LEGAL CHIC
Business Wisdom Wednesdays: Calculating Cost of Goods Sold
by Attorney Judith Elaine Hoover on 04/11/12
Business Wisdom Wednesdays: Calculating Cost of Goods Sold
Recently my start-up business clients have been talking to me about how to price their items. Cost of goods, also known as COGS are the first step in making a fair determination of how you should price your items.
What Does COGS (COST OF GOODS SOLD) mean?
COGS, or Cost of Goods Sold, is the actual cost of the item you are selling. The cost is calculated by taking stock of all the supplies and materials used in making your item. Supplies and material include cost of materials, packaging, and shipping.
For example if you make dresses, the supplies and materials that can be calculated in your COGS are buttons, zippers, fabric, thread, the pretty paper you package it in, and the cost of shipping it to your sellers.
How Do I Calculate COGS?
Beginning Inventory + Inventory Purchases – End Inventory = Cost of Goods Sold
Step One: Make an inventory list of all the items you have on hand.
Step Two: Any new items you acquire during the year keep track of.
Step Three: Make an inventory list at the end of the year.
Step Four: Subtract that end of the year list from the inventory you started out with + what you acquired during the year = COGS
For example: $500 (beginning inventory of supplies) + $1000 (new supplies and materials purchased) - $800 (end of the year inventory of supplies) =$700 (the Cost of the Goods that you sold during that year).
COGS ARE BASED ON ASSUMPTIONS
Please be aware that COGS are based on certain assumptions. The calculation assumes that you sold the old inventory first and waited until that was gone to sell your new inventory. The calculation also assumes that the cost of goods did not change throughout the year, so you may have begun with lesser quality cotton and then decided to switch to organic or bamboo cotton when you acquired new supplies that are not necessarily taken into the calculation unless you make allowances for it.
Why Do I Need to Calculate COGS?
-If you do not know what your COGS are, then how can you accurately price the items you are selling online?
-They are tax deductible!
KEYWORDS: COST OF GOODS SOLD, COGS, SELLING ONLINE, PRICING ITEMS
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.v
Monday Civil Litigation 101: Request for Admissions
by Attorney Judith Elaine Hoover on 04/09/12
MONDAY CIVIL LITIGATION 101: DISCOVERY METHODS
REQUEST FOR ADMISSIONS
1. WHAT IS A REQUEST FOR ADMISSIONS?
A requests for admissions acts like a true or false questionnaire. If the request made is true, or admitted, then you or the other side does not need to prove the matter at trial. Any matter that is false, or denied, has to be proven or disproven at trial.
There are two types of request for admissions, those relating to the genuineness of documents and those relating to facts.
2. HOW MANY REQUESTS FOR ADMISSIONS CAN I MAKE?
You are limited to 35 requests that do not relate to the genuineness of documents. The number of requests for admission relating to the genuineness of documents is not limited, except do not use that as an excuse to harass the other side. (California Code Civ. Proc., Section 2033.030)
3. WHAT CAN I REQUEST? ARE THERE LIMITS TO WHAT I CAN ASK ABOUT?
The California Code of Civil Procedure allows a party to a lawsuit to request admissions in order to:
-Admit the genuineness of specified documents, or
-The truth of specified matters of fact, opinion relating to fact, or application of law to fact.
-A request for admission may relate to a matter that is in controversy between the parties.
California Code Civ. Proc., Section 2033.010
4. HOW DO I WRITE A REQUEST FOR ADMISSION?
The California Code of Civil Procedure gives pretty clear guidelines on the form of a request for admission.
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Number each request consecutively
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In the first paragraph immediately below the title of the case, there shall appear the identity of the party requesting the admissions, the set number, and the identity of the responding party.
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Each request for admission in a set shall be separately set forth and identified by letter or number.
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Each request for admission shall be full and complete in and of itself. No preface or instruction shall be included with a set of admission requests unless it has been approved under Chapter 17 (commencing with Section 2033.710).
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Any term specially defined in a request for admission shall be typed with all letters capitalized whenever the term appears.
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No request for admission shall contain subparts, or a compound, conjunctive, or disjunctive request unless it has been approved under Chapter 17 (commencing with Section 2033.710).
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A party requesting an admission of the genuineness of any documents shall attach copies of those documents to the requests, and shall make the original of those documents available for inspection on demand by the party to whom the requests for admission are directed.
