpayment scammers pressure the victim to “refund” money “mistakenly” placed in their account, but in reality, it isn’t there.

Merely because an account shows an amount of money deposited does not mean the funds are really there, as it could take days for deposits to actually clear and be fully credited. This is another tool scammers use to convince the victim that an overpayment was made.

Upon receiving Joe’s letter, I contacted an executive in the corporate office of his bank who promised to “escalate” his case.

Despite leaving voicemails for her, asking “Don’t you have some safeguard in place to stop suspicious wires — sending money overseas — from an account that never had activity, and explore the possibility of a scam with your customer?”

I am still waiting for a response.

Joe’s letter concluded, “They need to fix this problem. I want my money back. I should not have to pay for their mistake.”

He gave me permission to use his real name, as “I want people to realize how easily they can be swindled and you can’t trust your bank to prevent this known fraud from taking place.”

Bank executives Silent

Can financial institutions prevent money from being wired? You bet they can. And while it is beyond the scope of this story, they have an important role to prevent money laundering and must be alert to potential fraudulent transactions.

“When a wire transaction is outside of a customer’s profile, it should be stopped and the customer asked to come into the bank, if possible. That would appear to be the case with Joe,” said “Banker X,” from a business bank, in my town who asked that both she and her employer remain anonymous.

“We have prevented similar scams from succeeding, as our systems are designed to look for and alert us to unusual customer transactions,” she pointed out.

Interestingly, I ran these facts by press relations and bank officers at a number of banks across America, asking, “Do you have safeguards that would have stopped Joe’s wire from going through, giving time to investigate activity on an account that had never been used?”

Not one bank officer would comment and most never returned my calls. In law, their silence can be seen as an adoptive admission.

Investment Firms Have Safeguards

However, representatives of major investment houses said “Yes, we have algorithms that are looking for the kind of thing that Joe was doing — suddenly wiring over $40,000 from an account he never used before. Everything comes to a halt, and we talk with our customer to see if is legit, or if they are a scam victim.”

One explained, “These scams succeed due to a sense of trust, wanting to do the right thing, and pressure to act immediately. Had Joe taken a step back and actually gone to his bank before wiring the money, the crooks would have lost.”

So, what are Joe’s remedies? I ran this by several attorneys who sue banks, and all agreed that this is a non-starter. They recommended trying to find a tax deduction of some type.

To protect yourself from bank fraud and other scams, visit the Consumer Financial Protection Bureau (CFPB) and find more tips in the article Banking Scams: Beware Fraudsters Impersonating Your Bank.

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