Counsel this person immediately regarding the excessive use of sick time, and remind her that she was hired to perform a full-time job that requires regular attendance.

At the first sign of an attendance problem, you should explain how absenteeism can have a negative impact on the quality of the employee’s work, the morale of coworkers, and the economic success and continued life of your company. If absenteeism continues, document in a warning letter the dates and times of the absences and the dates you’ve previously counseled this person. Inform the employee that continued abuse might lead to further disciplinary action, up to and including termination. Set specific consequences for future violations.

You need to let the employee know in advance when they’ve utilized all paid sick time to date, and that they’ll be docked for any sick time taken in the future. If the employee has any paid vacation time left, it’s permissible to use that for medical appointments scheduled in advance.

Be aware when you sit down to counsel this troublesome employee, that you might learn they have a disability protecting them under the Americans with Disabilities Act (ADA). If your company employs 15 or more people and your employee is protected under the ADA, you might need to explore reasonable accommodations. Refer to the ADA guidelines on the Department of Labor Web site to learn what questions you may ask, and how to go about discussing reasonable accommodations.

It is generally a good plan to have enough cash on hand to be able to carry your business through one full cycle. A business cycle is typically one year or less — during which the inventory or your customer base is completely turned over. The length of this time, of course, depends on your business, but when raising money, always try to raise enough to carry you through the next major risk window or up to the next level of accomplishment. You’ll also want to tack on a cushion of three months — just in case.

The preferred stock is convertible into common stock at the option of the holder — and may be automatically triggered by certain events. For example, the preferred stock would convert to common stock in the event of an initial public offering (IPO) of the company to simplify the capital structure of the company and to facilitate the IPO.

Venture capital investments are also sometimes “staged.” A certain amount of money is invested right away and additional money is invested later, as certain milestones are reached. From the company’s perspective, it’s important that these milestones are clearly defined and reasonably obtainable.

Venture Capitalists’ Rights
Venture capitalists also typically expect to receive the following rights with an investment:

• The right to elect one or more directors to the company’s board of directors
• The right to receive various reports, financial statements and related information
• The right to have its stock registered for sale in a public offering at the company’s cost
• The right to maintain its percentage share ownership in the company by participating in future stock offerings.

The Stock Purchase Agreement
Once the company and the venture capitalist agree on the terms sheet — a summary of the proposed terms and conditions for the investment — the venture capitalist’s attorneys usually prepare the definitive agreements reflecting the transaction.The main agreement will be the stock purchase agreement, which typically contains the following information:

• The price of stock to be sold and the number of shares to be purchased
• Representations and warranties of the company
• Covenants of the company
• Conditions to closing of the deal
• A requirement to reimburse the venture capitalist’s legal fees
• Exhibits and related agreements, which contain other rights for the venture capitalist

Representations and Warranties
Representations and warranties from the company are almost always present as part of a venture capital investment. The company is expected to represent its financial and operational condition and outlook. A breach of the company’s representations and warranties can lead to a real problem for the company, giving the investor various remedies laid out in the agreement.Representations and warranties can go on for pages, because venture capitalists want to flush out any “warts” in advance.

Some of the most common representations that companies are expected to make include:

• The exact outstanding capitalization of the company
• That the company’s financial statements are true and correct in all basic respects and have been prepared in accordance with generally accepted accounting procedures
• That the company has no liabilities other than those reflected in its most recent balance sheet or occurring in the ordinary course of business since the date of the last balance sheet
• That the company owns all of the assets it claims to own, without liens or encumbrances except those disclosed
• That the company’s intellectual property and products don’t infringe the rights of others
• That the company is in compliance with all relevant laws that govern its operations

In early-stage companies, venture capitalists may insist that the founders make the representations and warranties personally.

Angel investors typically are sophisticated high net worth individuals who like to invest in promising start up businesses. Angel investors will tend to invest at an earlier stage than venture capitalist to get the company going. Angel investors can be good sources for advice and guidance.

Angel investors can be found in a variety of ways. In some communities, there exists a separate angel network (such as the Band of Angels in Silicon Valley. Your accountant, banker or lawyer may also know of some angels.

Angels will expect to see a business plan for your company, and expect to see a business that has some real potential to become profitable and grow. Angels of course expect that they will be able to cash out of their investment at some point.

Loss of eligibility for commercial credit. Bank loans are out of the question if you run afoul of your responsibilities.

Having to pay cash for everything. Paying in cash ties up your working capital and impacts your cash flow. You’ll lose access to the 30-day, 60-day and even 90-day “loans” that trade-credit customers enjoy.

Loss of “early payment” discounts. Many suppliers offer customers significant discounts to encourage payment before the official due date on their bills. If you’re a cash customer because of credit problems, you’re unlikely to get this discount.

