Tag: mindset

What to do when someone acts unethically in business, but you have no legal recourse

It’s one of the most frustrating situations a business owner can face: someone has clearly wronged you ethically, but legally, you have no recourse. Maybe they misrepresented their business during a sale, broke promises that weren’t in writing, or engaged in deceptive practices that you can’t prove in court. You know what they did was wrong, but your attorney has delivered the hard truth—there’s no legal remedy available.

If you’re in this situation right now, you’re not alone. And more importantly, this setback doesn’t define you or your business future.  Here are some strategies for moving forward after unethical business practices.

A Real Example: The $30,000 Lesson

Recently, we worked with a business owner who discovered that the seller of a business she purchased had used fraudulent tax returns during due diligence. These false documents made the business appear more profitable than it actually was, influencing both her decision to buy and the price she paid.

Was this unethical? Absolutely. The seller deliberately deceived her with falsified financial information.

Did she have legal recourse? Unfortunately, no. The purchase contract contained a broadly written indemnity clause that she had signed without legal review, effectively waiving her right to seek damages for misrepresentations. The cost of this harsh lesson: approximately $30,000.

When Ethics and Law Don’t Align

This situation illustrates a difficult reality in business: not every ethical wrong has a legal remedy. Sometimes people can behave unethically while remaining legally protected. The legal system, while robust, doesn’t provide recourse for every moral failing or business disappointment.

But here’s what’s important to remember—and what we tell every client who faces this situation: You will be okay.

What You’ve Actually Gained (Yes, Really)

When you’ve been on the wrong end of unethical business practices, it’s natural to focus on what you’ve lost. But let’s reframe this experience and recognize what you’ve actually gained:

  1. You’ve Learned What NOT to Do

This experience has given you invaluable knowledge about business practices, contract review, due diligence, and risk assessment. You now know pitfalls that many business owners never encounter until it’s too late. This wisdom will serve you well in every future business decision.

  1. You Know Who You DON’T Want to Do Business With

You’ve identified someone who operates with questionable ethics. This isn’t just about avoiding them in the future—it’s about recognizing the red flags and behavior patterns that signal similar problems with others. Your radar for unethical business practices is now finely tuned.

  1. You’re Now More Cautious and Will Perform Better Due Diligence

Moving forward, you’ll ask harder questions, seek independent verification, and invest in proper professional guidance. This increased caution isn’t paranoia—it’s wisdom gained through experience.

  1. You Have Proven Resilience

You’ve faced a significant business setback and you’re still here, still thinking about your next steps, still moving forward. That resilience is one of your greatest business assets.

The Truth About Early Business Relationships

Many business owners, particularly when starting out, want to believe that everyone operates ethically and conducts business in good faith. This optimistic view of business relationships is actually one of your strengths—it allows you to build trust, form partnerships, and see opportunities that more cynical people might miss.

The fact that someone took advantage of your good faith approach doesn’t mean you should abandon it entirely. Trusting people and operating in good faith isn’t naivete that needs to be eliminated—it’s actually a business strength that just needs to be balanced with proper verification. It’s much healthier to maintain your integrity and optimism while adding protective measures than to become cynical about all business relationships.

Here’s the real danger: allowing bitterness to take root. We’ve seen business owners get so consumed by past wrongs that they make reactive decisions rather than strategic ones. They either become paralyzed by over-caution or lose confidence in their judgment entirely. The goal is to channel this experience into wisdom rather than letting it fester into something that undermines your future success.

This Is About Them, Not You

Here’s something crucial to understand: You didn’t fail. You made a decision based on the information you had, and the other party was not honest in their business practices.

The problem isn’t your judgment, your business acumen, or your worth as an entrepreneur. The problem is that you encountered someone who operates without integrity. Their ethical failures are not a reflection of your business capabilities.

Moving Forward: Your Action Plan

Accept the situation. You can’t change what happened, but you can control how you respond to it.

Document everything. Even if you can’t sue, maintain detailed records of what occurred. This information might be valuable in unexpected ways down the line.

Share your experience appropriately. Consider leaving honest reviews, sharing your experience with relevant business networks, or warning others who might be considering similar transactions.

Invest in professional guidance. Whether it’s legal counsel, accountants, or business advisors, build a team of professionals who can help you navigate future decisions.

Focus on your next opportunity. Channel the energy you might spend on anger or regret into identifying and pursuing your next business move.

Trust your instincts. If something feels off in a business relationship, pay attention to that feeling. Your experience has sharpened your intuition.

