Sh*t happens in business. Sometimes it’s unforeseen, sometimes you just have it coming. Internally made mistakes are perhaps less forgivable than those things that happen due to external forces, but both can create devastating results.
In either case, don’t take the ?whenever there’s blame there’s a claim” approach. I have found out to my substantial cost that a much better approach is needed. In the first instance, let’s park the blame and sort a resolution and a solution.
Mitigation and remediation is always my preferred route – psychologically, financially and for speed alone. We can often overlook the small print when endeavouring to start a transaction in its early stages, but it is the niceties in the terms and conditions that might ultimately give you the leverage you need to resolve an unforeseen issue.
Payment terms about reasons and dispute management may be less exciting on day one of a professional relationship than price agreement and outcomes, but in the face of a hurdle it’s time to step back and take stock of the situation. Everyone involved needs to feel comfortable with how matters will be dealt with should something not go to plan. It’s key to make sure you are prepared from the very start.
Not many people getting married think about the implications of a divorce, and fewer still put a prenuptial in place. In any case, such a document in the UK is not binding (though it may be persuasive in certain cases). But in the end, negotiating such an agreement is time well spent for both sides. It’s not that much different in business.
As a sales and customer satisfaction driven individual, I have spent my professional life concentrating on achieving desirable pre-agreed outcomes. Luckily for me, the details behind how to deal with issues if things don’t go to plan are much less galvanising in a regulated industry that requires to work under pre-agreed terms. The process may be boring; but it’s practically inevitable. It has certainly protected my business and kept disputes to a minimum.
Check, check and check again the robustness of your terms and conditions. Always keep them up-to-date and never engage with anyone before you are clear how to handle the potential hurdles along the way.
Jo Haigh is head of FDS corporate finance services and the author of “The Financial Times Guide to Finance for Non Financial Managers“.