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No party shall combine in a single document requests for admission with any other method of discovery.
California Code Civ. Proc., § 2033.060
TIP: Use the code of procedure as a checklist to guide you as you draft the requests for admissions.
5. SAMPLE REQUESTS FOR ADMISSIONS
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Admit that YOU breached the ________(contract, agreement, etc.) between YOU and PLAINTIFF.
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Admit that YOU did not deliver the ______(goods, widgets, etc.) at the time specified in YOUR contract.
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Admit that YOU did not slip and fall in DEFENDANT’s _____________(store, mall, etc.)
TIP: Before you begin drafting your requests for admissions, figure out what you need to prove or disprove for trial and then draft your requests accordingly.
KEYWORDS: CALIFORNIA CIVIL DISCOVERY, REQUESTS FOR ADMISSION, SAMPLE REQUEST FOR ADMISSIONS, CODE OF CIVIL PROCEDURE
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.
Monday Civil Litigation 101: Inspection Demands
by Attorney Judith Elaine Hoover on 02/27/12
MONDAY CIVIL LITIGATION 101: DISCOVERY METHODS
INSPECTION DEMANDS
1. What is an Inspection Demand?
An inspection demand is the broad term used to describe the method of discovery which allows a party to a lawsuit to inspect anything from land to documents. A demand for production of documents is a more narrow term used to describe a request for documents only.
2. How many inspection Demands can I make?
There are no limits to the number of inspection demands you can make, unlike special interrogatories which are limited to 35. However, be cautious that your demands are not so numerous that the other party cannot possibly respond to your request. The limitless number should not be used as a harassment tool.
3. What can I demand? Is there a limit to what I can ask for?
The scope of the inspection demand is set forth in California Code of Civil Procedure Section 2031.010, which states the following:
Any party may obtain discovery….by inspecting, copying, testing, or sampling documents, tangible things, land or other property, and electronically stored information in the possession, custody, or control of any other party to the action. Code Civ. Proc., Section 2031.010
So in a nutshell, you can ask to inspect, copy, test, or sample the following items:
-documents
Documents are defined as a ''writing,'' and a writing can be considered all of the following: handwriting, typewriting, printing, photostating, photographing, photocopying, transmitting by electronic mail or facsimile, electronically stored information, and every other means of recording on any tangible thing, any form of communication or representation including letters, words, pictures, sounds, symbols, and any combination of such forms of communication and any record thereby created.
Thus, documents subject to inspection include any form of tangible expression, such as audio and video recordings, photos, microfilm, drawings, graphs, charts, and computerized information. Code Civ. Proc., Section 1985.8
-tangible things (for example clothing or car parts)
-land or property
-electronically stored information
4. Who can I make a demand on?
You can only make a demand on persons or businesses that are a party to the lawsuit. Basically, they have to be either the plaintiff or defendant. If you want or need documents from a person or business that is not a party to the lawsuit, you have to use a different method.
5. Are there time limits to sending out or responding to Inspection Demands?
If you are the Defendant you do not have to wait before sending out Inspection Demands. If you are the Plaintiff, you have to wait 10 days after service of the complaint or the other side appears in the lawsuit.
Responses are due within 30 days of the service demand. Timing is important. There are consequences for failing to answer so if you are running out of time, call the person that sent them to you and ask for an extension of time to respond.
Key Words: Inspection Demand, Demand for Production of Documents, California Civil Procedure, Discovery, Demand for Documents, Request for Documents, Evidence
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.v
Fashion Law Friday: Fashion Bloggers and the Federal Trade Commission Endorsement Guides
by Attorney Judith Elaine Hoover on 01/26/12
Fashion Law Friday
FASHION BLOGGERS AND THE FEDERAL TRADE COMMISSION ENDORSEMENT GUIDES
The bread and butter of the fashion blogger are the samples sent from various designers and artists attempting to get noticed. Before, writing a glowing blog review, make sure that you are not running afoul of the Federal Trade Commission's (FTC) Endorsement Guides. The rules changed in 2009 and it may seem counterintuitive, but it comes down to this:
IF YOU REGULARLY RECEIVE FREE PRODUCTS AND BLOG ABOUT THEM, YOU PROBABLY SHOULD DISCLOSE TO YOUR READERS THE ONGOING RELATIONSHIP WITH THE COMPANY SENDING YOU THE FREE PRODUCTS!
