Over the weekend I attended a birthday party for one of my son’s daycare friends. The party was held at one of those inflatable balloon bouncing party places. Because the children had activities to do like climbing a giant inflated slide, jumping and bouncing, I had some time to just observe the behavior of 4 year olds in action.

As soon as the children were released into the play area they began to form up into small groups of two or three to explore. My son stayed very close to one little girl from his daycare together they went from one attraction to another. They were jumping on each inflatable area, exploring it, poking around and generally getting the most out of the party atmosphere. Alone either one might have been too shy to really enjoy themselves. But together they were unstoppable.

What I realize is that at some point very early in our lives as humans we feel the need to connect with others. We feel more confident when working in groups. And we generally are able to explore the space more easily and have more fun when we’re with friends. It reminded me of how each of us as entrepreneurs and small-business owners need to connect with other small business owners and entrepreneurs in order to help us fully explore our spaces.

I think now is such a great time to be an entrepreneur with all of the social media we have at our disposal. We're very lucky to be able to use things like Twitter, Facebook, blogging, and other social media to connect to each other despite the vast distances that separate us.

Here’s another example; in order to find a logo for my start-up bookkeeping company I'm hosting a design contest on 99designs.com. It's is a great website that allows you to hold design competitions for a small hosing fee (my contest). And I have designers from all over the world competing to create a new logo for Aspirin Bookkeeping. 10 or 20 years ago a small start-up would not have this type of resource and so the Internet and other social media platforms have really leveled the playing field.

I'd love to hear how you feel about the use of social media and the Internet as business tools. So tell me what you think in the comment space below.

Sincerely, Drew Smith

How safe is your customer’s data? As business owners we collect all sorts of customer data from phone numbers and name and address to social security numbers. However, by not having the appropriate amount of control over that data you could be leaving your business vulnerable to litigation.

More than one quarter of data breaches so far this year involved consumer records that were jeopardized when organizations lost control over sensitive paper documents. Experts say those incidents came to light in large part due to a proliferation of state data breach notification laws, yet current federal proposals to preempt those state measures would allow paper-based breaches to go unreported.

According to the Identity Theft Resource Center, a San Diego based nonprofit, at least 27 percent of the data breaches disclosed publicly in 2009 stemmed from collections of sensitive consumer information printed on paper that were lost, stolen or improperly disposed of.

Source: http://voices.washingtonpost.com/securityfix/2009/12/paper_data_breaches.html?hpid=sec-tech

Here are my top five ways to secure your customer's personal data and reassure your customers that their info is safe.

1. If you don’t need it don’t collect it. Businesses, all too often collect more information than they really need. The more information you collect the greater risk exposure for your business. Only collect customer information when you have a true business need.

2. Catalog it. Know what information your company collects and where it is stored. You must know what information you have collected from customers in case you have a data breach by a hacker, employee, etc.

3. Lock it up. Securing your customers data is particularly important. Hard copy files should be locked away in a file cabinet or better yet a separate room with controlled access. Similarly electronic files should be stored on secured servers and computers. If you receive customer data via a fax machine ensure that the printouts are not left in an area were unauthorized employees can have access to them.

4. Have a response plan. Even with the best data security procedures you might still lose control of your customer’s personal data. This might happen for reasons that are totally out of your control such as employee collations and theft. That’s why it’s important to have a plan of action that includes notifying your customer of that you lost their personal data and what steps your company is going to take to correct the problem. These steps can include offering free credit monitoring to customers that were affected.

5. Full disclosure. Tell your customers how their information will be used and how you will secure it. Being honest with your customers will help build trust and them the option to not participate with your information request.

I would love to hear your thoughts on securing customer's data. How have you handled this situation and what advice would you give to other business owners who collect customer’s personal information?

The power of forgiveness. Forgive your trespassers. Forgive your spouse. Forgive your children. Forgive the jerk on the Pkwy that cut you off. We've all heard of these things. But what happens when someone forgives your debt? What are the laws that affect debt forgiveness? What are the tax implications of debt forgiveness?

Okay so let's talk about three different debt forgiveness scenarios.

1. Credit card debt forgiveness - let's say things are going fine and you are cruising along and you have a little bit of credit card debt about $1600 and all of a sudden you lose your job. So you're thinking the smart thing to do might be to call my credit card company and ask them to forgive some of my credit card debt. And the nice fellows that they are they agree and forgive $600 of credit card debt. Well two weeks later you get a notice from the card company in the mail. It's an IRS form 1099-C "cancellation of debt ". Believe it or not the Internal Revenue Code considers that cancellation of credit card debt greater than $600 to be income. And so you'd have to pay taxes on it. Now that is irony.
   
2. Loan modification or short sale- let's say you live in Arizona and the real estate market has dropped and your home value has dropped significantly. So you decide to ask for a loan modification in which the lender forgives a portion of your debt on the mortgage. Well, be careful that you understand all the tax ramifications of this type of situation. In some situations that forgiveness of debt can be considered as income and you could be taxed on it. However if that forgiven debt is for your primary residence and it is only acquisition debt. You will escape the grips of the tax man. If that doesn't work try using the picture above.
   
3. Offspring contribution debt forgiveness- let's say it's Friday morning and you're rushing out of the house. You really want cup of coffee but you don't have time to make some. So you have to stop at the store and buy some but you realize you don't have any cash. Just then your 3 1/2-year-old son looks up at you with the cutest Bambi eyes and says "here Dad you can have my dollar but you have give me a puppy". Well in this situation there is actually no tax implication but you'd better give that little boy something, because that's a sign that he truly loves you. Okay so I threw that last one in there just to see if you were still paying attention.
   

   
   

   I think there's just something unfair about these situations. So use the comment box below and tell me how you feel about this issue.
   

   
   

Postscript: Don't forget to ask the puppy to dance.

I just read a really interesting article in the November 2009 edition of Entrepreneur Magazine. It's about Kim Jordan who is the CEO of New Belgium Brewing Company and the company is about to rake in 100 million in revenue this year. According to the article Kim Jordan started her brewing business 18 years ago she makes one of my favorite things which is beer. I don't actually make beer but I do enjoy drinking it. On occasion that is. But I really enjoyed the article because it talks about how even though she's the CEO of this multi-million dollar company she still rides to work on her bike.


I really like this company because they focus on sustainable business practices that are good for the environment. I always enjoy when companies are environmentally responsible. And her company has a 92% employee retention rate. I'm wondering if it's because of all of the nice perks like lots of free beer, employees get two six-packs a week plus a daily shift beer. What a job!

Here's a link to the company website http://www.newbelgium.com/our-story
And of course you must be 21 to enjoy their beer.