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Posts Tagged ‘Advice’

Clients not paying on time or refusing to pay?

Tuesday, June 2nd, 2015

Overdue payments

If so, ask yourself this: Do your clients actually know when they need to pay you or are you assuming they do!

Check through these three easy steps:

1. State your terms BEFORE you provide the goods or services– this may seem obvious but many businesses do not actually tell their customers when they want to be paid! I had a client call me up for help because she was owed money by a customer who was refusing to pay.When I asked her to send me a copy of her Terms of Business, turns out she didn’t have any! She had sent out beautifully coloured proposals setting out her services and the price, but no actual statement of when it was payable or what would happen if they were late paying.

2. Check your invoices– do they clearly set out:

  • Payment terms e.g. ” Payable within 14 days from date of invoice”
  • Your bank account details
  • That interest is chargeable if client is late paying
  • Link back to your Terms of Business?

3. If all else fails, sue! If the amount you are owed is less than £100,000 and you have done everything possible to get it back, you can actually take the client to court yourself online without involving a lawyer.Check out the new Money Claim Online service, offered by HM Courts & Tribunal Service. It costs from as little as £25 for claims up to £300.

If the customer does not pay or defend the case, you get judgment against the customer and can then enforce it. Most customers do not want to have a judgment against their name as it will affect their credit ratings if they want to borrow money, not to mention the overall black mark it creates on all sorts of records.

If you need help with drafting your Terms of Business or would prefer us to handle the claims process, contact us now.

Look before you …sign!

Sunday, October 21st, 2012

If there is one thing that truly gets me down as a lawyer, it is people running businesses without proper terms & conditions in place or worse still, blindly signing up to terms without even reading them! You may be thinking to yourself “of course I would never do a thing like that!” However, in the heat of the moment, strange things happen. Take for example, a multi-million pound company who was so thrilled by the prospect of the orders streaming in, that they didn’t check the terms and just signed the contract presented to them. Then the economic downturn hit and they found they were locked into accepting orders at a price that meant they made a loss on every order. I was called in to the rescue and imagine their faces when I had to report that the contract had no termination clause and they were locked in for several years….

Look before you...sign!

Do you really know what you are signing up to?

Then there was the case recently of an on-line company that deliberately put a term in their contract that by placing the order the customer thereby sold their soul to the company! This was simply to test whether customers actually read their terms. Surprise, surprise: no one noticed and orders kept streaming in!

SO , please, please only sign up to terms you have read and that you understand. Here are a few key clauses to look out for:

  • Term of the contract– how long are you truly being asked to sign up for? Is there a minimum term when both parties are locked in? Will the contract renew automatically, if you don’t let the other side know you want out?
  • How can the contract be terminated? Usually contracts set out four types of circumstances:
    1. Where neither party is at fault and you simply want to end the relationship. In this case, check how much notice both parties need to give and that the period is long enough to enable you to deal with the change. This is particularly so if you are the supplier and you need to give notice up the supply chain to your own suppliers.
    2. Where there is a breach-this is a huge subject in itself, but my simplest advice is to think through all the possible scenarios of what could possibly go wrong and spell out what should happen in that instance. Do not leave it to assumptions. Say what you expect the other side to do to remedy the situation and how much time they have to do so. Are there any breaches which are so serious, that you can terminate instantly? If so, spell out those instances too.
    3. Where there is a change in status e.g. one party goes into liquidation, commits a criminal offence or simply gets ill or dies-often this entitles a party to immediately terminate the contract.
    4. Force Majeure or ‘Act of God’ i.e. something beyond the control of either party forces one party to delay or not be able to perform its obligations under the contract. The recent ash cloud is such an example. If the situation persists for a certain amount of time-usually 30 days- either party can terminate without being in breach.
  • What are the payment terms? Consider whether to be paid or pay in stages on completion of certain milestones. How is payment to be made and what happens if it is late? Is interest chargeable, can either party walk away for breach and/or demand goods back?
  • Don’t forget extras such as delivery costs & VAT-these cannot be added without warning beforehand
  • When does risk in the goods pass?  Whilst you may be happy to continue to own the goods you supply until you receive payment from the customer, you may wish for the risk in the goods to pass to the customer the moment they leave the factory. This needs to be clearly pointed out so that they can take out appropriate insurance. Sometimes risk will pass at a later stage e.g. when loaded onto a ship or other carrier. You may need to consider the internationally recognised INCOTERMS which are a shorthand for different freight situations and determine when risk passes.
  • What is each party’s liability if there is a breach? Most contracts envisage a financial cap and only allow the other side to recover ‘direct losses’ and not ‘consequential loss’. Again, don’t just use these terms on their own; spell out what you consider to be direct loss and what is excluded. There are so many possibilities. Remember also, that you cannot exclude your liability for injury or death as a result of your negligence or for fraud. You may have seen contracts that attempt to do this, but theses clauses are illegal and have no legal standing.

