Business Start Up – Terms & Conditions
By Richard Turner – Alpaca
Why Terms & Conditions aren’t just small print
You’re busy starting a new business, you’re juggling 50 things at once when someone asks “what about your terms and conditions”. You didn’t budget anything for drafting these and you wonder how important they really are. On balance, you decide you don’t need them right now and figure you can sort this out later, once the business is established.
STOP RIGHT THERE!
It may not be the most exciting part of setting up your business (ok, it’s downright dull) but it is very important.
If you’re supplying to consumers, regulations govern what you’re supposed to tell customers about price, refunds, faulty goods etc, whether you have written terms or not. If you’re supplying to businesses, life is less regulated but it still pays to consider these things upfront to avoid hassle later, as well as terms applying to things you’re buying to use in your business.
Not having clear terms and conditions could also seriously impact your cashflow. Small businesses are the ones who are particularly at risk as customers often give their bills lower priority. What will happen if your customer doesn’t pay on time – have you even stated when you expect the client to pay? Chances are you paid upfront for materials/labour and so a delayed payment will put your business on the back foot.
Worst?case scenario, you spend lots of time and money chasing unpaid bills (or never get paid). Good terms and conditions will build in late payment penalties and make it easier to enforce your legal rights, should the need arise. Sometimes it’s as simple as pointing customers to the terms and reminding them what they signed up to.
It’s not just good for legal reasons, it’s also good for business. Written terms and conditions create certainty so you and your customers know exactly where you both stand. This will manage your customers’ expectations and increase customer engagement and satisfaction. It’s too late after the event to say “but we assumed…”.
You’ve probably thought about the big things: price, payment, and delivery. Have you thought about limiting your liability, intellectual property rights, when does ownership pass to the customer and what happens if things go wrong?
It is worthwhile making sure that your terms and conditions are well drafted and in place before you start trading. We can’t end every blog with “speak to a solicitor” and so if you really don’t want to or can’t afford to, then at least have a stab at setting out your intentions in respect of the points mentioned above
Don’t just copy a set you found on the t’interweb unless you’re absolutely certain they’re exactly what you need (TIP: they won’t be). We’ve seen many a client come undone thinking this was just a box-ticking exercise and then being surprised by something hidden in their own terms and conditions because they hadn’t read them. Remember, the only reason not to read the small print is because you wrote it.