You’re Stronger Than You Think

Facing unethical business practices and surviving without legal recourse is actually proof of your strength and resilience as a business owner. You’ve weathered a significant challenge, learned valuable lessons, and you’re still standing.

The business world needs people with integrity—people like you who operate ethically and expect the same from others. Don’t let one person’s poor character change who you are or how you approach business relationships.

The Bottom Line

Yes, you’ve been wronged. Yes, it’s frustrating that there’s no legal remedy. But you are not defeated, and this experience will ultimately make you a savvier, more successful business owner.

Every successful entrepreneur has stories of setbacks, bad partnerships, and expensive lessons learned. What separates those who succeed from those who don’t isn’t the absence of these experiences—it’s how they respond to them.

You will be okay. In fact, you’re going to be better than okay.

If you’re dealing with a situation where you believe you’ve been wronged in a business relationship, consult with qualified legal counsel to understand your options. Every situation is unique, and professional guidance can help you determine the best path forward.

What nobody wants to talk about – but every business owner needs to understand.

 

The Scenario That Makes Your Blood Boil

Picture this: You’re facing a potential lawsuit. You have the evidence. You have the law on your side. You would likely win in court. Then the other side’s lawyer calls with an offer that makes you want to throw your phone across the room:

“We’ll settle for $20,000. It’s going to cost your client a lot more than that to defend this anyway.”

GRRRRR. Frustrating? Absolutely. But also… probably true.

Here’s what I want you to understand: This moment isn’t about being taken advantage of. It’s about you exercising control over your business.

 

Reframing the “Loss” as a Win

Let’s get one thing crystal clear: You always get to decide how this goes.

If you want to go to trial, it’s your right and your lawyer should absolutely follow your wishes. But from one business owner to another, let me share a different way to think about this moment.

Litigation is a business decision. This isn’t about right or wrong. This isn’t about justice or fairness.  Just a business decision.

 

The Real Math Nobody Talks About

When you’re calculating the cost of litigation, most people only think about attorney’s fees. But the real cost includes:

Financial Impact:

  • Legal fees (often 2-3x the settlement amount)
  • Time away from revenue-generating activities
  • Potential expert witness costs
  • Discovery expenses

Hidden Business Costs:

  • Your mental energy focused on litigation instead of growth
  • Stress affecting your decision-making in other areas
  • Team members pulled into depositions and document production
  • The opportunity cost of what you could have accomplished instead

Personal Toll:

  • Sleepless nights thinking about court dates instead of business strategy
  • The emotional drain that affects every other aspect of your life
  • The distraction that keeps you from being fully present for your business

 

The Power of “No Admission of Wrongdoing”

Here’s something crucial: Settlement doesn’t mean you’re admitting fault.

A properly drafted settlement agreement includes language stating there’s no admission of wrongdoing by either party. You’re not saying “you’re right and I was wrong.” You’re saying “this isn’t worth my time and energy.”

Completely different message.

 

Timing Is Everything: The Two Windows

There are actually two opportunities to make this business decision, and the timing matters more than most people realize:

Window #1: Pre-Filing Settlement

  • Clean resolution with no public record
  • Business reputation remains intact
  • Faster resolution
  • Often lower settlement amounts

Window #2: Post-Filing Settlement

  • Court record exists permanently
  • Public access to complaint details
  • Customers, competitors, vendors can all see it
  • Higher costs, more complexity

The key insight: Once that complaint is filed, it’s out there forever. Even if you settle the next day, the court record remains. But handle it at the notice or demand stage? It’s like it never happened.

 

Your Strategic Advantage

You have more control over this process than you think – if you know when to exercise it.

Before filing: You can resolve this quietly, completely, and move on with your business focused on what matters.

After filing: You’re playing defense in a public arena with a permanent record.

The Settlement Agreement: Your Shield Going Forward

A proper settlement agreement doesn’t just end the current dispute – it protects you from this issue coming up again with this person. The right language creates a comprehensive release that prevents the same claims from being raised in the future.

This isn’t just buying peace for today. It’s buying permanent protection.

 

The Real Question

The question isn’t “Should I fight this because I’m right?”

The question is “What’s the smartest business decision that protects my company, my energy, and my future?”

Sometimes the answer is to fight. Sometimes it’s to settle and move on. Both can be the right choice – it depends on your specific situation, your business goals, and what matters most to you.

 

Your Power, Your Choice

Remember: This is your decision to make. Your lawyer can advise you on the legal merits and likely outcomes, but you’re the one who decides what’s best for your business.

If you choose to settle, you’re not giving up or giving in. You’re making a strategic business decision to protect your most valuable resources: your time, your energy, and your focus.

