Showing posts with label small businesses. Show all posts
Showing posts with label small businesses. Show all posts

Business resource - Business Plans

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The Small Business Administration has courses on starting a business and business plans here.

Small Business Lending Corporation has a page on Developing a Business Plan.
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Business resources - Competitive Intelligence

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Check out Competitive Intelligence - A Selective Resource Guide on LLRX. com. Geared for the legal profession but also having uses for the layperson. I spend so much time online that I forget that not everyone knows even what is Google. If you want to learn a bit about online searching, then you need to check out this page.
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Why a business needs a lawyer

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Does your business rely on any of these things:

1. Your ability to write good, enforceable contracts?
2. Your ability to understand contracts from those you do business with?
3. Knowing and meeting state and federal regulations affecting your business?

If you answered "YES" to any of these questions, then ask yourself how much money you are losing doing all this by yourself? If your time can better be spent doing something else for the business, then why does your business not have a lawyer?

Okay, that explains half of the question, but a business needs a lawyer for objective advice as much as it does for the preparing of documents. That makes the whole answer as to why a business needs a lawyer.

But how is the business to afford a lawyer and the lawyer to afford providing services? My solution involves getting away from hourly billing and move to varying my costs according to the job and client. Hourly billing remains for the unique document preparation and for some defense litigation. It also means that the client understand that a little cost for prevention saves a lot when faced with litigation. I provide consultations on a monthly fee that slides from $400.00 per month for nothing more than the client being able to call me up with any questions to $1,500.00 per month where there is advice and document drafting. In between lies the variances - some will need less consistent document drafting, others will have simple documents but not very often, and others will complicated documents drafted every so often - and the fees should also vary from slightly higher monthly fee to just adding the contracts on a la carte or a reduction in the hourly fee for complicated document drafting.

With the costs known upfront, businesses get fewer surprises and can budget accordingly. Even litigation can be handled on something besides an hourly rate. Where failing to prevent legal problems - and there are a myriad of those pitfalls for any business - can mean the end of the business, the business owner needs an attorney. Lawyers need to educate their business clients how lawyers can help their businesses. Both lawyers and clients need to talk about what services they need and how to provide them.
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Business resource - Small Business Administration

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Particularly, the Office of Advocacy. This office has e-mail alerts for the small business including alerts about regulations affecting the small business owner. Small business can also access some of the SBA's research on small businesses here. A good example of tax dollars at work. Here is the link to the web page: http://www.sba.gov/advo/
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Starting an in-home business

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LexisOne reprinted Tips For Starting A Home-Based Business from the Associated Press. I suggest reading the entire article but since I am not sure how long the link will persist, here are the high points:
Here are nine other considerations for those operating or considering a home-based business, according to small-business experts:

1. Start with research. Explore business structures on Web sites such as SBA.gov from the Small Business Administration. Seek feedback on your business plan from seasoned volunteers at SCORE, Counselors to America's Small Business.

2. Do a detailed analysis of costs to figure out how much money you'll need. Forecast three scenarios: a best-case, realistic and worst-case financial picture. Karen Belasco, founder and "chief cookie counselor" of Good Fortunes, a personalized cookie business in Canoga Park, Calif., said she wishes she had spent more time learning about cash flow and the bottom line when she started the company in 1995. "I really lost money for a very long time and we couldn't figure out why," Belasco said. "There were certain hidden costs we just weren't seeing." Still, Good Fortunes has grown to do just under $5 million in annual sales. "My drive and determination was what kept me in business," she said. "I could've used some basic tools at the beginning that probably would've gotten me here a lot faster."

3. Overcome distractions and designate a space in the house for business activity. "Carve out a space where you actually go," said Charles Matthews, executive director of the University of Cincinnati's Center for Entrepreneurship in Ohio. The kitchen table doesn't cut it, he said. "Select a location that's exclusively devoted to your business. It doesn't have to be huge but it has to be effective and efficient, especially if you have clients visit your office."

4. Be your first investor and keep funding sources close to home at first. Start with family, friends and home equity before seeking angel investors or venture capital, Monosoff said. "You have to believe in what you're doing with conviction, and you have to invest in yourself with education and time and money before you can expect other people to support what you're doing."

5. Consider entering contests and business-plan competitions that can help fund and guide your business.

6. If you have trouble securing a bank loan, consider applying to the SBA or microlending organizations. Monosoff recommends sites such as MicroenterpriseWorks.org, and CountMeIn.org, which are run by nonprofit organizations that offer loans up to $25,000, plus coaching, she said. "To have that combination of the funding to give you the seed money and the mentoring is just invaluable."

