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Confident people request contracts

Confident people request contracts

Confidence is a strange thing, it’s a feeling and an enabler, it allows you to take control for your business, apply assertiveness to tasks and project your views good or bad.
Confident people have confidence in their business and their abilities, and we have found that they are more likely to protect their business than those that concentrate on people pleasing regardless of the risk to their business.  This asset or business you’ve built up requires a certain amount of protection.  Common ways to do this is to seek formality through a contract which outlines the do and don’t and supports the business relationship especially if things go wrong.   Don’t get me wrong a certain amount of people pleasing is important but its sensible to do so post contract rather than reply on the good nature of people you may not really know.  Remember because you act fairly in your dealing doesn’t mean others have the same approach or morality when doing business; not everyone thinks like you?
Understandably, when you are running a business you don’t have the time to think of everything, and the task of organising contracts can be deemed mundane and time consuming. We find that people who have a dispute can be upset, emotional, unsure how to resolve the problem and have lost all their confidence.  Often walking away from an issue when they are owned money because of a lack of appetite to engage in a dispute with no boundaries.  Those at a low point can run into a problem and, the problem often looks bigger. We all have times when we are at a low ebb or not ourselves.  The contract can help to protect the business and maintain the status quo throughout such times, it’s a kind of armour for the business world.

 

The importance of protecting your business can often be forgotten, but by taking the time do to it you are safeguarding your livelihood, express your capabilities helps to build confidence.

 

The psychology of confident people means that they like to have control, and will usually act on this. Just like the people that have encountered a problem, confident people understand that they can’t think of everything. But they also understand that a contract will help them to plan scenarios and cover eventualities in a previously tested format. So in a proactive way, rather than wait for a problem to happen, they control the situation by taking action beforehand.

 

A confident person will seek out the help of an expert to ensure that their business is protected. They will value the output of the contract and understand that it is a remedy for disputes. Its not uncommon for people to believe that they don’t need a contract viewing the document as a barrier rather than parameters set out to protect. Unfortunately anyone can face problems; a contract generates confidence and allows more control in situations that are important. Confident people will happily seek advice and request a contract.

 

Confidence is the key factor when achieving success, and confidence is the trait that will encourage you to have a facility in place to solve problems before they actually happen. Which is why confident people request contracts.

 

 

Customer service and the contract – getting the balance right

Customer service and the contract – getting the balance right

A contract is primarily there to protect your business and your clients. It sets out how each party is expected to act and manages the business liability and risks. But as a business owner do you know exactly what is in your terms and conditions?

Regards dealing with consumers, we know that on average 73% of consumers admit to not reading the small print, but it would be interesting to discover the figure in relation to businesses – our view based on our clients feedback is that small businesses are more likely to read one another’s’ Ts and Cs because of the equality in bargaining power.

Yes it may be a mundane, time consuming task to read through the contract but it is there to protect you and therefore it’s important to know the content.

Every business wants to have happy clients. However, people pleasing can be confusing to customers. Whilst it is important to keep your clients happy, you also need to manage their expectations. Telling a customer what they want to hear every time might seem like a good idea, but in reality all it will do is cause problems.  A contract helps to manage the clients expectations afterall you simply want to deliver the best service to your client.

In the event of a dispute, it might be easier to blame the contract because you don’t know what is in it, but ignorance is no defence. A contract is there to help and support your business, and usually if there is a problem then it will help you to resolve that dispute.

By taking the time to understand what is in your contracts you can help to grow your business and reduce the number of customer disputes. Contracts are there for a practical reason, they add to your professionalism, help manage risk and can promote business sustainability.

1 in 4 websites break the law.

16th Sept 2013

The BBC website reported that Trading Standards in Scotland (SCOTSS) states that one in four websites are not offering consumers the correct options when trading online, ultimately breaching their consumer rights.  Amongst these infringements include 43% of websites fail to inform consumers of their right to cancel and more than 50% of sites, fail to provide a full refund when required.