You’re choosing to put your energy where it can actually grow your business instead of where it just protects your ego.

And sometimes, that’s the biggest win of all.

The goal isn’t to always avoid litigation – it’s to approach it strategically, with full understanding of your options and control over your choices.

Don’t wait until you’re in the middle of a heated dispute to figure out what to say and do. I’ve created a step-by-step checklist that walks you through exactly how to handle business disputes professionally—from that first angry phone call through resolution.

The “How to Handle a Business Dispute with Grace” checklist includes:

  • What to document immediately (and what NOT to say)
  • When to involve legal counsel
  • How to recognize when someone is acting in bad faith
  • Strategic communication that resolves issues without admitting liability

Download your free checklist here and keep it handy for when emotions run high and you need a clear plan to follow.

 

Photo Credit: Picpedia.com

I had an incredibly sobering conversation this week. It centered around an analogy that stopped me in my tracks—and I want to share it with you.

Imagine a Waterfall…

Now imagine your business is on a river. Some businesses are way upstream, paddling with confidence. Others are drifting closer to a rapid. And some—maybe more than we realize—are already going over the edge. The waterfall analogy is a clear picture of why we need to protect our businesses, “before the fall.”

Here’s how it breaks down:

Above the Waterfall: Calm Waters and Confidence

Many business owners are floating far upstream. They’re doing well—profitable, stable, and maybe even growing. They believe the dock they built will always hold, and the idea that something could “unmoor” the boat isn’t even on their radar. These owners aren’t looking for support—because it doesn’t feel like they need it.

Drifting: A Sense Something’s Off

Then there are owners who feel the current picking up. They know something’s not right. Maybe sales are slowing. Maybe they’re working longer hours, or cash flow is getting tighter. But instead of asking for help, they paddle harder. They’re thinking positive. They’re surrounded by messaging that tells them success is just around the corner if they hustle harder.

There’s a subtle taboo in the business world about saying:
“Something isn’t working.”

On the Edge: The Point of No Return

Some business owners are at the very crest of the waterfall. Everything feels chaotic. The team is stressed, money is tight, and decisions feel reactive instead of strategic. There may be one last chance to avoid the drop—but gravity is real. And unfortunately, many businesses don’t seek help until it’s too late.

At this point, the panic sets in. Some throw everything out of the boat—employees, marketing, even inventory—hoping to lighten the load. Others resign themselves to the fall, believing it’s too late.

At the Bottom: Soaked, Shaken, and Searching

Then there are the business owners I meet most often: the ones at the bottom of the falls. Soaked, exhausted, unsure what just happened. They’re looking for their oars, trying to figure out how to rebuild. 

And while I love helping them recover—crisis consulting is meaningful, life-changing work—I know in my soul my real mission is preventing the fall.

From Recovery to Prevention: A Shift in My Mission

For the last six years, nearly all of my clients have come from referrals—usually after something went very wrong. I’ve been able to help them stabilize, rebuild, and regain clarity. But I want to shift the conversation.  The truth is, there is a ton of shame that prevent business owners from seeking help. 

I want to reach business owners before the drift begins. Before the warning signs become a waterfall. Before an unexpected emergency or lawsuit takes them out.

Why Prevention Matters: Real-World Risks in Business

Let’s give credit where it’s due—the SBA, SCORE, and other startup resources do great work helping new business owners with plans, funding, and mentorship. But what happens after your business is up and running?

The real work begins. That’s when you need:

  • Key man insurance to protect your business in case something happens to you.

  • A clear understanding that unemployment insurance doesn’t cover owners.

  • Legal and HR systems that protect against liabilities.

  • Financial structure, compliance, and operations planning.

  • Strategic forecasting for capacity and cash flow.

If you’re in a state like California, employment law is one of the fastest ways a business can get thrown over the falls. An unexpected claim, a misclassified contractor, or a wage & hour issue can spiral into litigation, penalties, or worse. 

There are a lot of things in the market that business owners cannot control. Regulatory changes, disruptive products and services, employees leaving, etc.  BUT if we are allowing our ego (and shame) to prevent us from taking action with what we can control, we are potentially setting ourselves up for a trip over the falls. 

My Story: Why I Ring the Bell

If you’ve followed me for any length of time, you know the story of UNEQ, the company we lost in 2013 after my husband’s near-fatal accident. That moment changed everything. We didn’t have the protections in place. No safety net. No key person insurance. It wasn’t just a financial crisis—it was a personal one.

I’m not here to fear monger.

I’m here to tell the truth: We often wait too long to get the skills and support we need to run a business—not just start one.