This article has only touched on a few issues and already you will have seen how many further questions these produce in turn. Please do seek legal advice at the outset of your business dealings rather than when things go wrong. A well drafted contract with clear sections for the different stages of the contract, should become a handy tool to refer to for you and your staff-just like a recipe book. You may not leaf through it with your mouth watering, but at least you will sleep well at night!

What are your rights as a debtor to a loan organisation?

Friday, July 6th, 2012

In these current difficult economic times, many small business owners are not only seeking loans from their banks, but turning to independent loan organisations.  On such organisation, Wonga has recently been criticised by the Office of Fair Trading (OFT) for sending customers letters which falsely accused them of committing fraud.  The customers in question had either fallen behind on repayments and entered a debt management plan; or had contacted their bank requesting a previous payment to Wonga to be retracted.

Wonga was also alleged to have customarily told customers working in the public or financial sectors that by being in debt they were breaching their terms of employment.

The OFT has told Wonga it may face a fine of up to £50,000 every time it adopts aggressive or misleading practices with its customers.

Wonga argues that the alleged incidents were few and isolated, and that procedures are now in place to ensure similar problems to do not occur in future.

If you have any queries relating to your legal rights as a customer of a loan organisation, please contact Jo Tall at jo@offtoseemylawyer.com.

Will Singapore become the “entrepreneurship capital” of South East Asia?

Monday, May 28th, 2012

There are various reasons why entrepreneurship has not traditionally thrived in Asia.  Relatively speaking, US culture regards failure in business as a positive part of the learning process, and therefore Americans are more inclined to take risks.  Asian culture, however, is less forgiving of failure.  In addition, Hugh Mason (Chief Executive of Joyful Frog Digital Incubator (JFDI)) explains that the traditional method in Asian schools is “all about getting the right answer”, and that “being smart sometimes weighs against entrepreneurship”.

Traditionally Singapore has been considered by many in the business world as a gateway to South East Asia, as it represents a relatively small market of five million people.  Investors often choose to temporarily place their money in Singapore before investing in larger markets in the region such as Indonesia, Malaysia and the Philippines.  However Angel investors and venture capital funds are increasingly seeking investment opportunities in Singapore itself.

A growing number of educational institutions are running entrepreneurship programmes and providing mentoring opportunities; and the Singaporean government are actively removing regulatory barriers in a bid to encourage entrepreneurship.  Ron Mahabir (found of Asia Cleantech Capital) states that “While the government has done a great job of loans and grant programmes, culturally it’s very difficult to push entrepreneurship very quickly.”  Change, however, is undoubtedly underway in Singapore.  In fact, according to the WorldBank, Singapore ranks at Number One in the world “for ease of doing business, and Number Four “for starting a business”.

Singapore-based JFDI is working in partnership with SingTel [a subsidiary of a major telecommunications company] to run an accelerator programme for start-ups from around Asia.  This program allocates start-up teams from around the South East Asia with mentorship from experienced entrepreneurs and specialists for 100 days, after which the start-ups can pitch to investors.  Wong Meng Weng (who helped start JFDI) says, “I see Singapore as the technology and start-up capital of South East Asia, not unlike the US where you recruit from around the world and get them to come into Silicon Valley”.

Female Entrepreneur Focus: Wendy Tan White

Wednesday, May 23rd, 2012

In the late nineties, Wendy Tan White helped develop the UK’s first online-only bank, Egg.  She says, “We looked at the idea of people personalising for themselves online.  The whole idea behind Egg was [that] people wanted to customise and control their finances.  We saw this was a moving trend.”

