*terms and conditions apply. No actual guarantee implied. Investments can go down as well as up. Applicants must be 18 or over. Some sequences shortened. Delivery mileage included. Goods must be returned in the original packaging within a 28 day period. May cause drowsiness. Do not operate heavy machinery. John’s Cupcakes are licensed and manufactured in the US of Ireland.
See, it’s rarely a good idea to simply cut and paste your Ts and Cs from somebody else’s website, even if it just seems like a boring, “tick box” exercise that needs completing. Just because you’ve never been burned by having bad (or no) legal agreements doesn’t make them a bad idea. And yet so many small businesses feel that this is the only way to protect themselves. As you can see above, it usually has the opposite effect, simply confusing your customer.
Geek moment – there is also a legal principle that says if you ever need to try and rely on a clause in court, any ambiguity will be interpreted against you. So you might just find that you’ve made your life harder by trying to find a shortcut.
And yet this doesn’t mean you should spend the earth and months of your life creating the best legal agreement the world has ever seen.
But working with Enlightened SMEs on a daily basis we often find ourselves having to educate clients as to the rationale for these documents. Many are resistant to spending on legal or “compliance” issues, often because (as above) they’ve never been burned.
“I operate on a handshake”, we hear often. Which is lovely, but if your clients or suppliers don’t, then you may find yourself in a pickle. Also, Coronavirus, people, please; handshakes are so 2019.
Trust us, having simple yet robust, fair, clear terms and conditions, contracts with suppliers, shareholders agreements and similar documents is a good idea. I can think of at least three reasons:
1. It makes the sales process easier and stops your sales team answering the same questions every time;
2. It makes you more attractive to investors, as they can see you take governance seriously; and
3. It might just save you thousands in legal fees or disputes down the line.
It may seem painful to invest a few thousand pounds to get these right upfront but the cost of getting them wrong almost always outweighs the investment.
So often we speak to clients who are having trouble with wastage, returns, unpaid debts or internal disputes who don’t realise that these issues would never have materialised if decent contracts were in place upfront.
Similarly, I’ve lost count of the times I’ve worked with business owners who have been pushed out of their own companies because they failed to have a shareholders agreement and could not then believe that they had no rights or ability to stop the other shareholders “ganging up” to vote them off the Board. Tens of thousands in legal fees later, they end up starting again with no reward for years of hard work.
Work out the value to you of having these in place. If you sell a hundred thousand widgets a day at pennies a pop, and your returns are less than 0.01%, you might be pretty relaxed about your terms and conditions. On the other hand if you sell a more bespoke product (or service) and the cost of getting it wrong runs into the tens of thousands, then surely it’s worth investing a little now to save a headache later on.
You want an analogy – imagine you’re buying a house. The survey is an expense you could do without, as are the legal searches. But do you really want to take the risk that the roof is rotten, the walls have dry rot and the driveway belongs to your neighbour ? Copying the searches from the last house you bought, because that went well and you never had a problem, isn’t going to help.
Same applies with your business.
A shameless plug for Alpaca ?
Well sure, we can help you sort this stuff but it’s just part of what we do. We’re not a law firm so we don’t HAVE to make our money selling you complicated legal solutions. We’d rather work out what protection you really need and tailor it to suit. But speak to your favourite lawyer if you prefer. If money really is too tight to mention (contemporary music reference there, for those paying attention), go online to a site like Legalzoom and have a crack yourself, but make sure they’re done with YOUR business in mind. It’s way better than having nothing and almost certainly more helpful than simply cutting and pasting from another company.
How do we convince clients that the documents are necessary ?
Frankly, often we don’t. We accept that the clients may never really care about them. Instead of getting all precious about our lovely legal agreements, we focus our client’s attention on the dramatic impact we can have on their profit line and simply make it a function of our Growth Programme to quietly take care of the compliance stuff in the background.
Basically we engage them with really exciting sales plans, we open doors to new clients, we return them huge great wedges of cash through R&D management and cost savings, and then use some of that free cash to deliver a compliance regime that makes them a scalable business.
Alpaca: Growing ESMEs since 2015*
*terms and conditions may apply 😊