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23-October-2007
Prevention is better than cure
We all know how difficult it is to run businesses: the bureaucracy, the red tape and new legislation are all part and parcel of running businesses.
There are, however, ways of spending a little to protect ones business. The purpose of this article is to set out a few simple steps where businesses can take preventative action to stop a problem from happening or at least alleviate the consequences if a dispute occurs.
The rate at which employment law changes both domestically and through European directive is alarming. It is a legal minefield potentially. However, businesses can be proactive and prevent disputes escalating if for example they ensure that their written contracts of employment are up to date, their policies relating to for example grievance and disciplinary procedures and to ensure that benefits are given to employees in accordance with legislation such as working hours, pay, holidays, etc
When businesses enter in to a relationship for example for the sale and supply of goods, generally speaking, one company at least (sometimes both) will have their paperwork in order i.e. Purchase Orders, invoices, quotations etc which are made subject to those Terms and Conditions which can limit liability for defects or ensure that payment is made within certain time etc. This can mean that one company can get the upper hand over the other, alternatively, if both parties paperwork is in order and subject to their own Terms and Conditions then there can be a dispute between the businesses as to whose terms take precedent. There are cases, which are conflicting, but generally speaking, the last piece of paper to pass between the parties tends to take precedence. It is obvious from the above that businesses can take steps to protect their position by making sure that their paperwork is in order. A strict set of Terms and Conditions can ensure that your business retains the upper hand if a business relationship goes sour.
Successful companies tend to have a clear strategy of how to compete within their markets. Some compete on price alone, but that is becoming much more difficult now that markets are becoming increasingly global and the emerging economic powers of China and India undercut domestic suppliers. The most successful companies maintain competitiveness by offering innovative goods and services, but even this is rarely enough on its own: Unless those innovative goods and services and protected by Intellectual Property (IP) rights, they may end up being copied by others before any real market impact has been achieved. Registering IP rights, and rigorously enforcing them, can protect your business from unscrupulous competitors, and ensure that you alone reap the benefit of your company’s innovation. IP rights can also be leveraged further to provide constant revenue streams via, for example, licensing or franchising your business concept. If you have not considered IP rights before, they may well cost less than you think. For example, UK-wide registered design rights can cost as little as £60.
Every business needs money as Sir Alan Sugar says on The Apprentice, business is about making money. We can send out all the bills we want but if they do not get paid, we make our employees redundant and we go out of business. Having a successful credit control and debt recovery procedure is essential to the running of every successful business. One cannot avoid this. Failure to have a good credit control and debt recovery procedure in place can be catastrophic.
When all else fails you come to see me. If there is a dispute then I am the person to sort it out. No one comes to see me for pleasure. Although we describe it as Litigation still, in a broader sense, we are talking about resolving disputes. This can be done through correspondence, negotiation, mediation and of course Litigation. We are now told that Courts should be seen as last resorts. Court proceedings can be costly and unpredictable. Unless the case is a strong one, Court proceedings should not be entered into lightly.
The above is a snap shot of ways in which businesses can look at protecting themselves. This is an old saying but one which is true. If we spend a little on prevention, you are likely to save yourself a lot of money that attempting to cure.
ENDS
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