7. Outsource high-level business functions such as accounting if you don't have the background or time to do a competent job. "A lot of accountants and attorneys will give you a consultation for free," Monosoff said. "Be sure to ask that before you go." Ask for and check references before turning over the bookkeeping, Nemeth added.

8. Ask family for support or consider hiring someone to do the domestic work if you feel overwhelmed. Relinquishing tasks such as child care, housecleaning, cooking and grocery shopping can help you carve out time to focus on the business. If you can't afford to pay for help, look for programs offering free activities for kids in your area. Contact your local Chamber of Commerce.

9. Have an exit strategy. Can you sell the business, pieces of it, or license the product if you no longer want or can afford to continue?

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Do you like free?

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Got an interest in The Clean Water Act?

The Environmental Law Institute has its Clean Water Act Jurisdictional Handbook online for a free download.
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Spouse as Partner

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I got to admit that I have an aversion against partnerships. I think most attorneys do not like them. Why? Liability. Law school beats us over the head to avoid liability for our clients as much as possible.

Partnerships ooze with liability issues. From your partner's creditors seizing business assets for his debts to your assets being on the line for business creditors, partnerships just scare lawyers. Maybe a partnership between corporations or limited liability companies or between a corporation and a limited liability company.

With all these problems with partnerships why have one with a spouse? Because partnerships can be implied by actions as well as by a formal agreement. Two spouses start a business and even without a formal agreement, a partnership can be created by their acts. Of course, the husband and wife have probably not even thought of talking to a lawyer about the kind of problems they might be getting themselves into. Why spend good money that could go into the business?

If anything goes wrong with the business, then business creditors can go after all the joint assets. Since most businesses fail, what do you think now of not talking to a lawyer?

What would chatting with an attorney accomplish? I repeat that most attorneys would get the business set up as a corporation or a limited liability company. If the clients were adamantly committed to a partnership, then there would need to be a partnership agreement.

If the clients want to keep the business running as long as possible, they need to consider all of the problems including divorce. I think the equivalent of a prenuptial agreement (or a post-nuptial agreement, if already married) needs to be considered regardless of the business type used by the husband and wife. With a partnership and limited liability company having a written document (and a LLC requiring a written operating agreement) setting out how the business shall be run, incorporating some of the prenuptial/post-nuptial's terms does not seem out of place. Based upon that reasoning, they need a separate prenuptial/post-nuptial agreement if the business is to be set up as a corporation.

Then they need to consider their retirement and estate planning objectives. If the business entity is a partnership or a limited liability company, these objectives need expression in the partnership agreement or the LLC operating agreement and for corporations in a separate document.
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Family Business Negotiations

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The latest Harvard Business School's Working Knowledge newsletter shows a new article entitled Five Steps to Better Family Negotiations. Worth reading by anyone with a family-run business or representing one. The steps are:
  1. Analyze the negotiation space
  2. Don't try to beat the other side
  3. Understand the other party's interests, constraints, and perspective
  4. Avoid single-issue negotiations: identify and negotiate multiple issues simultaneously
  5. Negotiate over interests, not positions
Frankly, these steps ought to have a place in most negotiations.
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Business resources - IRS newsletter for small businesses

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For thos who want to keep with IRS tax information for your business, something I got via the U.S. Department of Labor:

The Office of Compliance Assistance Policy would like to bring to your attention compliance assistance news from the Internal Revenue Service:

The IRS has started a news service, e-News for Small Business. Distributed every Wednesday, it brings timely, useful tax information right to your computer.

e-News’ convenient format will put IRS tax information at your fingertips. “Useful Links” brings you quickly to some of the most useful information on IRS.gov for large and small businesses and the self-employed.

To start your FREE subscription to e-News, just go to IRS.gov at http://www.irs.gov/businesses/small/content/0,,id=154826,00.html, type in your e-mail address and submit.

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Thinking more about restaurants and intellectual property #1

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Does a restaurant need trademarks? Do most businesses need trademarks?

The New York Times' coverage of the Pearl Oyster Bar litigation got me thinking about how its points would apply here. I made some comments within the original post and others have occurred to me since then.

First, I want to be clear that I am not addressing all restaurants. Franchise restaurants have franchisors eager to protect their trademarks and trade secrets. Nor am I addressing those restaurateurs who do want to expend the money to protect their intellectual property. I specifically exclude them on the assumption that they have made the decision that any infringement has not or will not cost them any money. A civil suit requires damages and that will be measured in dollars. No damages means no lawsuit.

