SME BUSINESS TIPS
ALTHOUGH undesirable, disputes are part and parcel of business life. Sometimes litigation is unavoidable and necessary and proceedings are required to be taken/defended.
However litigation is time consuming and brings with it an unwelcome distraction for all those involved within your business.
Undoubtedly, this is time that could be productively spent elsewhere. These tips provide some basic guidance of steps you can take to help to reduce the risk of litigation arising.
This week, Jo-Anna Martin, from Kennedy’s Law, gives her advice on how to avoid the risk of litigation. ●● Do your homework
Knowing who it is you are going into business with is one of the easiest steps you can take to try to avoid a dispute arising. Once proceedings are under way, clients often learn of others who have encountered similar problems with the party in question.
By that stage, it is of course, too late.
Contacting people for references, conducting some credit checks, asking for a trial period or even informally ‘asking around’ are simple steps you can take before you commit yourself to doing business with someone you later wished you hadn’t. ●● Don’t overextend credit facilities
Ability of your customers to pay is crucial.
With one or two successful transactions with a new customer behind you, sometimes the original and carefully agreed credit facility can become more relaxed.
It may be appropriate in certain cases to seek further security such as the guarantee of the directors to ensure performance of the contract and/or payment.
●● Jo-Anna Martin