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How to not fall into it
When you are starting a business or launching a new product you inevitably go through a planning phase which involves nailing down the framework upon which you will take your idea to market.
But what do you really need to have in place to get started?
InHouse Legal’s Managing Partner Vanessa Challess has spent years advising people to get their key agreements and policies in writing. The question is,when is enough enough? When is it time to stop planning and start getting down to it?
Every business rests upon a framework of paperwork. From incorporation through all the agreements you put in place with business partners, suppliers, clients and employees, as well as your policies and published trading terms and conditions, your key documents both protect you and establish in law your responsibilities as a business owner.
As a lawyer who has spent years digging people out of holes they are in because they had bad quality documents in place, or even none at all, I know the consequences of not “getting it in writing” only too well.
Working in a leading law firm, I was hired at up to £350+VAT per hour to unpick the messes that arose from faulty, inadequate agreements which weren’t up to the job when a niggle turned into a quarrel and then full blown legal proceedings. The best that many clients could hope for was the least bad outcome. There are no winners in litigation except the law firm equity partners.
The compelling case for
“Just Do It”
Litigation was the foundation of my legal career. It’s a fascinating area to specialise in and an incredible eye-opener to how things go wrong for people in their business, property and financial dealings. You see a lot of real distress though. It’s doubly upsetting when you see people have to pick up and start all over again – especially when the entire issue could have been avoided if they had had good advice early on. I came to feel very strongly that prevention is so much better – and cheaper – than cure. In a single sentence, that’s how InHouse Legals came into being. I decided to do something about it.
Having spent some time outside of the litigation arena trying to keep my clients well away from it, I’ve helped many entrepreneurs shape their fledgling businesses, to lay their framework down on solid foundations. I’m passionate about that work. It’s arguably the most satisfying part of my job, to assist someone in kitting out their business ship so that they can set sail safely with their head held high. My clients know they have done it right and can go to market confidently.
So you might be surprised to read the following message from someone like me. But I’m also an independent entrepreneur who has grown one successful business from the ground up – and recently launched another. Sometimes there has to be a balance. Sometimes you just have to get on with it.
Run with your idea
I’ve seen a lot of people squander a brilliant idea because they got bogged down in the plethora of advice out there on forming jargon-infested business plans, forecasts, strategies and analyses. There are a host of methods of overthinking rather than getting out there. But the reality is, as long as you have some basics in place, it’s OK, even preferable, to allow the framework to grow around the action. It certainly beats having the action play a waiting game whilst some largely theoretical framework is made to look like the ones in the books.
All too often, the key symptom of this self-defeating cycle of procrastination (and maybe terror!) masquerading as “planning” shows itself when a client comes to me with a product or service that either cannot be accurately recorded in a set of trading terms and conditions or is so convoluted and tortuous that I personally wouldn’t want to try……..Months have passed and where is the actual business ?
So how do you strike a balance? What do you really need to get your show on the road without running into devastating problems further along the way? And what can you safely skip?
HAVE A WORD WITH YOURSELF
It’s like having a baby, there will never be a right time. In the words of Susan Jeffers – “Feel the Fear and Do it Anyway”. Any entrepreneur – or, for that matter, anyone who has ever carved out their own independent path in life – will tell you they had to bat off all kinds of negative, fearful input from friends and family. Sure, it’s good to take advice, seek feedback. But if you are falling into the over-planning pit you need to ask yourself whether you are getting anything constructive from the feedback or just more fuel for fear.
HAVE A WORD WITH US
If someone is pouring cold water on your efforts and issuing dire warnings over what can go wrong – there is a straightforward solution. Get some real advice on viability and what you can do to protect yourself from bad outcomes. Don’t fall prey to vague fears and ‘what-if’ scenarios. Whether you are looking to launch a new product or service, go into business with someone whose talents complement yours, or take the plunge into employing staff in order to take your business up a level, we can help you work out what you need to be ready for that so that you don’t run into problems.
ZERO IN ON DECISIONS, NOT PROBLEMS
Here’s a little secret. When you see a successful business leader in pretty much any field, a good lawyer is seldom far away. There is a reason for that and it’s to do with the mindset of successful people – about which much has been written but not a lot that is really practical. It’s safe to say that successful people approach problems differently from others. A successful mindset looks at a problem and instead of quietly worrying themselves into a state of paralysis if they can’t figure out an answer, sets about assessing the pros and cons systematically and coming to a decision.
It’s not so much a case of that old chestnut “There are no problems, only challenges” – more a case of realising that any sort of problem, roadblock or difficulty is a situation that requires a decision and focusing on that. Making good decisions requires getting hold of as much information as possible and understanding the situation in question as well as you possibly can.