1. WHY SHOULD A FASHION BLOGGER DISCLOSE THAT IT RECEIVED A FREE PRODUCT WHEN WRITING A BLOG REVIEW?
The Federal Trade Commission's is concerned with truth-in-advertising. It is the FTC’s job to protect consumers. The FTC has Three Basic Truth-in-Advertising principles:
· ''Endorsements must be truthful and not misleading
· ....
· If there is a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.''
In the fashion blogger situation, regularly getting free stuff creates a connection between you and the company sending you free products. Failure to tell your readers about the connection is misleading because disclosure of the connection will affect the confidence your reader's give to your recommendations. So disclosure is a must!
2. WHAT DOES THE FTC CONSIDER AN ENDORSEMENT? WHO IS AN ENDORSER?
WHAT?
Any advertising message that a consumer will believe is the actual experience, opinion, or belief of the person making the message. Such as:
· verbal statements,
· demonstrations, or
· depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization
Testimonials and endorsements are treated the same under the FTC Guides.
WHO?
The person whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.
3. EXAMPLE OF ENDORSEMENT DISCLOSURE
A Fashion Blogger Anne receives a free skirt each month from Company B. Every month Anne writes a glowing blog review about how amazing these skirts are and shows a picture of her wearing the skirts. Likely, Anne’s readers have no idea that she is receiving the skirts for free each month. Anne may genuinely like these skirts and believe they are amazing.
''Well, yeah of course she loves the skirts. She is getting them for free!''
The fact that Anne is receiving these skirts for free would likely factor into how much credence her readers give to her blog reviews. It is misleading not to disclose that the skirts are being sent to Anne for free. Disclosure is a must!
4. FTC ENDORSEMENT GUIDE MYTHS
The FTC is not monitoring bloggers so do not become paranoid. The FTC's focus is advertisers and truth-in-advertising. Each case is reviewed independently based on the facts and circumstances particular to that situation. Advertisers are the focus of FTC investigations.
RESOURCES ON FTC ENDORSEMENT GUIDES:
1. FTC: What People are Asking?
2. Electronic Codes of Federal Regulations, Title 16
Keywords: Federal Trade Commission, Endorsement Guides, Truth-in-Advertising, Fashion Law, Fashion Bloggers
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.
Monday Civil Litigation 101: Special Interrogatories
by Attorney Judith Elaine Hoover on 01/16/12
Monday Civil Litigation 101: Discovery Methods
Special Interrogatories
1. What is a Special Interrogatory?
An interrogatory is a written question. A special interrogatory is a specially prepared written question. Usually an attorney prepares these special written questions, as opposed to the form interrogatories which are prewritten questions on forms made available by the Judicial Council of California. (For further information on form interrogatories click here.) The written questions are prepared by one party to a lawsuit and given to another party.
2. How many special interrogatories, or written questions, can I ask?
You are limited to 35 special interrogatories. You can also only give them to another party while there is an actual lawsuit going. You cannot give them to someone you plan on suing in the future.
3. Do I have to answer or respond to special interrogatories?
Yes! For Two Reasons:
A. COMMON SENSE REASON TO ANSWER SPECIAL INTERROGATORIES :
a. If you want someone to answer your questions, you should answer his/her questions.
B. LEGAL CONSEQUENCES OF NOT ANSWERING SPECIAL INTERROGATORIES:
a. If you do not answer the written questions, the party asking the questions can ask the court to fine you. If you continue to refuse to answer, you may lose your suit or not be able to defend yourself.
4. How do I answer special interrogatories?
You must answer within 30 days from the day the questions were given to you. If you fail to answer on time and the other side does not agree to give you more time, you cannot object to any of the questions.
Tip: If you cannot answer in 30 days, call the person that gave the questions to you and ask for more time. Do not let time run out and then call! Ask in advance!
Here is what California Code of Civil Procedure Section 2030.220 says about answers to interrogatories:
(a) Each answer in a response to interrogatories shall be as complete and straightforward as the information reasonably available to the responding party permits.
In other words, answer the whole question to the best of your ability.
TIP: Although not required, write the number of the question asked and write out the complete question. Write your response below. This helps keep your response organized and makes it easier for the other side to read.