To find out where you stand, order a credit report. See what it says about your company’s state of financial affairs. It’s a good idea to do this periodically to make sure the information is correct and current.

If you don’t like what you see, don’t panic. Bad company credit, like problems with personal credit, can be repaired. The best way to start is to talk with your creditors before your problems get out of hand. The goal is to arrange a payment schedule that is reasonable and fair to both sides.

If you find yourself awash in red ink and simply can’t pay your bills, act quickly to rebuild your credit. There are a number of steps to take, with bankruptcy as a last resort. As soon as you realize that you cannot make your payments, contact your creditors at once. If you have paid your bills promptly in the past, creditors may be willing to work with you to set up an alternative payment schedule. Do not wait until your account is referred to a collection agency to take action. You can ask creditors to extend the deadline for payment and to change the payments so that you can afford them. Expect to pay a “carrying charge” or higher interest on overdue accounts. The faster you act, the better terms you’re likely to get. If you can successfully complete a repayment plan, many creditors will continue doing business with your company.

Sometimes, credit problems aren’t due solely to a cash crunch. Mistakes, misunderstandings and structural issues within your company can tangle your credit accounts. If there is a snag, again, first try to deal directly with the creditor. Then look internally for problems that may have contributed to the situation. Late payments are often linked to improper handling of paperwork, incorrect addresses, computer malfunctions or improperly trained employees.

A lot can go wrong on the paperwork front. Are you receiving your bills — are they being sent to the right address and to the right person? Are your checks being received by the right department and the right person? Is it clear when payments are supposed to be made?

Do you have someone in charge of paying bills at your office, or is there a chance that they could slip through the cracks? Establish workable guidelines for handling bills, invoices and payments. And then stick to them. The key to making it back to a good credit rating is to show an ability to meet commitments. Don’t take on more challenges than you can handle, even if it means sacrificing in other areas.

People can do what you ask them to do. One simple way to develop management in a growing organization is to make your highest-potential employees the managers.Don’t be afraid to give them the opportunity to move up. You’ll be surprised at how they respond.

However, transitioning people into management roles can be one of the trickiest parts of running a growing organization. The more support you can offer, the better. Sending them to traditional management training classes can help, although this option can be expensive. You can also buy new managers a selection of management books and look into computer- and Internet-based management-training courses.

Remember, too, that many employees will need to adjust to being responsible for others’ work and results. It’s also not easy for some to cease being “one of the guys.” You should talk to any prospect about those requirements.

Whenever possible, make experienced managers available to help rookies transition into these new roles. And finally, be aware that many employees — often including technical specialists — are more comfortable as individual contributors than they are as managers. Try to give these people a way to grow and prosper without forcing them into management roles they don’t really want.

In addition, make sure to read these articles:

• Real-World Retailing
• The Customer is Always Right
• Return Rates Drop with Customer Reviews
• Cyber Equivalent of Loehmann’s Dressing Room
• News Briefs: January Sales Figures and Rebate Checks
• Stocking Stuffers: How to Increase Sales

When you create a buzz, you essentially build enthusiasm for your company among influencers — people who persuade others. It’s the very definition of public relations. To get people talking, you’ll need to create the sense that you’re leading the pack in terms of a new application or a new opportunity.

Getting newspaper coverage or a mention of your new product or service can go a long way toward creating buzz. Target both the local and national press as well as your industry’s trade publications. Often, the coverage you get in a trade publication — even if it’s just in the gossip column — will create the greatest attention. After all, your competitors and investors read the trade publications.

If your company is not making “news” worthy of report, you can still make press. Most local business newspapers have a personnel page. Whenever you make a new hire, submit that person’s picture with new and past positions and see your company’s name in ink.

Many entrepreneurs also use the Internet to build buzz. As they start their company, they develop an email list to which they circulate information on a periodic basis. By regularly updating this “friends list” with new developments and general progress reports, entrepreneurs create a community of people who care about their business and its success.

If you want these updates to be read, you need to be brief, explicit, and relevant in a larger context than just the business itself. To be newsworthy, you need to relate your business to happenings in the external world.

Consider a public service campaign. This is a great chance to do well by doing good. Sponsor the Special Olympics or participate in the annual Rotary Club Christmas Tree sale in your area.

Speak to students at area schools about your business or donate your services or products for prize drawings, which can also help create interest without breaking your budget.

In addition, make sure to read these articles:

• Choosing a Public Relations Firm
• Developing a Press Kit for Your Small Business
• Selecting a PR Program
• What a PR Firm Can Do for You
• What Organizations Will Handle PR for Small Businesses?
• Tips for Working with a PR Firm