I remain convinced that trademarks are the most cost effective intellectual property for any small business. The name must be unique and used in connection with the business. This could include the business' name or items on the menu or both. Trademarking the business' name provides protection against the competitor with the same or a similar name moving into the same area. While bringing menu items under a trademark provides protection from a competitor using your business' success with a menu item for their own purposes. You can see the government's fees for trademarking here.

You have the ultimate decision as to trademark or not. Remember enforcement costs do exist. I suggest thinking of trademarks as a form of insurance. Like all insurance, you need to think about what will be your costs if you do not have the insurance.

4/26/08 update: Follow Up on "Restaurants and intellectual property" about settlement of this case.
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Business and divorce: You do have a prenuptial agreement, right?

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I have gotten to really like The Riches on FX. Minnie Driver(who has become beautiful as she ages) and Eddie Izzard (who has become a rather good actor) play con artists taking over a dead man's life - the dead man being a lawyer. The lawyer works in a real estate development company. Actually, he is now a partner to the rather coarse owner of the company. Owner disappeared and returned last night with a bride - a dancer from Las Vegas. No, the show is not for the faint hearted. Owner wanted a prenup from the wife. What ensued was a rather interesting discussion of prenups, their purposes, and marriage.

When remarrying, small business owners need to think hard about prenuptial agreements. Divorce means dividing half the property and a business is property. The Los Angeles Times has an article, Parting Company, in its May 22 edition.
Prenuptial agreements, experts agree, are the best way to prevent a small business from becoming part of a messy divorce. Properly crafted, they will protect a company from being split up or loaded with debt used to buy out the other spouse. This is especially true in California, where community property laws dictate that everything acquired during a marriage belongs to both spouses no matter who did the work.

"A prenuptial agreement is one of the best things people can do for themselves," said Ben Martin, an attorney who advises entrepreneurs at the Small Business Development Center at Loyola Marymount University, which offers free counseling.

The article mentions post- marriage agreements. These are as difficult here in Indiana as they appear to be in California but not impossible.

Reaching the decision to make this kind of agreement is the truly difficult part about these type of agreements. The personal, emotional issues have the real possibility of leading the business to ruin.

Like so many things legal, prenuptial agreements possess a double edge. The agreement protects both parties. The bride in The Riches came around to the idea of a prenuptial agreement when it was pointed out to her that the agreement was a negotiation and all of marriage was a negotiation. I really like description of prenups and marriage. I have written more about prenuptial agreements on my Indiana Divorce and Family Law Blog here.

So, you own a business and no agreement in case of divorce? Why not?
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Helping your business with Internet resources

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How can the Internet help your business? Information exists freely online that once was too expensive in time or money or both for practical use. This information may provide the competitive edge for your business or the means of avoiding dangerous costs - if you know about the information. The problem is now fighting information overload.

You can now find here links to those business resources I find useful. These post wills now be an ongoing weekly feature for this blog, so check back often or subscribe to the RSS feed or to the e-mail updates. I suggest that you help by using the Comment function at the bottom of the posts to let me know if you find this information useful or not, and also for any recommendations or requests about business resources.

So why am I passing along this information for free? Am I being a spendthrift with my knowledge? Is the information really worth something?

I freely admit my self-interest here. First, giving you this information educates you on the subject and about my knowledge of the information. Second, you knowing what you need to do does mean you know how to do this for your specific business needs. Putting those together will hopefully illuminate for you why you need to hire me as your lawyer and as your lawyer I will not need to waste your time educating you about whatever needs to be done. Lastly, some resources may lead you to a profitable market area. Even if you do not hire me as your lawyer, I have improved the economy around me and that will benefit all of us eventually.

Dumb Little Man blog from Inter Alia. Dumb Little Man is about productivity tips, saving money, and maybe just keeping its readers sane. I like the style, not sure a lot of it I can use, but what I can use is great. I subscribed to the RSS feed.

At Dumb Little Man, I found this post, 13 Government Resources for Small Businesses. These are federal publications and only a fraction of what is out there.

For businesses writing probably does not seem as important as doing whatever it is that the business does, but how much of what a business does involve some sort of written communication? I thought about this when I ran across the Business Writing blog. Bookmark it or subscribe to the RSS feed for future reference.
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Employee or subcontractor?

