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Summer bodies made in the winter.

Posted on 13th August, 2018

The old adage “summer bodies are made in the winter” indicates a certain amount of pre-thought and groundwork. This week’s blog isn’t about getting a summer body, it’s actually about preparation. We’re all familiar with the saying “fail to prepare, prepare to fail” and within the legal setting (as well as the summer body context and that bikini!), failure can have dire consequences- especially on fledgling businesses.  And this is the real topic of this week’s blog – legally preparing your business now rather than waiting until it’s too late.

Recent statistics provided by the Office for National Statistics, suggest only 44.1% of start-ups survive beyond five years. Whilst there will be many factors (including industry specific factors) owing to these high failure rates, a reoccurring theme is that start-up businesses within the UK don’t place a lot of emphasis on, or put into place any form of legal preparation, to assist in the running of the business.

According to some studies, up to 90% of small businesses fail due to cash flow issues. A properly drafted set of terms and conditions can help with stipulating payment terms, the application of interest on late payments and securing payment of debts or performance of some other obligation. Such terms can keep the cash of the business flowing in the right direction; it can reduce the need for appointing debt collectors (and incurring more cost for the business) and can circumvent having an uncontrollable Bad Debt ledger. Having in place a legal basis for all trading relationships also sets out a professional and conscientious image of the business to others.

Legal preparations for most can seem daunting or costly to implement, but that need not be the case. A set of terms and conditions or a written agreement, can be as simple and as straightforward as the business requires. Having a written statement of the relationship between the business and its key supplier can make all the difference, especially in times of dispute! And that is what a contract is – a legal statement of the relationship between the parties. A contract or sets of terms doesn’t need to be written in “ye olde English” or consist of purely Latin legal terms either.

And just as the proverb suggests “an ounce of prevention is worth a pound of cure” – it is much easier to put legal preparations in place than looking to rectify the damage once it has occurred.

For more information please contact Charlotte Alexander, Jacksons’ Corporate and Commercial calexander@jacksons-law.com or telephone 01642 356 500.

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