Most business experts agree that noncompete agreements are generally a good way to protect your business. The downside is that noncompete agreements are often difficult to enforce and in some states, may not be enforceable at all. Many state courts have ruled that noncompete agreements are too restrictive on an employee's right to earn a living.

In California, for instance, noncompetes are generally only enforceable in connection with sale of a business and not for employees. In Alabama, noncompetes are generally enforceable in only two contexts: sale of a business and in connection with employment - but even then enforcement requires that there be a valid interest worthy of protection.

Some states require that noncompete be signed at beginning of employment relationship and will only consider enforcement of a noncompete signed after initial employment date if signing of noncompete was accompanied by a promotion, raise in pay, or other event that elevated employee to a more important role within company.

To be enforceable, noncompete agreements must be reasonable on three accounts: Time, geography and scope. Regarding time, you can't restrict someone from competing with you forever, so one to three years is accepted time period for most noncompetes.

As to geography, you can enforce restriction in general area where you conduct business, but you can not enforce restriction beyond those boundaries. And for scope, agreement can restrict certain actions on part of employee, but can't be so generally restrictive that employee won't be able to earn a living working in same industry in a noncompetitive position.

One interesting thing to note: noncompete agreements are not enforceable against certain "professionals," like doctors, CPAs, and lawyers (who do you think writes all those noncompetes).

At this point, Brad, best thing you can do is contact your attorney to see if you have other grounds for suit, then contact your customers and let them know what's going on.

Explain situation regarding former employee, but do so calmly and resist urge to tell them what you really think of this guy. Showing your anger to customer is not going to help you keep their business .

Reaffirm your relationship with client, tell him how much you value his business, remind him of your track record and level of service, then ask one simple question: What can I do to make sure your business stays with me?

Here's to your success!

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.

6. Do you give up easily? One of my favorite sayings about business is: "If it was easy, everybody would do it." Starting a business is hard work and odds for failure are against you in first few years. If you want to ride herd on your own business, you must be willing to fall off your horse a few times without giving up. If you can't dust off your pants and climb back on, here's your zero.

7. Can you handle rejection? If your feelings are easily hurt, keep your day job because business is not for you. Many days in business, rejection waits around every corner and you must be able to handle rejection without letting it beat you down. You will experience rejection from customers, business partners, bankers, and investors, just to name a few.

8. Do you interact well with others? Being a business owner means that you will have daily interaction with a variety of folks, from your own employees to vendors to customers to investors. You must have ability to effectively manage people without offending them; ability to accept good advice from mentors and politely discount bad; ability to overlook mistakes or quietly rectify them; and one I have trouble with: ability to tolerate incompetence without losing your cool (but that's fodder for another column).

9. Do you have financial backing? The number one cause of business failure is a lack of money. Before you start your business you should have enough capital to see you through first year or until business can sustain itself. A good financial plan will include a number that ends in a few commas and a considerable number of zeroes.

10. Do you have experience in type of business you plan to start? We've talked about this before. If you can't locate your car's engine you have no business buying a Lube-N-Go franchise. The most successful business owners have prior experience in industry in which they have set up shop.

BONUS QUESTION. Have you ever started a business before? Prior business ownership is not a prerequisite, but it can't hurt. Many successful entrepreneurs have skeletons of past businesses hidden in their closet. Business is a lot like marriage: you learn a lot of things on first one that may come in handy second time around. You can see why I didn't go into marriage counseling…

Give yourself 10 points for every "Yes" answer and zero points for every "No." If "Yes" answers outweigh "No's," you just might have what it takes to back up your New Years resolution to start your own business.

If your answers lean heavily to "No" side, you might be better off working for someone else.

And that brings about another New Years Resolution that goes something like this: "This year I will get along with my boss…"

Here's to your success.

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.