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A question that never seems to die, sort of like Frankenstein's monster. An employer giving the wrong answer is looking at a variety of problems. I remember reading a few years ago about the IRS scrutinizing small businesses about whether subcontractors were actually subcontractors.

Workplace Prof Blog's post,More on Independent Contractors vs. Employees, makes me think that the problem still exists and may be even bigger than might the conventional wisdom. Workplace Prof Blog has a very succinct description of the problem:
One of the most important threshold issues in any area of employment law is whether a worker should be classified as an independent contractor or an employee. Not only is this classification important for determining whether an employer meets the employee threshold for a statute, but it also indicates whether a worker can bring a lawsuit under these statutes and how a company has to treat a worker regarding such things as employee benefits.

I will point out two ares of law where the classification makes a difference: 1) as alluded to above, tax law; and 2) worker's compensation. From my experience, employers know about those two areas of law and are precisely the reason for miscategorizing workers. Employers cut their costs (employee withholding and workmen compensation premiums) by characterizing employees as subcontractors. This a risky and shortsighted plan.

I suggest any employer who thinks about labelling their employees as subcontractors read the post at Workplace Prof - including his links to other sites.
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Reading Around: Chilling Effects Clearinghouse

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I discovered the Chilling Effects Clearinghouse this past Saturday. I get asked some simple questions about the Internet (such as will someone get in trouble for posting something stupid to a web page.), but I think this site has the credentials to be a starting point for researching Internet issues. The site describes its credentials and its purpose in the first two paragraphs on the site:
A joint project of the Electronic Frontier Foundation and Harvard, Stanford, Berkeley, University of San Francisco, University of Maine, George Washington School of Law, and Santa Clara University School of Law clinics.

Do you know your online rights? Have you received a letter asking you to remove information from a Web site or to stop engaging in an activity? Are you concerned about liability for information that someone else posted to your online forum? If so, this site is for you.
If the traffic to this blog is any indication, Indiana has not the interest in the Internet found in other states. None of my business clients leap for the chance of a web presence. I do not think that will last for many more years. Facebook and Myspace will change that. I know one client's daughter received abuse via Myspace and we were able to deal well before litigation but we got lucky that the abuse approached the criminal. More troublesome will be the non-criminal attacks on businesses or businesses attacking non-criminal criticism that will appear in blogs and online forums. I suggest reading Defamation Lawsuits at Blue MauMau for background to this kind of problem. Then read Chilling Effects Clearinghouse to keep up on what is happening elsewhere.
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Small business news: New York Time/Small Business Page

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I am preparing for a jury trial and have not had much time for posting. I am barely keeping up with what is going on in the outer world. Baseball has started, right? I did notice that the New York Times has now started a section for small business. The headlines pose the possibility of useful information. Without any more preliminaries here is the New York Times' Small Business section.
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Does your company do criminal background checks?

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Then read the Virtual Chase's article, National Criminal Background Checks: Myths, Realities & Resources. Here are the article's conclusions:
1. Proprietary fee-based databases offer geographical breadth at reasonable cost to criminal records research that would be time-consuming and prohibitively expensive using local, on-site research.

2. Online searches and on-site research risk missing information for a variety of reasons, and the industry standard maintains there is no substitute for searching court records at the local level. The diligent researcher will pursue every available avenue to search down to the lowest possible local level in conducting criminal background searches -- and will recognize there still can be no guarantee of 100% certainty.

3. Given the inconsistency of data collection among and between local and state jurisdictions, varying standards for updating data and for insuring its accuracy, the lack of any standard for collecting information on criminal offenses, and increasing restrictions imposed on information in public records by jurisdictions concerned about privacy rights, a nationwide criminal records search remains a goal, not a given.
I had a telephone recently from a woman not initially hired because of an error in a background check. They are not perfect - as one of my larger business clients knows. The whole article deserves reading.
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Good advice on handling government inspectors

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OSHA, health department inspectors, government inspectors of any sort raise all sorts of problems for business owners. Assuming that the business owner has made a good faith effort to comply with the regulator's inspectors, I thought the following two paragraphs from the New York Times good advice for dealing with inspectors:

Restaurateurs and health department officials alike acknowledge that when an inspector calls, tensions run high. “It can be a deadly experience, and what you don’t want to do is let your emotions get away with you,” said Steve Millington, the general manager of Michael’s, the media-crowd hangout a few doors from Brasserie LCB.

