How to avoid personal liability in operating your small business.

According the U.S. Bureau of Labor Statistics most new small businesses will fail within the first four years. That’s a chilling fact, so it’s important to make sure if it happens to your small business that you don’t have any personal liability for the debts of the corporation, limited liability company, or limited partnership. If you’re a sole proprietorship or general partnership it won’t make any difference as these types of ownership don’t provide any liability protection to the owners. For an interesting story that clearly illustrates the idiocy of operating a business as a general partnership, read my novel, Cash Call, a legal horror story about a failed restaurant franchise.

Although operating as a corporation or limited liability company can protect the owners from personal liability, it’s not automatic. For example, a potential client recently came in complaining that he was being harassed by an old creditor from his bankrupt corporation. After quizzing him for awhile I learned that the creditor involved was the county and the debt was for personal property taxes. Ordinarily a corporate bankruptcy would have taken care of that liability but after examining the records I discovered the tax bill was in my client’s name. This was incorrect but since my client hadn’t got it corrected he had a problem. Even if he had filed a personal bankruptcy he still might not escape the debt since the claim of a governmental entity is a priority debt and not necessarily dischargeable.So, it’s imperative that the small business owner carefully check every bill that comes in and make sure it is in the name of the corporation or LLC and don’t leave off the “Inc.” or “LLC” on the name as that’s what protects you. If those three magic letters are left off there could be an assumption that the business is a DBA (doing business as) of the individual owner or owners.

Another problem is that many creditors insist on the owners guaranteeing their debt. Although the easy thing to do is to cave in and sign the guaranty, it’s a very bad idea. There are usually many vendors to choose from, so it’s usually not hard to find one who won’t insist on a personal guaranty. Banks and landlords are more difficult, but if you shop around and let these creditors know there won’t be any personal guarantees many times these creditors will back off. Remember, creditors will always try to get as much collateral and as many personal guarantees as they can, so stand your ground.

To find out more about what can go wrong in a small business and what to do about it, check out William Manchee’s new non-fiction book, Go Broke, Die Rich, Turning Around the Troubled Small Business. Go Broke, Die Rich and Cash Callare available in paperback, audio MP3, and for audio download at


Opening a Small Business Can Be a Perilous Endeavor

Attorney’s are often accused of being deal killers. They appear to be very negative and overly cautious in their representation of potential investors in a new business, but the fact is they are scared and nervous. They know how perilous any new business venture can be and they know who will be blamed if anything goes wrong. After a particular bad experience in this regard I wrote a novel that graphically illustrates the perils of opening a new business, particularly when it is not set up properly.

When clients come in for help with a new investment or business venture they are usually full of excitement and anticipation. Whereas it would be easy for me to get caught up in their optimism and hope, I can’t do that. As an attorney my job is to make sure they understand the legalities and risks associated with the business venture and then, if they decide to go forward, make sure the venture is set up properly and in the manner most favorable to the client. This is why attorney’s are often accused of being deal killers. They appear to be very negative and overly cautious in their representation, but the fact is they are scared and nervous because they know how perilous any new business venture can be and they know who will be blamed if anything goes wrong.

It’s hard to get clients to understand and appreciate these risks, so I wrote a novel, a horror story actually, where everything goes wrong in a restaurant franchise. It was inspired by actual cases of mine from the past and is not an exaggeration. These things happen in real life and every prospective entrepreneur must realize this.

The Book Reader summarized the story in a review when the book first came out as follows: “The latest in the mystery series starring lawyer Stan Turner. Manchee, a lawyer, pulls out the stops and it’s all go as Turner and his wife Rebekah get involved with friends who are in great trouble with an impending bankruptcy. Turner is involved in a spiral of hounding creditors, arrests, murder, diamonds, gangsters, and a pell-mell pace that holds readers glued to the pages. All sorts of interesting California episodes are here–the Rendevous Club and lap dancing, a Peruvian pottery that is supposed to contain diamonds but doesn’t, the business of lawyering by a lawyer who is always struggling with clients’ payments, the lives of his four growing children, the IRS, interviews with police–and engrossing attorney procedures, in court, in documents, which Manchee knows so well. An old romantic interest complicates matters and creates problems between Turner and his wife. The action moves forward at a brisk pace with surprising (and ingenious) plot twists, and this deeply felt book may be Manchee’s best work to date. The extraordinary and ordinary: “Feeling a little better with one more problem resolved, I went home early and took the family to dinner. It was Thursday, our bowling night…” Manchee writes a very realistic prose, exact, viewing the sharp edges of reality wisely, and he also gives us glimpses beneath the surface, wondering, sympathizing, fearing. There’s a special power and grace here, about family, friends, death, and all the ties that bind one into a non-stop chase to unwrap puzzle with puzzle.

The good news is that everything that happened to Don Blaylock and his family could have been avoided. To find out how check out William Manchee’s new non-fiction book, Go Broke, Die Rich, Turning Around the Troubled Small Business. Cash Call is available in paperback, audio MP3, and for audio download at


 Over the years I have presided over the births and deaths of hundreds of small businesses. As an attorney, I have watched many of them grow, mature, and thrive, but I have seen many more stumble, fall, and die. 

       It is painful to see an entrepreneur, once so full of hope and excitement, suddenly desperate and defeated. I am saddened when I drive down the street and see an empty storefront, as I know someone has suffered an immeasurable loss, and endured extraordinary grief and pain trying to save their piece of the American dream.