If you’re drifting—or if you’re still tied to the dock but haven’t looked downriver in a while—now is the time. Not to panic, but to prepare.  If you’d like to chat with me about a legal audit of your business in California, just reach out for a consultation. 

 

*photocredit* Maspnet.com Photographer: Esperanza

In the wake of the pandemic, many businesses had to pivot, and for some, the decision to close their doors can feel like a failure. We’re conditioned to think that shutting down a business is a sign of defeat, but that’s simply not the case. Closing a business can be a power move—one that allows you to cash out of something you’ve built but that no longer serves you or your goals.

I’ve been there myself. As a serial entrepreneur, I’ve voluntarily closed businesses that were no longer in alignment with my family’s needs or my personal vision. It’s a decision many entrepreneurs face, and while it can be difficult, it’s often the smartest choice in today’s fast-changing economy.

Why Closing Can Be the Smartest Move You Make

Today’s economy looks vastly different from even just a few years ago. The pandemic changed how we do business—what we need, how we operate, and how we connect with customers. And while many businesses are thriving post-pandemic, others have struggled to adapt. Smart entrepreneurs know when to walk away and realize that closing is a way to preserve energy, financial resources, and personal well-being. Holding on for the sake of obligation or emotion can quickly lead to financial distress, burnout, and unmanageable stress.

Here are a few instances when closing a business can truly be a power move:

1. The Market Changed, But You Don’t Want To

Back in 2018, I closed my business, At the Ready Publications, LLC, which published “The Online Magazine for First Responders.” Initially, the market for niche online publications for first responders was strong, with a unique position as a free, digital magazine targeting rural areas. But over time, larger competitors entered the space with more robust offerings, bigger subscriber lists, and stronger sponsorships.

In 2019, two of the biggest players in the industry decided to go fully digital, and it became clear that competing for attention in this crowded, high-resource space wasn’t the right move for us.

So, we closed up shop, cashed out, and dissolved the company—without regret. Recognizing that the market had shifted and that we no longer wanted to compete in that arena was an empowering decision.

2. Your Client’s Needs Changed and Your Business Has Run Its Course

When a business is solving a problem, it can thrive for years. But what happens when the problem is solved or when customer needs change? One of my ventures, Dragon Slayer Tutors, supported law students with the unique challenge of preparing for the “Baby Bar” exam in California. My niche was law students, particularly working adults with families, navigating the challenges of law school.

In 2020, however, my alma mater’s accreditation changed, and the state bar removed the requirement for students to pass the Baby Bar. As a result, my business model became obsolete almost overnight. Additionally, many law schools started offering fully accredited online law programs, so the landscape on online legal education changed significantly, and many law programs offered remote tutoring and study opportunities. 

Rather than fighting to keep it alive, I recognized that my services were no longer needed by the market, and I stepped away. Instead of feeling bad about it, I was thrilled that my clients no longer needed this particular service. Letting go was a smart decision, not a failure.

3. The Business No Longer Serves You

As a business owner, you are the master and commander of your company. You decide what your business looks like, who it serves, and how it operates. But what happens when the business no longer aligns with your lifestyle, goals, or passions?

I’ve seen many business owners, including a boutique owner and a restaurateur, close their businesses simply because they weren’t having fun anymore. Maybe they’ve outgrown their original vision, or the financials have changed, making the venture no longer profitable.

In some cases, it’s a desire to regain work-life balance—perhaps taking a step back to focus on family or stability, such as returning to a traditional job for health benefits. This can feel difficult, especially in a culture that promotes relentless hustle. But closing a business to align with your personal goals is a power move.

4. Your Business Evolved Into Something Else

Businesses, like people, are meant to grow and evolve. And sometimes, that means closing down one venture to give way to the next.

In my own business, I’ve evolved from solo law practice to a 2-attorney firm practice, now back to solo practice and have refined my areas of focus over the last ten years. I no longer practice as much administrative law, mostly small business.  While it feels like a significant shift, it’s not a failure—it’s an evolution. 

This is something I see regularly with other entrepreneurs as well. As the markets change, we need to change. Law professionals change areas of practice.  Caterers offering a takeout meal service every week.  A previous career coach becoming an HR Consultant. A jewelry designer adding on a brand management service for other designers. Instead of seeing these evolutions as failures or “closures,” let’s start normalizing them as growth.

Changing the Narrative: Closing Isn’t Failing, It’s Evolving

In today’s economy, where so much is in flux, understanding when to pivot, close, or evolve your business is more important than ever. It’s time to embrace the idea that closing a business doesn’t signify failure—it can be an empowered decision that positions you for the next chapter of success.

