January can be a pretty tough month for trading after the hump of Christmas – unless you happen to be a fitness coach or selling diet supplements…so as well as reviewing your marketing plans, use the time to make sure you have all your business arrangements properly documented. In my experience more cash is lost because of unclear and undocumented business arrangements than any other reason.
What kind of things should you be thinking of? Well are you in business with a friend with no written agreement? Do you not have a shareholder agreement? Do you have terms of trade with your customers? Any “employees” or freelancers without contracts? Are you doing work without a written agreement/specification eg building a website without clear payment milestones. Have you borrowed money from a family friend? All these need documenting
What’s the best way of doing the documentation – just do it! An exchange of emails is better than nothing. Obviously important agreements require a lawyer (typical cost £750-900 per agreement) – but the next best is a DIY approach using online templates for example from www.simplydocs.co.uk .