Scary Business Stories: Getting Sued, and Surviving…Halloween Biz Run Down

October 15, 2010 at 5:09 pm Leave a comment

Image originally from http://www.bdh.net/2007/08/03/zombies-a-plenty. altered.

As Halloween approaches, the NFIB Young Entrepreneur Foundation shares a series of “scary” business stories.  The entrepreneurs in this series generously and honestly share their business challenges, and how they recovered. 

Name

 Chris Federspiel

Tell us about your business in which you had a “scary” experience.

PCDVDTeacher was an all-in-one software program on a DVD to teach people beginning with computers on the basics of popular programs. The product worked great, the website looked great, the overall package was great. I was sued.

I found out who my main competitors were and I used one of their company names in my Google ad’s keywords. It was not in the ad itself, rather on the back-end for people to be able to find my ad. When people searched for that company’s keyword, my ad appeared.

About two months after I started advertising in this fashion, my father was served papers at his home where my business was registered. I was in Asia traveling at the time where I was launching my business via the Web. Turns out, I was not breaking the law, rather this type of allegation was in case-law. Our trademark attorney worked out a settlement with the company for me to pay $5,000 and immediately cease using the company’s name for any reason and I could keep my company open. Bankrupting the company would have destroyed my credit as the company was registered as a sole proprietorship under my social security number. We decided to settle because my business was not making much money and I would have incurred litigation costs in a different US state then my own.

That particular iteration of the DVD never sold many copies. My idea was to create a new product specializing in only Microsoft Excel 2010 tutorials, which I created and am currently selling at www.computersbychris.com via DVD or digital download.

What was the biggest challenge you experienced with this business? How did it make you feel?

Losing $12,000, most of which was my savings, the rest of family money, still hurts. I’m still paying the money back. It’s been quite a struggle to come back from it but I’m determined.

How did you recover from / get through the challenge?

Forging ahead. I launched a new iteration of the DVD. I created it for $300. Other than that, all it took was my time to create it, so I gave it a shot. I launched a few weeks ago.  

What are your future plans?

I want to support myself without a full-time 9-5 job, rather work on my own, so I’m launching a t-shirt company in a few weeks selling New Jersey themed t’s at www.jerseyvintage.com with my new business partner, as well as plans for many more businesses. Also, I’m also writing an autobiography on growing up and living with Bipolar 2 to possibly sell as an eBook.

What is your advice to young entrepreneurs based on your experience?

 Try to spend as little money as possible learning if your idea will work. Launch a test.

More about Chris: 

Link to Chris’s current business:  www.computersbychris.com

Favorite business book: The Four Hour Work Week by Timothy Ferriss

Favorite business resource:  My friends and family

Favorite business website: Google – for researching competition

Discussion Questions:

1. Complete Exercise 2-6 in on assessing risk in Module 2 of the Entrepreneur in the Classroom free curriculum. What types of risk make can you tolerate? Lead a discussion on the answers.

2.  Have students research corporate entitites which do and don’t provide financial protection to the owner in the event of a law suit.  Consider slide 16 in Module 3 of EITC’s free entrepreneurship curriculum.

More information

The NFIB Young Entrepreneur Foundation is a 501(c)(3) organization promoting the importance of small business and free enterprise to the nation’s youth. More information is available at www.NFIB.com/YEF.  The Foundation is associated with the National Federation of Independent Business; NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.

Entrepreneur In The Classroom. The NFIB Young Entrepreneur Foundation Entrepreneur-in-the-Classroom (EITC) supplemental curriculum exposes students to entrepreneurship and the necessary steps to take an idea and turn it into a business. The free curriculum can be integrated into classes teaching a variety of subjects including music, art, fashion, business and many more. You must be registered to view the full Entrepreneur-in-the-Classroom curriculum.

Related links:

Follow NFIB Young Entrepreneur Foundation on Twitter

Follow NFIB on Twitter

Follow blog author Kathy Korman Frey on Twitter

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Entry filed under: Business exercises, Challenges, Curriculum. Tags: , .

Young Entrepreneur of the Year: Scholarships and Awards Scary Halloween Business Stories: Surviving Business Challenges in Manufacturing

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