So, let’s normalize closing a business as a power move. Rather than seeing these transitions as negative, we should celebrate them as evidence of adaptability and growth. As entrepreneurs, we don’t have to cling to the past; we can create the future.

Why I’m Sharing This Story

This blog post is deeply personal—it was written by my husband, Mike, and shares the events that led to the end of our first business. That chapter of our lives shaped how I approach business law and emergency planning today. I invite you to read it not just as a cautionary tale, but as a reminder of what really matters when you’re building a business.

We Lived the Workaholic Entrepreneur Lifestyle—But Never Will Again
By Mike Kennedy

In April of 2011, Dawn and I decided to risk it all and start UNEQ Consulting. I had spent the previous 14 years working at the Army’s Maneuver Battle Lab as an Experimentation Manager in the Unmanned Systems Team. My team and I conducted experiments with small unmanned aircraft systems (drones) and unmanned ground systems. I loved my job, was good at it, and had earned a great reputation in the unmanned systems community.

But every day I still got up and went to work at a government agency. Bureaucratic BS prevails at all government agencies, and that was the part that troubled me. For months, I had a nagging feeling that I was faced with a choice: succumb to the bureaucracy and stay safe, or resign and do something different.

I chose different. I closed my 401k, sold all my stock options, and we launched UNEQ Consulting. Dawn agreed to keep working with the Army for a while longer.

We considered renting office space but ultimately decided to work from home. We set up downstairs offices and called it the world headquarters of UNEQ Consulting. It was fun in the beginning—I could work in my pajamas and never had to drive to the office. Our first year, we took a loss. But our second year? We made over $200,000.

The problem with working from home is you’re always at work. Soon, when the dogs got me up in the middle of the night, I would start working. From 2 or 3 a.m. until 8 or 9 a.m., I was at my desk. I’d take a short nap, then get right back at it.

But most of that work? Just busy work. I was constantly chasing clients. We had contracts with Georgia Tech Research Institute, DARPA, and several companies developing unmanned tech for the Armed Forces and first responders. We were making great money. But I was working 16–18 hours a day and spending nearly zero quality time with Dawn and the kids still at home.

It got worse when Dawn’s contract ended and she joined the company full-time, running operations. Her contributions were invaluable, but I had become an obsessed workaholic jerk. And obsessed workaholic jerks? They manufacture fights over nothing. That was me. And fight we did.

What’s worse than being that guy? Knowing you are and not caring. I kept telling myself it would all be worth it once we were making millions. Then the arguments wouldn’t matter.

In our third year, we were on track to make $375,000. And then, the best thing that ever happened to me… happened.

On Friday, November 1, 2013, I planned to spend the day with my two oldest sons at our training site prepping for an event with first responders. We stopped at a tire shop for Patrick’s car, and then Kevin and I went on ahead.

A few hours into setup, I climbed a ladder to about 18 feet to hang something on a light post.

I fell.

Eighteen feet. Landed on my head.

And in that one second, UNEQ Consulting died.

So did the obsessed workaholic jerk.

I didn’t die. But I suffered four skull fractures, a severed VIII Cranial Nerve, diffuse brain bleeding, and a catastrophic Traumatic Brain Injury. I spent the next 2.5 months in the hospital learning how to walk again.

In that one second, the business was gone. And I was gone too—the version of me that had taken over. It would take years to realize it, but that fall saved our marriage. We were forced to rebuild everything, starting with my health and our family.

Looking back now, over eleven years later, it’s clear: the accident was a gift.

UNEQ might have made millions. But more likely, Mike and Dawn would have divorced. And the obsessed workaholic jerk I was would be alone.

That, my friends, is not worth it.

What I Hope You Take Away

1. If you’re working 16–18-hour days and not spending quality time with the people you love—you are a workaholic. Stop. It is not worth it.

2. If work is all you think about and you’re missing your life and family—you are an obsessed workaholic. Stop. It is not worth it.

3. If you’re constantly fighting with the people you love over your obsession with work—you are an obsessed workaholic. Stop. It is not worth it.

4. If you don’t care anymore and think it will all be worth it when you “make it”—you are an obsessed workaholic jerk. Stop. It is not worth it.

Running your own business is only worth it if you keep the reason why you started front and center.

You want a better life for your family. You want your business to impact lives. You want to change the world. But what good is all of that if you lose yourself and your family in the process?

Protect What Matters Most

This story is the reason Dawn created her emergency legal resources and this YouTube video on closing a business in an emergency. You don’t have to wait for your world to fall apart to have a plan.

Your business deserves a solid foundation. So do you.