There’s a difference between commercial law and what I do. The reason I say there’s a difference between commercial law and startup business law and advocacy is because the needs are different. I work exclusively with solopreneurs and startups. The reason I do this because in the first 5 years of business your needs are actually different.
In the early days of starting your business, it’s just usually the one person in the business, so it’s really important to be aware of your self-advocacy skills, as well as the legal requirements of setting up your business.
What happens is, when you’re going through programmes like NEIS (New Enterprise Incentive Scheme) – and startup entrepreneurs go through a lot of different types of programmes and online courses and education, to get started in their business – so much emphasis is placed on marketing, and getting social media skills, developing your target market, honing down your service, niche-ing, etcetera. Not a lot of attention is directed towards advocacy skills in your business, and that’s where the legal aspect of things come in.
At startup, the advocacy aspects of your business that you’re looking at are:
- to get business terms and conditions in place,
- to have appropriate documentation in place for your website,
- it’s to get your business structure sorted so that it’s reflecting your actual financial situation and provides a window for growth at different phases,
- to be able to advocate for your business with different providers and different clients and different people that can help you, like banks and financial institutions.
It’s about the ability to be able to speak up for yourself and to speak up for your business.
It’s always a good idea at the startup stage to have a conversation with professionals that are going to support your business. That would be someone like myself, in the legal profession, who works with startups and solopreneurs. That would be your bookkeeper or your finance person, and that would be your marketing contact.
Legals, finance and marketing are the pillars of your business, so it’s good to have the conversations.
They may not necessarily intervene or create something for you on day one of your business, but certainly 6-12 months down the track you probably will need their services.
When Does a Start-up Need To Think About Business Terms and Conditions or Client Agreements?
Typically, in the big wide scary world, one would say, “Oh, you should have them straight up on day one.” I actually don’t subscribe to that at all. I think that there are some things you can do to cover yourself, like keeping a very good trail of email communications.
You really need to have seen a few clients and tested out your business processes before you develop a decent set of business terms and conditions for your business that means something in terms of consumer law, that means something to you and to your client.
I wouldn’t be panicking on day one about not having business terms and conditions, but once you:
- start seeing clients for money or even for testimonials or bartering,
- are selling your products for money,
- have actually gone through at least five transactions,
- have seen how things are panning out with your customers…
Then there’s a couple of things that you need to bring to the table to get your business terms and conditions underway.
1. Understand Consumer Law
First, you need to check your understanding of consumer law. You need to check that your business is structured properly, and you need to understand that what you’re doing is communicated clearly to the client, so the client understands what they’re getting into when they’re engaging you or purchasing from you. That’s the time to start looking at developing terms and conditions so that people are able to understand what you do, how you do it, and they also understand that if something goes wrong, there’s business terms and conditions to fall back on, as a platform of negotiation.
2. Copying your legals from another source
Now, I know a number of small business owners who copied their terms and conditions from other sources and adapted it to their local conditions and jurisdiction. Well that’s fine, if you’re comfortable doing that but it is in no way best practice. You are also placing a lot of assumptions that the copied terms and conditions comply with consumer law and the law in your jurisdiction, and that they apply wholly to your business operations and policies. Some people are comfortable with that level of risk, some people are not.
If your business is complex, and you have a limited understanding of consumer law, or that you’re just feeling that you do need support, then you do need to speak to a professional about it. Drafting terms and conditions that speak in the voice of your business, represent your business, purpose and mission, and that are branded in a way that suits your business, is quite an art.
Copying your legal policies from somewhere else is all well and good, but just remember that the best document is the one that has the soul of your business and not the soul of someone else’s.
3. Create clear expectations & policies
The most common area where small businesses get into trouble with clients is when their policies are not clear or documented. The majority of issues are around refund and cancellation policies.
I see a lot of issues that come across my table because refund policies have not been made clear to the client. Clients come to me because they’re unhappy with the service provider, usually because delivery hasn’t occurred at the time agreed to. Usually these things happen in the absence of a written document or something that has been given to the client in writing with some thought.
It’s one thing to give a client terms and conditions, but they have to be written in a way that they understand it. That’s the other big complaint that I get, is that, “I did get terms and conditions but it was so convoluted and so complicated that I didn’t understand it.”
As the consumer you have every right to go back to the service provider and say, “Look, can you give me a simpler version; one that’s written about your business?”
That’s where the point of difference is. Having a good document crafted for your business, that talks about exactly how you do business and what your expectations and processes are, is the best type of document for you and your client.
NO, business legals do not have to be presented in tiny font.
YES they can be written in very simple English.
Business terms and conditions need to be:
- tailored specifically for the type of work you do or the service you provide,
- written for the level of understanding or interaction your client is prepared to have,
- not too complex, convoluted, or too long.
4. Educate your customers
The biggest mistake small business owners have is that they have insufficient tools or resources to educate their customers about how they do business. They’ve got a truckload of marketing, but they have very little documentation that actually state the boundaries and the expectations of having a commercial arrangement or a transactional arrangement with the other party.
A lot of this can be mitigated and avoided by communicating well with your client about how you’re doing business.
5. Let go of fear
The biggest mistake many small business owners, freelancers and start-ups make is that they don’t get over their fear of handing over business terms and conditions or client agreement.
They think, “Oh my god, if I give them my business terms and conditions, if I give them my client agreement, it’s going to be a deal breaker. They’re just going to run away.”
Actually that’s not your client’s perception. That’s a good time to look at what you’re giving them. Because if you’re feeling uncomfortable about your client agreement, it’s probably not written for you. It’s probably not well written. You’re probably uncomfortable because it’s speaking about somebody else’s business, and that you’ve just transposed your own stuff onto it.
You feel uncomfortable maybe because your own business processes haven’t been tried and tested. You’re not feeling strong about your own business and you need to look at your mindset around it. Because if you are proud of your document, if you stand by it, then you must feel that it’s something that if you hand it to somebody, you do it with confidence, because it is your business that you’re protecting.
I have a ‘working with me’ terms and conditions. It states really clearly:
- what I do
- that I work from home
- that I don’t work on weekends
- my turnaround time is xyz
My terms and conditions couldn’t be ripped off from somewhere else, because they’re mine, that’s how I work.
That’s the critical factor in being a solopreneur; owning your business, crafting your business, designing your business. All that needs to be reflected in your legal documentation, and be legally compliant as well.
If you would like to talk to me about your business structure and legals, book a time to talk them over with me. You will set yourself in the right direction.
Lawyer, Contract Specialist, Speaker & Advocate for Women in Business.
Drawing on more than 15 years’ experience as a lawyer and a woman in business, Shalini Nandan-Singh helps Australian service-based entrepreneurs protect their businesses and their bottom lines with empowered legal advice and contracts.
Encouraging listeners to #loveyourlegals, Shalini firmly believes that business legals should be an authentic extension of your business. Her goal is to educate audiences that, rather than confusing legalese, business legals should be an authentic extension of your business, creating positive business boundaries that support you in working with your clients with compassion and understanding.
Disclaimer: This blog is written to support business owners to consider legal requirements and issues that may arise in business. The information provided is for general and educational purposes only. It is not intended as legal advice for your individual circumstances. Please consult your lawyer for advice specific to you and your business.