Building upon this trend, Ms Tan White decided to start a business funded by advertising revenues, which helps people create their own website, and then assumes the responsibility of hosting and managing the site.

The business (named Moonfruit) was funded by investment from Richard Duvall (her mentor at Egg), LVMH, as well as from friends and family; and venture capital was provided by Macromedia.

Following a popular advertising campaign, Moonfruit achieved success very quickly, and the company was able to move into plus Soho offices.  Within six months of its launch in January 2000, the business had built up 40,000 users – and was even ranked among the top 12 visited sites in the UK.  When the dot com crash occurred, however, Moonfruit’s main investor pulled their funding, and the revenue gathered from selling advertising space was not enough to pay the overheads.

Moonfruit went through a dark period during which the staff roster was cut from 60 people to two, and the business had to relocate from Soho to the attic where it first started.  Ms Tan White could very easily have given up when the business became insolvent – but she tenaciously kept going, substituting the former free service to a subscription-based service – and by 2001, Moonfruit was profitable once more.

The new tiered subscription package has proved highly successful; and combined with clever marketing campaigns, by 2009 the turnover had increased to $1.9m dollars.  In 2011 its turnover rose to $3.9m; and by the end of 2012 it is likely to have risen substantially due to its proposed expansion into America.

Over 3.5 million websites have been built using Moonfruit’s point-and-click interface and drag-and-drop templates, and the company is currently the Number One ranked hosted web builder in the UK.

There is a lesson to be learnt from this story: The true entrepreneur does not give up in the face of adversity, but will find a way to succeed through well-judged adaptation and by taking risks with innovative strategies.

The Recession can be Good for You!

Tuesday, May 22nd, 2012

Founded by husband and wife Juliette and Russel Joffe in 1998, the restaurant chain Giraffe has not only thrived throughout recent economic crises; rather, Mr Joffe insists the recession “has been positive for us”.  He states, “It has enabled us to review our strategy.  This is an opportune time to review your business – and aspects that you might forget in good times.”

The Joffes’ advice for not only surviving but possibly benefiting from times of austerity, are as follows:

Get best supply prices:

“We have gone back to some of our original mission statements; reviewing our staffing, talking to suppliers to get the best prices”

Run a tight ship, but don’t let this compromise the quality of your products or services:

“We don’t cut corners or cut costs.  Everyone has to run a tighter business today.  The ones that cut corners and costs are the ones that will suffer long-term because standards of service will decline.  You need to keep the investment and innovation going. It is important that people see you moving forward rather than stagnating.”

Give customers a good deal:

We have also been offering vouchers and deals. It’s the norm today. When people go out to eat, they think: ‘Where is there a voucher?’ We have been focusing on our service and offering customers the best value for money that we can”

We are producing a better bottom-line profit by running a better business. We haven’t let go of any staff as such, just increased sales and not overheads.”

Is your promotional material legal?

Monday, May 21st, 2012

As many of Off To See My Lawyer clients are running businesses related to the health industry, we thought you may be interested to hear the outcome of a particular recent Advertising Standards Agency enquiry.  Six complaints were made about the claims of Miruji Health & Wellbeing’s product “Sit & Slim”.  Miruji Health & Wellbeing had made claims in an advertisement in the local press, and on their website, that their “slimming and therapeutic massage chair and programme” had been clinically proven by the NHS to induce weight loss, relieve stress, and lower blood pressure.  It even went on to say that the chair could provide a solution to obesity.

The ASA established that there had in fact been no formal NHS clinical research.  A casual study had taken place at a mental health hospital among staff participating in a free trial.  The hospital in question did not treat obesity.  Therefore this aspect of the advertising claims being made by Miruji Health & Wellbeing was a misleading endorsement, and as such held to breach two of the CAP Codes.

With regards the claims that the chair could treat high blood pressure, the ASA considered that high blood pressure is “a medical condition for which advice, guidance and treatment should only be conducted under the supervision of a suitably qualified health professional”.  The advertisements therefore also breached one of the CAP Codes (- in this case, the “Medicines, medical devices, health-related products and beauty products” rule).