“It’s like a cop giving you a speeding ticket,” he said. “You’ll be there until the cows come home. There’s almost a petulance to the inspectors. You really need to shut up and be servile to them.”

The Times headlined the story with Health Inspector Calls and Chef’s Pride Cracks. The article reads as a pretty good case study of what not to do when the inspector calls. Diplomacy has its place in this world.

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Electronic discovery - E-mails, Enron, and Karl Rove

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The office computer crisis delayed my commenting on this Washington Post article,
'Delete' Doesn't Mean 'Disappear'. The writer, Rob Pegoraro, does an excellent job explaining the life of e-mail and the techniques for removing e-mail. I suggest anyone and everyone read the technical bits, but I think this passage ought to put the importance of this into perspective for everyone:

So even if both the sender and recipient strive to make a message disappear, "data forensics" companies can dig it up. Brian Karney, the director of product management for one such firm, Guidance Software of Pasadena, Calif., bragged about how easy it is to unearth a long-buried message from the database file created by Microsoft Outlook -- the software used by many businesses and organizations, including the White House.

"Anybody can recover an e-mail," Karney said. "You just need to know how to look and find that stuff."

Encrypting e-mail -- something most users never bother to do -- can keep the contents of your correspondence secret. But it can't hide other data about the e-mail, such as subject, addresses, dates and times, which can be incriminating on their own.

Just because it's possible to find long-lost e-mails doesn't mean anyone is doing that with yours right now.

Your Internet service provider or Web-mail service, if it wants to stay in business, is not likely to eavesdrop.

And your office's IT department may be too busy to bother. Although a lot of companies say they monitor employee e-mail (55 percent, in a 2005 survey by two trade groups, the American Management Association and the ePolicy Institute), you can bet that most rely on automated software to do the job. It takes an exceptionally paranoid, well-financed business to hire people just to read the mail.

If, however, somebody thinks your correspondence in particular hides a sufficiently sordid secret -- especially if that somebody is a politician or a prosecutor -- all that can change.


I added the italics to that last paragraph. I would have also added business competitor to politician or prosecutor.

If you have a business and do not understand why preparing for electronic discovery is necessary for your business, I think reading this article will give you understanding.
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Relations with business clients - miscellaneous thoughts

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I caught a profile of a Scots construction lawyer in last Sunday's Sunday Herald and I thought how lucky this lawyer was:
Her focus is not just on problem solving but on building long-term relationships with clients. She says this has led her into work on facilities management and PFI projects as her clients diversify into these fields.
Business clients here seem uninterested in anything but a one-off relationship. Yes, we may have a surplus of lawyers here but how many business people give their lawyers time to understand their businesses rather than just their kind of business?

Scotland has the same problems as Indiana - litigation costs money.

When she began to specialise in construction disputes in the late 1980s and early 1990s, the trend was for litigation, some of which dragged on for years, racking up enormous legal bills and involving bitter altercations. Now the trend is to avoid court and to seek resolution of disputes through an adjudication hearing presided over by an industry expert who normally delivers a verdict within eight weeks.

The impact of high-profile cases such as those involving Trafalgar House and Eurotunnel pushed the industry towards disaffection with the process of bringing a case to court, Patterson says. "No-one wins in that process. We're in a much better place today," she adds.

Similar solutions could apply here. For years I tried to get the attention of business clients by emphasizing preventive measures. No interest. Ever. I would be quite willing to credit this to a poor presentation but I know from my stint as in-house counsel that presentation has nothing to do with the lack of response. Businesses here prefer waiting for the axe to fall. I am assuming that times have changed enough to get businesspeople to listen. It may be - or so I hope - that I learned enough to better present the utility of preventive legal measures for businesses. If nothing else, it gives a sharper point to this blog.
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Branding for Businesses

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What's in a name? Yeah, a rose may be a rose but a rose is not competing with the business or shop or restaurant down the street. Businesses rise and fall on their names. That is why we have trademark law. To protect business from illegitimate use of their names. What would be your reaction to drinking from a Coca-Cola bottle and tasting Pepsi?

So, I found a blog today on branding. NameWire, the product naming blog. Lot to learn from the blog and a lot of fun learning it, too. (Like I did not know Prell and Ovaltine were zombie brands. Wasn't there a commercial for Ovaltine on just last week? Geez, maybe I am spending too much time working.) If nothing else, read the post on Brand Naming: Characteristics of a Band Name. Oh so true, if you ever were in a band or hung around bands. More importantly for us nowadays, a very good illustration of why brand names are about money and business.
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