SCOTSS chairman Colin Baxter said: “We are concerned about the high levels of non-compliance. It’s a legal requirement to protect online buyers, to ensure fairness and a level playing field for reputable retailers, and to ensure the smooth working of the internet marketplace. “However, with the continuing expansion of e-commerce in the UK, new entrants are joining the market every day, many of them small micro-businesses with little experience of consumer law.”

So, businesses that enter the online marketplace with no knowledge of consumer rights, will only attract unwanted attention from institutions like the standards agency.  This could result in a fine for the online business and bad press for online retailing which is a key part of our economic recovery.

With the public more savvy about their rights as a consumer, it’s up to the online business to ensure their website and online offering is reputable.  This includes being aware of the responsibilities as an online trader and ensuring the correct procedures are in place before trading online.

David Reilly from Create Ts and Cs, director who draft and provide bespoke terms and conditions to online businesses commented “it’s a good idea to keep trading standards off your back; such organisations have the power to fine and tarnish the reputation of the business, leading to a loss of online sales.  It’s a risk for a business not to follow the law and not to communicate the correct legal rights to their online customers.   So why take that chance? A company that is serious about customer service and building a sustainable online business will take the right steps to ensure their customers are protected”.

Online inspection of Websites

SCOTSS will in the future conduct random online inspections of websites, this will include SCOTSS officers carrying out “test purchases” to check how a consumer would be treated when they purchase from the site.  This test will also include cancelling the service within the statutory seven-day period to test whether the website operators are following through on distancing trading obligations, as per the law.

There is a trust that exists between the general public and the online trading community, when an online purchase is made, online transactions lack the traditional personable retail face to face contact that can reassure a potential customer and establish the credibility of the company.  In the virtual world, all that’s visible is the website, social media communications and the correct terms and conditions outlining the customer’s rights meaning this formal communication is not only a legal requirement but demonstrates the correct customer service approach to protecting your potential customers.

Self-drafted and ‘off the shelf’ contracts versus bespoke contracts – what’s the difference?

 

Self-drafted or general off the shelf contracts are not adequate for those businesses who want to manage their liability, a case from www.lexology.com (legal website that explores business issues and law) shows how self-drafted or off the shelf contracts just don’t manage the risk within a business and can lead to businesses issuing contracts that are simply unenforceable.

The High court found that an exclusion clause contained within the standard terms and conditions of an IT supplier was unenforceable leading to an award of damages of £110k in favour of the Client. The case (Kingsway hall hotel limited V red sky IT limit [2010] EWHC 965 (TCC). Legal firm RPC (www.rpc.co.uk) commented on this case saying, “from this case it was clear that there existed a clear disconnect between red sky’s standard terms and conditions and the manner in which red sky sought to sell their software.  Suppliers should ensure that their standard terms accurately reflect the sales and contract process. Any gap between the process envisaged in the standard terms and the actual process may result in clauses being unenforceable.  Standard terms and contract processes should be reviewed regularly with legal advisers to ensure enforceability and maximise their benefit”.

Click here to view or Bespoke contract versus self-drafted or off the shelf contract chart outlining the pro’s and cons.

 

Please sign here ….however please don’t ask me what’s in the contract.

 

It’s not uncommon for a client to sign a contract where the content is not understood, the origin of the information unknown or is drafted by an unqualified hand?  There are a variety of reasons for this; one of the key reasons is that legal services appear to be an expensive luxury rather than a must-have for your business.  Generally, this type of contract is unenforceable and this can cause a problem for both parties when a dispute arises.

The danger of contracting with an unenforceable contract is expressed in an article posted on Lexology, “Am I being unreasonable”? by legal firm Nabarro LLP, the article comments on the importance of a contract containing clauses that are reasonable and in-line with the Unfair Contract Terms Act 1977 (UCTA), “it is always been in a contracting party’s interests to consider the reasonableness of the contract clauses; take advice on whether the court would be likely to uphold the clause should it be subject to challenge”.   So knowing what’s enforceable and what’s reasonable defines the credibility of the contract.

