My strong preference is to always focus on the positive but it is important to make sure you have things covered in case something negative does happen. For most of us this would be a client not paying, adjusting the scope of what we are delivering (usually increasing it!), or disagreement over the extent of delivery. If you are a creative business it could also be a dispute over copyright. So the question becomes…how well are you covered if this happens?
Managing these situations comes down to having an agreement that your client signs before delivery commences. This may sound a bit heavy but it doesn’t need to be, and you do need something in place. The way I see it is that both you and your client have a right to know exactly what is going to be delivered and how that will be remunerated plus any specific terms & conditions that are relevant to your particular business.
So do you have an agreement that you get your clients to sign? Are you thinking “well I send them an email and they respond to that so I’m probably covered”? In most cases an email will cover things like what you are delivering and how much it will cost, but invariably it doesn’t cover what happens if they don’t pay, how to change the scope of what is being delivered, who owns the intellectual property, and so on.
If you are worried it will look too heavy I find one great side effect of presenting your clients with an agreement is that it makes you look professional (and I also love dropping the signed agreements into my filing cabinet) so looking heavy has never been an issue for me.
The main challenge with agreements is getting them written. Now the obvious answer to that is to find yourself a good commercial solicitor and ask them to do it for you. I’ve had prices quoted that range from £300-£700 plus VAT to produce standard Terms & Conditions. If you are based in the UK the Federation of Small Businesses provides its members with access to a whole list of standard agreements covering both services & products and lots of variations so you might want to consider joining.
My general stand point is “something is better than nothing” so even if you don’t join the Federation of Small Businesses or employ the services of a solicitor please have a good think about what you need to cover in an agreement with a client and write that up and get both of you to sign it. It goes without saying that you should get some legal advice to be sure you have appropriate protection especially when it comes to the ownership of anything you create, the scope of what you are supplying and the associated payment terms, plus what happens if they don’t pay so I would urge you to find a friendly solicitor and invest in their services to protect your business.
While we are talking about protecting yourself can I just ask if you are giving any form of advice as part of your business, as you should consider professional indemnity insurance if you do. There will be a whole host of specific insurances for numerous business types so please make sure you look into what you need to make sure you can trade knowing you have the appropriate protection.
Getting these fundamental business elements covered now will give you a solid platform upon which to grow your business. I think in pictures so when I think about these type of business protection elements I always see a knight wearing armour to make sure he’s protected from any injuries he might sustain in battle. Make sure you have your business armour in place!