(b) If an interrogatory cannot be answered completely, it shall be answered to the extent possible.
If you only know half of what the person is asking, answer with the half that you do know. Don’t make anything up in an attempt to answer completely.
(c) If the responding party does not have personal knowledge sufficient to respond fully to an interrogatory, that party shall so state, but shall make a reasonable and good faith effort to obtain the information by inquiry to other natural persons or organizations, except where the information is equally available to the propounding party.
If you do not know the answer, write that you do not know the answer to the question. If you know who may have the answer, try to find out the answer from that person. If you cannot reach the person who has the answer, let the party asking the question know who that person is and how they can find them.
Responding to interrogatories can seem stressful and scary. If you cannot afford an attorney to help you prepare your answers, seek out the help of legal aid or a qualified paralegal.
I am happy to help self-represented parties prepare interrogatories and/or responses to interrogatories. Feel free to contact my office for more information!
Keywords: California Civil Procedure, Discovery, Special Interrogatories, Interrogatories.
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.
Monday Civil Litigation 101: California Discovery Methods--Form Interrogatories
by Attorney Judith Elaine Hoover on 08/01/11
Monday Civil Litigation 101: Discovery Methods
Form Interrogatories
1. What is an Interrogatory?
An interrogatory is a question. Interrogatories are a set of questions. Interrogatories are a means to obtain evidence through a series of questions. Think of it like an interview on paper. The California Judicial Council has created a set of form interrogatories, or forms containing questions, that are one of the first steps in the evidence gathering phase of a lawsuit.
2. What are the PROS of using Form Interrogatories?
The forms are free and can be obtained on-line at the Judicial Council website. They are a good way to initiate the evidence gathering phase.
3. What are the CONS of using Form Interrogatories?
There is a myth that form interrogatories are objection proof. They are not. The other party, if they are represented or are really into suing people, will likely have a good grasp of how to evade answering the questions fully or how to object to them on a variety of grounds. Form Interrogatories also don’t allow for follow-up questions, like in a deposition, so you will have to accept whatever answers are given or follow-up with special interrogatories. (More to follow on Special Interrogatories next week!)
4. Where can I find them?
Form Interrogatories-Employment Law
Form Interrogatories-Unlawful Detainer
Form Interrogatories-Limited Civil Case (Economic Litigation)
Case Questionnaire-Limited Civil Cases (Under $25,000)
Related Posts: California Civil Discovery PartI
Keywords: California Civil Litigation; California Law Suits; Law Suits; Discovery; Discovery Methods; Interrogatories; California Judicial Council Form Interrogatories; Form Interrogatories
Disclaimer: The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.
BUSINESS WISDOM WEDNESDAYS: Small Business Resources
by Attorney Judith Elaine Hoover on 07/27/11
SMALL BUSINESS RESOURCES
Business Plan and Local Workshops
There are so many business plan templates and forms available on the internet so there is no need to re-hash the same information. Please find below a list of resources for completing a business plan. The best one I have seen is a guided fill-in template that the Small Business Association provides.
Question: Why do you need a business plan?
Answer: It is the roadmap for the future of your business. It is hard to create a strong foundation for your business, protect your business, and allow for future growth if you don't know where, how, or when you want your business to grow. Also, a clear business plan will help when it is time to ask for money! Take the time to work through your plan. Focus on getting your ideas put down on paper; do not get hung up on the length of your plan. You can refine, add, and subtract to your plan later.
Here are a list of resources:
1. Small Business Association Business Plan Template: Use this very helpful tool! It will walk you through the necessary sections of your small business plan.
2. Inland Empire Business Workshops: For women small business entrepreneurs please review some of the very helpful workshops held by the Inland Empire Women's Business Center. Click here for more information on this helpful, and mostly free, organization.
3. California Economic Development Page: An additional list of resources for small business owners in California.
Keywords: California Small Business, Small Business, Business Plan, Business Plan Template
MONDAYS CIVIL LITIGATION 101: California Civil Discovery Part I
by Attorney Judith Elaine Hoover on 07/24/11
Question: What is Discovery?
Easy Answer:
Discovery is the term used to describe the evidence gathering phase before trial in a lawsuit.
Long Answer:
The California Discovery Act, or the laws that govern discovery in California civil law suits, can be found at Title 4 of the California Code of Civil Procedure. This is a set of statutes that deal with the different methods of discovery, the form they must take, their timing, and other procedural guidelines.