Its key to remember that this is not just a legal issue but is a business issue, a think tank aimed at creatives/designers called Creative Latitude believe that the contents of the contract is a key client communication, “If we have to take a deep breath and are physically uncomfortable when we present the contract, that uneasiness is bound to be communicated to our client. The last thing you want to do is cause your client to see the worried look on your face and wonder, what the heck is in this contract”?

David Reilly, director at Create Ts and Cs commented, “Our client acquire bespoke contracts ratified by a solicitor so they know that the contract is enforceable (deemed reasonably).  It’s critical that their potential customer knows they have gone to the trouble to invest in a contract that is enforceable and protects both parties”.

Considering the investment of time and money to contact clients, coffees and lunches, sales systems and marketing campaigns, it makes sense to continue the good work and invest in a professionally written, assessable contract relevant to your business ensuring its ‘reasonable’ and ‘enforceable’ throughout. 

 

The correct contracts attracts investment; get the due diligence right.

 

 

Making your business an attractive proposition for an investor or potential buyer can be a time consuming task.  Apart from the usual business day to day of ensuring you are making sales and keeping your clients happy while increasing profitability; there is the added preparation of documentation to allow the key business info to be viewed from the outside and understood by a potential suitor.  The process of viewing and interrogating this documentation is generally classed as ‘due diligence’.

According to sellingbusiness.ca, “despite all the uncertainty regarding the due diligence process; some principles that if applied can assist the process and increase the chances of reaching a satisfactory sale.  For example it’s advisable that the sellers prepare a large portion of the documentation needed for due diligence before putting the business up for sale, especially financial and accounting information and legal documentation”.  This principle is applied to either investing-in or buying a company”.

Colin Munro, Director at Mi City, www.mi.uk.com comments on the need to impress an investor, “Small businesses need to protect their intangible assets in order to build value and if investment is to be attracted at any future date then clear legal definitions will be a requirement of the investor.  It is much better to agree terms with a supplier prior to commissioning any work, clarifying any areas of ambiguity. This will help to prevent future disagreements and potentially costly negotiations”.  

So, having the right contracts is important as it shows investors or buyers you can protect your asset and build value within the business.  David Reilly, Director at Create Ts and Cs, “in my experience investors or potential buyers will feel a certain reassurance that you have gone to the trouble of putting in place the correct contracts with suppliers and customers to assist in managing risk and help contract in a manner that assists the process of getting paid on time, protecting your IP and generally providing a professional framework to protect both parties while doing business.  Also a contract can demonstrate residual value where contract duration is signed up to; for example, a signed contract ensures a certain amount of revenue and value for the contract period.  i.e. a 12 contract should yield 12 months revenue, which of course is attractive to a potential investor or buyer”.

It’s not unreasonable for a potential investor or buyer to be interested in a company that has invested in its own business processes and formally manages their client relationships. 

Bill Christie, FCIBS is a Chartered Banker and Managing Director at CER, www.cerbusinessfinance.co.uk, who assists businesses identify the appropriate funding for their company commented “I cannot stress strongly enough the essential requirement for a business, no matter how small; start-up or indeed established to have an “approved” set of Ts & Cs; specifically designed for your business.  Yes, you can obtain Ts & Cs from the Internet but they may well not be designed to provide the right protection that you and your business require.  When discussing a funding/business proposal with a prospective client, I consider that Ts & Cs are just as important as Business Insurance”.

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What our software developer clients are saying

We recently drafted a bespoke set of terms and conditions for PHP Developers, Malt Blue Ltd and they’ve been kind enough to blog about the difference and added value bespoke Ts & Cs have made to their business.

Now maybe it’s just a matter of perception in my own mind here; maybe it is. But ever since going through this process, the tone and quality of the interactions with clients has definitely gone up a number of notches. I see myself taken more seriously and remunerated as such.

