SMEs start business often enough by just starting. You have a business idea and before you’ve even drafted a plan, the idea is already in practice with your family and friends. But sometimes it’s hard to tell when your business has taken off until you see a return for your money. You seldom see money coming into your own bank account within the first year of business – all payments go back into the business and you’re living off your savings. That’s normal, it happens to nearly everyone. You spend your money investing in your business – a lot of money is invested and sometimes wasted in advertising. The one thing you do need to invest in right from the start is a contract with your customers or clients. It is easy to deal with your family and friends to begin with, just going by gut feeling, trust and because they’re your easiest, first customers, the ones who support you in life. But even your family and friends need to understand the seriousness of your business, otherwise, they may well subconsciously treat it like a hobby. You really don’t want your family and friends to treat your services like a hobby and you certainly don’t want your first client (outside your family and friends group) to treat you in the same way. It’s really your call. Take your business seriously and everyone else will follow suit.
When you start a business, you need to think about your niche market. Who are your clients? Who needs your services? Understand that ‘niche market’ is a group of people who use a particular service or product, so you need to think very carefully about who they are and where they are. How will you find them? Networking events are great for broadening your business network, social media is basically free advertising and word of mouth is your richest source of clients? Yes, referrals will quite likely be your strongest source of business. If you are trading in a specific area and clients or customers come to you, you still have your suppliers to think about and what is the best way to do business with them. Of course if you’re a bar or cafe, you don’t hand over your terms of service or contract to a customer who’s just gone into your establishment for a drink, but your suppliers are your business traders. Whether you are the client or the supplier of business, you need something in writing to legally bind your terms and conditions.
Did you know that you can create a fully customised contract with the help of your solicitor? A solicitor doesn’t have to draft a contract or terms of service without their client’s input. In fact a solicitor needs the client’s input, but how much is entirely up to the client. You can have an initial discussion with your solicitor, and at DG Law initial consultations are free of charge, then you can decide what you want the contract to stipulate. Your solicitor will advise you if they see you’ve overlooked important aspects of your business; they may even bring to light something that you’ve not given much importance to, such as payment terms. It is vital that your contracts or terms of services have payment terms in order to avoid pitfalls. Even your friends and family need to understand that they have to pay for your services/products within a specific time. Oh, and do avoid bartering at all costs because someone, and often enough that someone will be you, will get burnt.
So, have you started your business yet? Are you about to start? Contact one of our solicitors for a no commitment free initial consultation and discuss how you would like to draft your contract or terms of service. If you don’t know where to begin, give us a call anyway, we’ll help you out. By Sandra Garcao
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