When it comes to business, your legal advisor is the best resource you can have for this. Can you do it or can’t you? What are the risks? Can they be offset? What are the costs? InHouse Legals provides this kind of commercially savvy advice to clients and deals with the paperwork to nail it down where necessary. If there are things you are concerned about in your vision of how your business should grow, about how to put a great idea into practice, don’t waste time turning it over and over until it’s suffered Death by Spreadsheet and is ready to be filed under “Millions I Might Have Made. But Didn’t”.
Book a time and let’s get down to the nitty-gritty so you can make an informed decision. Because indecision is the one thing you really cannot afford. Don’t flaff in front of the goal. Get a professional on the case, not your depressed pal down the pub.
ON THE SUBJECT OF FEAR…(AND OPTIMISM)
Get wise to Fear-Based Marketing. It’s a time-honoured technique, the unfortunate fact is that it works. Fear sells and there are literally thousands of people out there who have their own wares to sell and will use your fear to do that. The B2B market is rife with it because these people know that running a business is pretty scary. Whether it’s coaching, bookkeeping, incorporating limited companies when you don’t need one, website building (and watch out for those who can build but not design and vice versa), lead generation, SEO – or flocks of other stuff that often comes accompanied by the term “consultancy” – the newbie entrepreneur can quickly suffocate under the weight of it – and waste a lot of money. Look for the value in what someone offers you, rather than let them focus you on the fear of what will happen if you don’t buy from them.
Take note: the worst of these people also sell “optimism” – aka “unrealistic expectations”. They will dangle the promise of fast and fabulous results if only you will hand over a significant wedge of the nest egg you have set aside to get your business rolling. Marketing takes time, profitability takes time. If you are putting yourself out there and clearly prepared to give it all you’ve got, you are, unfortunately, a prime target for snake oil salesmen promising the earth and telling you everything you want to hear. Build your optimism on realistic foundations, work hard, give good value and be prepared for the long haul. If there’s real luck to be had, that’s where it will find you.
WHAT YOU SHOULDN’T BE WITHOUT
All that said, let’s get real. There are some things you shouldn’t move without but the good news is they can be dealt with quickly and affordably. You need some sort of plan for how your idea is going to take form in the real world and make you some money. I’ve spent many an hour with people who are trying to start a business who don’t have a clear idea of when their sales are formed, how and when payment becomes due, what they are liable for or even what cancellation policy they need in place.
One of my own learning experiences is that I no longer give free consultations to these people in preparation for their terms and conditions unless they are committed to doing the work with me because that meeting turns into a seminar on legal basics and business planning and what I give is too valuable. Why? Because every set of terms and conditions contains a business plan: you cannot accurately record your trading terms without having thought in depth about what they are. And what they are is your business model.
Here’s the bottom line. If you’re starting up and can’t answer all of the questions below, whether you can form the answers into written terms yourself or not, then you’re going into business blind.
Don’t worry, there are plenty of people who have folders full of attractive bound documents labeled “Business Planning” and “Marketing Strategy” that can’t answer them either. Sort them out, nail them down and then get us to draw up a proper document that is about your business, your product, your world, not some fictional, templated one. The very process of drawing up a legally binding document is immensely clarifying. You might be surprised at how positive an experience you will find it.
The 9 Essential Questions:
• When is the contract formed and binding?
• When/how/where are you selling your goods and/or services?
• When is payment due?
• What do you do about deposits or late payments?
• Do you have a cancellation policy?
• What are you guaranteeing, if anything?
• What liabilities can you restrict?
• Do you need to protect your intellectual property or pass it to your clients?
• Do you need to protect your confidential information?
I’m not overly sure what business planning is when it comes to a brand new and unproven business, it seems to be something that takes up a great deal of time and money when that time and money could be spent in actually getting the business off the ground. It simply doesn’t matter what plans you draw up, or what mood boards you stick on your wall, if you don’t get your ideas out there into the real world and sell them. There will be plenty of people who disagree with me, whose own livelihoods depend on your belief that what they do is indispensable, but, as I said before, the time will never be perfect and you will never have all the bits you’re told you need in place. So, just do it.
“Every set of terms and conditions contains a business plan: you cannot accurately record your trading terms without having thought in depth about what they are.
And what they are is your business model.”
And here’s my advice:
Make sure you have agreements in place as soon as possible but don’t get stuck in the rut of over-preparing everything. We can help you sort out a minimal running pack so you are equipped and protected to trade. And of course, if something comes up that needs proper advice we’ll be here for you and already have an understanding of your goals and circumstances.
And meanwhile, go to it – knowing we’ve got your back. Spend your first twelve months building connections and turnover and give me a call when you’re ready to invest in some protection for the value you’re building.