On the subject of obesity treatment, and the claims that customers could lose weight using the chair and programme alone – the advertisements were held to have breached the CAP Code relating to “weight control and slimming”.

If you have any concerns about the legality of your own advertisements or the claims you make in your promotional material, please contact Jo Tall via jo@offtoseemylawyer.com and she will provide you with appropriate advice relating to the CAP Codes, and any other legal issues that require consideration.

Event – Inspiring Entrepreneurs: Going for Gold

Thursday, May 17th, 2012

This event is intended for existing small business owners who have a new idea for their business but aren’t sure how to take it to the next stage.

Led by entrepreneurs Stephen Frear and Mandy Haberman, the evening will provide support and advice about business strategy and sustainability; branding; intellectual property; product development; and marketing.  You will also find out about about a new business support programme “Innovating for Growth”.

The event will take place at The British Library Conference Centre on Wednesday 23 May 2012, 18.15 – 21.00; and costs £5 to attend.

In order to book a place, you can either contact the Box Office by telephoning: 01937 546546, or via the website: http://www.bl.uk/whatson/events/event131216.html

Female Entrepreneur Focus: Gennese Williams

Wednesday, May 16th, 2012

The test for a true entrepreneur is to see whether the person in question has turned an adverse situation into a successful enterprise.

When Gennese Williams lost the sight of both her eyes in 2007, she decided she could no longer work for anyone again.  Far from burning her bridges, however, she built upon her existing experience in beauty, music and management to start her own business, MGW London.  She merrily believes in the mantras, “What you think you are worthy of, is what you will attract”; and “You change your reality when you change your mentality”.  In addition, when times are especially difficult, she recommends taking a break and “switching off from everyone” in order to recharge one’s motivation and creativity.

MGW London is an ambitious management and business consultancy agency.  In addition it has its own in-house production, make up, hair stylists and fashion stylists’ team, and a graphic design team (run by her brother); and together they provide a range of services to manage events, projects and brands.

Ms Williams says that the most effective way of attracting clients is by word of mouth and personal recommendations.  In addition she favours social media as it gives prospective clients “the freedom to check me out before they approach us”.

Her advice to other business owners is to remain dedicated to clients; to “be professional at all times, master your craft and listen to your clients’ needs”; and to “always be steps ahead to achieve the best and don’t sleep until you know the job is complete for that day”.

Can you afford to start up your own business?

Tuesday, May 15th, 2012

If you have any misgivings about whether you can afford to start up and run a business, Jo Tall will happily meet you for a preliminary consultation.  Off To See My Lawyer are proud to have successfully helped launch many small businesses – but equally we take pride in our honest and realistic advice.  If we consider that you will be taking too many risks (– financial or otherwise) we will let you know.

Here is a non-exhaustive checklist to help you assess whether you can afford to start a new business:

  1. Off To See My Lawyer provide an extremely cost effective service, but please consider whether you are able to afford legal advice.
  2. You may wish to pay for other professional advice, such as from an accountant, or a web designer, and/or advice from PR experts.
  3. You may require professional assistance in order to draft your initial business plan, and/or business plan software.
  4. Most banks incur a small fee in order to open a business account.
  5. As you would expect, there are fees incurred for incorporating a business into a company; for registering a trade mark; for registering yourself as a data controller; etc.  And you may need to purchase certain licenses and permits in order to run your particular business.
  6. You may wish to insure your business or assets.  Premium rates are variable.
  7. If you wish to rent or buy the premises from which you will run your business, you will need to consider these costs – as well as utilities bills.
  8. The costs involved in promoting your business will add up.  For example – stationery and printing; professional branding/advertising advice; etc.
  9. Machinery and equipment, and IT systems are pricey but necessary assets.
  10. It very much depends on the type of business you are running – but you may need to pay for materials from which to manufacture your products, or stock for wholesale.
  11. Of course, once your business is up and running, you cannot pocket every incoming penny, as there are various taxes to be paid!

While the intended outcome of employing staff is to increase your profits, employees add to your list of burdens and liabilities.  You will need to draft contracts of employment, deal with relevant taxation issues, invest in time (and perhaps money) in training your staff, etc.