But maybe it’s something else. Maybe, it was just coincidental timing – I don’t believe that. Irrespective of what it is, I know two things:

  1. I’ve had a good solid look and think about my intent in running a freelance business
  2. I’m more focused and professional in my conduct

This isn’t to say or infer that I wasn’t before. But going through this process changed me, because of all the topics that I started considering in such depth; which in turn, led me to consider other aspects of how the world sees my freelance business. Topics such as letterhead, email signatures, they way that I write and communicate with clients and so on.

Read the full post.

It’s always great when we receive such positive feedback from our clients.  How can we make a difference with how you perceive your business?  Contact us today.

 

Creatives can neglect contracts at their peril.

The subject of terms and conditions traditionally for Creatives is usually the last issue on their mind. It’s also common for Creatives to acquire someone else’s terms and conditions or write their own contracts. Unfortunately the credibility of these contracts is only tested in times of dispute; so contracts drafted in bullet points format or acquired from an unreliable source generally don’t contain the correct enforceable clauses to assist the business to resolve issues that arise.

Similarly, those many companies who choose to do business on a handshake, as honourable as that sounds, find the frailty of the contract is exposed when a dispute arises, as there is no real legal detail or proper fall back position to solve disputes. Writing down the details of how you’d like to do business is a simple idea and best captured in a contract that is tailored to the relevant business sector and business type.

There seems to be a natural resistance to formality and detail, yet during times of disagreement it’s often the details that will protect a business.

Terms and conditions can be for many Creative businesses a way for outlining ‘how they want their customer to engage with their services, from quotation to completion of the work.

Colin Hardie, Director at Ubisan a web commercialisation business commented, ” Create Ts and Cs listened and managed to distill the more specific elements of my business into a coherent and highly professional set of bespoke terms and conditions…. something that would have been impossible to achieve with an“off the shelf” alternative”.

This also means, outlining your payment terms, the IP ownership and managing scope creep through effective ‘sign off’ processes captured in the Terms and Conditions. All these issues are central to ensuring you get the work done on time and in-line with your Creative business strategy while getting paid, which can assist cashflow and promote sustainablity within the business.

David Atkinson, Director at design agency CO2 Design, said,” Before we got a bespoke set of Ts and Cs, we like many others got a set from the web or looked at others, now we have a ratified contract that communicates clearly with our clients.  Also, we’ve managed to reduce the amount of debt within our business to a level we can manage, which has helped the business”.

Its also common for some potential clients to request a set of Terms and Conditions prior to doing business, if you don’t have a relevant set of Ts and Cs, then you’ll simply accept the terms offered by the client or in some cases run the risk of signing up to a contract which is packed with clauses no one knows the consequences of signing up to! Meaning you get paid and agree to the terms according to the clients terms and conditions.

David McCullough, MD of Urban Niche, a social media marketing business based in Edinburgh commented, “Urban Niche contracted Create Ts and Cs to draft a bespoke set of Terms and Conditions to support our bid for NHS business, I am delighted to say we won the business and believe Create Ts and Cs contributed greatly to our bid and ensured we had the correct commercial contract; helping us to present our business professionally and prepare appropriately for our negotiations”

Having a relevant, sector focused contract in-line with the Creative business is one way of avoiding unnecessary disputes and allows the Creative business owner to concentrate on doing the work they enjoy doing .

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Keeping HMRC off your back when employing contractors.

If you are self employed, then you’re part of a significant growing trend, the latest statistics from the Office for National Statistics show that a record 4.1 million or 14.2% of the entire workforce are self employed.

As your business develops, it’s not uncommon to consider expanding the headcount.  With a variety of pressures on business owners and the perception that employment law is complicated and employing a staff member costly, more and more companies are deciding to hire contractors instead of taking the option to employ staff.

However, a recent number of cases has flagged up the need for both parties to differentiate and protect themselves, not only for the company to manage their own liabilities but to clearly define the relationship between both parties regard HMRC IR35 regulations.

