A quarter of start-ups make up legal contract
According to a survey by legal firm ContractStore.com, over a quarter of new businesses are failing to seek legal guidance when putting together documents such as terms and conditions, employment contracts and sales agreements.
Not Seeking Legal Guidance Means No Protection
While saving on legal fees, businesses drafting their own contracts risk leaving out clauses that would protect them if the other party forfeits the deal, for example if a client withholds a payment, ContractStore said.
“It appears that start-ups are not taking the necessary steps with regard to undertaking appropriate due diligence,” said Giles Dixon, MD of ContractStore.com.”A decent contract will protect your business just as a decent umbrella will protect your clothes.”
A Common Worry For Start Ups Is Recession
The survey also found that fear of recession is the overarching concern among start-ups, with almost a third of new businesses citing this as their main worry. This was closely followed by bad debt.
Protecting Your SME Is Vital During Tough Market Conditions
However, Dixon argued that watertight terms of business are even more important during tougher market conditions.
He added: “With the climate possibly set to get tougher, it is vital to ‘batten down the hatches’ and leave no stone unturned when protecting your business – whether this is guarding against bad debtors or making sure you are limiting your risk of claims.”
© Crimson Business Ltd. 2008