The story below can be representative of several issues in business. It could be between partners/directors, employees and employers but this one is about a business and client.
We have recently been helping a local business with the issue of an unpaid invoice but unfortunately even our incredible record in collecting outstanding monies could not help this client!
The business in question had completed a very good piece of work for their customer. Which for the cost was felt to be quite reasonable to everyone apart from the customer.
The customer complained that the work done was too expensive and would not pay! But surely if everyone thought the work was good value for money the client should pay?
Unfortunately, our client had not agreed a price at the start of the negotiations and therefore didn’t have a leg to stand on as he had not made it clear exactly how much the work was going to cost and give the client the opportunity to say it was too much.
A fundamental error that could not be defended and a big lesson has been learned. This practice can be and should be made to all business transactions. It is now law that an employee should receive a written contract before they start working so they can see all their duties and the remuneration before they begin so no one is in doubt what they are agreeing to.
New business partners/directors should always enter into an agreement before starting their business. Agreeing how much each partner will put in and what the relevant duties will be.
But when you are starting a business where do you get these documents from. We would always recommend visiting a commercial solicitor to discuss the documents required. However, The Federation of Business has a suite of documents to get you started ideal for start ups struggling with cash flow which can be updated by a solicitor at a later stage if required.
So please before you enter into an agreement with another person make sure you agree all terms, conditions and of course the fee.
Would you buy something from your local shop without knowing the price? Of course you wouldn’t!