Purpose: The purpose of the Discovery Phase is to:
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Obtain and/or Preserve Evidence;
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Narrow or Eliminate Issues;
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Help you determine the weaknesses in your case or in the other parties case; and
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Aid in potential settlement between the parties.
Methods: Below is a basic list of discovery, or evidence gathering methods.
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Form Interrogatories
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Special Interrogatories
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Demand for Documents
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Request for Admissions
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Depositions
Over the course of the next few weeks, I will provide detailed information on the various discovery methods outlined above. The discovery phase of a civil law suit can be very difficult to navigate without the help of an attorney. Often parties are quick to request discovery, or evidence, from the other party, but have difficulty answering similar requests. I would recommend seeking out the help of counsel, or at the very least a skilled paralegal to aid in the preparation and answering of discovery.
Stay Tuned!
Disclaimer:
The contents on this blog are informational only and not meant, intended, nor should be considered legal advice, advertisement, or solicitation for business. The material posted on this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel.
Furthermore, the information contained on this blog is not specific to any particular set of circumstances. All links to outside information are meant to provide further information on the topic addressed, I make no warranties, express or implied, as to the accuracy of the information contained herein or in the attached links.
FASHIONABLE FRIDAYS: IDPPPA & LEGISLATIVE DISRESPECT
by Attorney Judith Elaine Hoover on 07/22/11
Innovative Design Protection & Piracy Prevention Act
On July 15, 2011 the U.S. House Subcomittee on Intellectual Property, Competition, and the Internet convened a Legislative hearing on the Innovative Design Protection & Piracy Prevention Act (IDPPPA). One particularly notable witness was Lazaro Hernandez of Proenza Schouler.
There has been much discussion in the blogosphere regarding the Act itself and whether it is the legislation the fashion world has been hoping for. IT IS NOT!
This legislation has lost focus. It is supposed to protect innovation. It is not a law intended to counteract the proliferation of counterfeit goods. Counterfeiting is already dealt with under Trademark Law.
This act is not narrow, as claimed by its celebrity proponents, but is vague and will create a backlog of cases that will be filed merely to test its vague standards of "Substantially Identical" or to test what legislators meant by "Independent Creation."
Apart from lack of focus, I feel it necessary to comment on the appalling behavior of the committee. Each one made it a point to qualify their every statement. Each one made it a point to clarify that they are not "fashion people" or that they know nothing about the industry. Not only did they make it a point to say, "I really don't know what you do." There was an underlying tone of not only do I not know, I do not care.
The best example of this behavior came from Ms. Jackson Lee, the representative from Texas. She was late for the hearing. When given the opportunity to address the witnesses, her first comment was that she was in another meeting dealing with the debt crisis and her real concern was job creation. The underlying tone being that the plight of the industry as a whole is inconsequential when compared to the magnitude of "real" problems facing the country.
If the fashion industry collapsed, millions of jobs would be lost. Millions of dollars in GDP would be lost. Before passage of any legislation to "protect" the fashion industry, I suggest the legislators go back to the drawing board and gain a basic working knowledge of the industry and its contributions to this country. I suggest the legislators work to bridge the gap from knowing nothing to learning something. I also strongly suggest that they stop qualifying their every statement and be made to held to account for whatever decisions they make that concern millions of jobs and U.S. dollars.
BUSINESS WISDOM WEDNESDAYS: The Pros and Cons of Choosing an L.L.C.
by Attorney Judith Elaine Hoover on 07/20/11
TOPIC: THE PROS AND CONS OF CHOOSING TO FORM A LIMITED LIABILITY COMPANY
A Limited Liability Company (LLC) is a flexible form of organizing your business. It has two main benefits: partnership tax treatment and corporate limited liability.
1. PROS:
Generally speaking, a limited liability company (LLC) is a great choice for a small start-up business that wants to keep the business's financial and managerial structure simple.
2. CONS: LLC cannot do any of the following:
I personally believe that the LLC PROS vastly outweigh the CONS for a small start up company. Start with a solid business plan and that will help guide your decision making. You should consult with a business attorney before plunging ahead.
Keywords: Limited Liability Company;LLC; Why Choose an LLC?; Corporation; Pass-Through Taxation; Double Taxation; Business Entity; Business Formation