A recent 7 year dispute that concluded in 2011 involving Airbus UK and reported in lexology.com, demonstrates how HMRC challenged the relationship between Airbus UK and their contractors (self employed persons). HMRC deemed the relationship to be that of an employer to employee.  A negative outcome for either party would result in back dated tax, national insurance and employee related costs to be paid to HMRC.

The Tribunal found in favour of Airbus due to contractual clauses signed by both parties. What is scary is the length of the dispute and resources required to engage in such a dispute, once again demonstrates the complexities of IR35, but also highlights the importance that the courts place on the factual reality of the relationship between the parties. Whilst both contractor and company can strengthen their case by ensuring that their relationship is documented within a contract, it is essential that a contract reflects the ‘reality of the relationship’.

David Reilly, Director at Create Ts and Cs, who provides the service of bespoke contracts to companies who intend to work with contractors commented “It’s critical to protect the business by deploying the right contract when working with contractors, after all from a company perspective, it’s your end client and the work carried out must be of a standard that reflects your business.

He continues “From a HMRC perspective its critical both parties differentiate themselves by catering for the IR35 issue within the contract.  Also, both parties should enter into a contract that reflects their capacity to deliver, skill set and capabilities; it’s about achieving a balance.  This is best reflected in a purpose drafted contract specific to the companies involved”.

Dave Telling, Accountant and Director at Accys also commented “The problems with employment status begin when HMRC start asking questions, which is generally several years after the contracting commences.  If you don’t get it right at the beginning, the Revenue may well succeed in proving you’re an employee and you will have years of tax and national insurance to pay at once – an expensive mistake.”

Another important way of differentiating both parties is through each party acquiring their own public liability and indemnity insurance, which is also reflected in the contract between the companies. Chris Knight of Business Protect, an Insurance Brokerage says “If either party is working away from home, possibly within a client’s premises they should consider Public Liability Insurance of at least £2,000,000. If they are providing advice or their work may be subject to Errors and/or Omissions, then Professional Indemnity Insurance will be required”.

Chris continues, “It is becoming more common for the company to insist the contractor acquires their own insurances, after all they are a separate company or sole trader with their own requirement to protect themselves and cover their liability”.

It’s clear there are a number of precautions to be taken when hiring a contractor.  The steps you take to protect both companies will help ensure the experience is both a positive and profitable one.

 

Developing bespoke contract services for international markets.

Create Ts and Cs has recently won a research and development grant which will see a new collaborative project begin this month. Create Ts and Cs has joined up with the University of the West of Scotland and Law Wise, the University Law Clinic, to conduct research into Australian and New Zealand contract and commercial law.

The project will provide invaluable insight into the possibilities of extending Create Ts and Cs services.

Trading for over three years and based in Glasgow and Edinburgh, Create Ts and Cs has successfully built a reputation for providing small businesses with bespoke terms and conditions.  Our unique approach to providing commercially focused bespoke contracts has allowed us to build a company that’s focused on our client’s contract needs.

Dale McFadzean, Academic Director Law Wise Law Clinic, said “we are delighted to be working with an innovative business such as Create and we hope the research findings lead to future expansion and collaboration”. Create Ts and Cs, Managing Director, David Reilly said “This is a great opportunity of us to work with a progressive University, who shares a similar ethos to us”

David continues, “Our goal is to simply assist small businesses avoid unnecessary business disputes”.  “We provide our customers with contracts relevant to their business sector, sales processes and operations.

Our customers require contracts that enable them to protect their business, act professionally and enter into business agreements that allows them to managing their client’s expectations and build healthy business relationships”.

 

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Create Ts and Cs provide a bespoke set of Terms and Conditions for your business at a fixed price, this unique approach to individualising commercial Terms and Conditions allow Start up and SME sized businesses the opportunity to protect themselves, manage risk and guard against future unnecessary disputes at an affordable price. Download: terms & conditions | privacy policy