       There are few experiences in life as painful and brutal as the failure of a small business. For a small business conceived and nurtured by its owner is like a living, breathing child. Its loss is no less traumatic than losing a loved one. After all, a business owner spends most of his waking hours at work. He will invariably become very attached to it, particularly if it is the business he loves and the one he has always wanted to pursue. 

       Inevitably the business becomes an extension of the owner himself. When it is ailing, he is ailing as well from stress and worry over whatever problems the business is facing. When the business is thriving, he will be happy, confident, and enjoying life to the fullest. If the business fails, the owner will feel like a failure and suffer deep emotional scars that will greatly impact his personal life for years to come.

       With business failure often comes marital strife and divorce. I don’t claim to be a psychologist, but every day I see husbands and wives torn apart because one blames the other for a business failure. Or, if they don’t blame each other, they are often so tired and battered from battling with creditors that they give up on the marriage. The sight of each other only brings back bad memories. So too often the unhappy couple opts for divorce. If the marriage does survive, it will never be the same.

       Having watched my small business clients closely over the years and having operated my own law practice, I have come to some conclusions about why some businesses succeed while others fail. The sad fact is that many of the businesses I have seen fail could have been successful. The good news is that it’s not too late for those still in business, if they will wake up and take control of their destiny.

       In my new book, Go Broke, Die Rich, Turning Around the Troubled Small Business, ISBN 978-1-929976-9-59, I explain these common causes of small business failure, how to identify them, and what can be done to defend the business while it is being turned around. 

       Don’t get me wrong. This book doesn’t contain any magical formula for success. Turning a business around requires hard work, discipline, and sacrifice. But what I hope this book will do is give the reader insight into why so many small businesses fail, and provide solutions and strategies that can help turn around an ailing business.

       This book is intentionally written in a simple, informal style for the average business owner rather than for college graduates or MBAs. I’ve found that the cause of business failure isn’t just a lack of education, experience, or business training, but just as often a lack of common sense. Often small business owners, or “entrepreneurs”s as I call them in the book, do things they know are stupid and reckless. Why? Because entrepreneurs by definition are risk-takers. They like to experiment and do brash things that may only have a slim chance of success. They are the eternal optimist and often have unrealistic expectations.

       Although my major at UCLA back in the late 60s was political science, fortunately, I did minor in economics. The business courses I took were helpful to me when I started in law practice in 1976. More importantly, however, was the training I received at Metropolitan Life Insurance Company. While I was in law school I had to support my wife and four children, so I worked full time selling life insurance. This wasn’t a glamorous job, but I did learn much about financial and business planning—something that had scarcely been mentioned in high school or college. 

       Go Broke, Die Rich is not intended to be a manual or reference book. It is my hope that it will be interesting, entertaining, and informative. I fear too many self-help books get stuck on a shelf and never read cover-to-cover because they are too much like a textbook. This book is about adversity and how to overcome it. Its full of practical advice and ideas on how to deal with just about every adversity an entrepreneur might face. 

        Go Broke, Die Rich is full of real life events that should be of interest to any small business owner. Obviously, the names and locations have been changed and the facts altered enough such that no confidences will be breached. Hopefully, the reader will be able to identify with the characters in these stories and understand the problems they face. The reader will, no doubt, be facing similar problems and can learn from the mistakes made by the business owners in these stories.

       As needed, I will provide legal and business advice but it will not be technical or hard to understand. It is not my intention to burden the reader with the complexities of the law, but simply to give them ideas and alternatives that will provide direction and avenues to take toward solving the problems encountered.

       I consider every business failure a tragedy and, when it is one of my clients who goes down, it is even more troubling. I often lie awake at night wondering if there was something else I could have done to save a client’s business and spare him and his family the dire consequences of a business failure. My only hope is that this book will help other entrepreneurs save their small businesses.

      Visit my websites at and


Welcome! This is my site devoted to helping entrepreneurs figure out what’s wrong with their small businesses, defending them from angry and relentless creditors, and returning them to profitability.  It’s a sad fact, that most new small business won’t last five years.  In many cases the startup small business is doomed from day one because of mistakes that are made early on in the establishment of the new enterprise.

Most of my adult life I have owned one or more small businesses including my own law practice and being a partner in Top Publications, a small publishing company.  In addition I have represented small business owners for over thirty years and helped them through every conceivable problem.

Since I can’t sit down with everyone, I wrote a book on this subject, GO BROKE, DIE RICHIn it I share dozens of stories of the struggles of entrepreneurs just like you. Each story is inspired by actual cases in which I was involved over the last thirty years. From these stories I relate my observations about the causes of small business failures, how they can be avoided, and how the small business can be turned around and made profitable.

For the entrepreneur already in trouble Go Broke, Die Rich provides a comprehensive guide to defending the small business under attack including litigations strategies and the utilization of such tools as debt consolidations, workouts, bankruptcy, and reorganization.

My book and this blog isn’t meant to replace your own attorney or accountant. You shouldn’t rely on anything I say without first consulting your own attorney or accountant. You will need your own professional help from practicioners who you have personnally met, know your particular situation, and practice in your jurisdiction. My book, however, will provide practical guidance in selecting attorneys, accountants, and business consultants to assist you in operating and defending your small business.

Written as a light, entertaining read Go Broke, Die Rich is designed to be read cover to cover. Although packed full of valuable information it is not designed to be a manual but a collection of case studies and observations that should prove valuable to any entrepreneur who reads it.

Feel free to comment or ask questions if you feel like it. If I can help you out, It would be my pleasure.