Up Front Business Practices

Up Front Business Practices
Monday, March 18th, 2013 Scott Bossart

                Consider how you conduct business with your vendors, suppliers, and customers.  Now consider the documentation which typically coincides with those business dealings.  Generally, when purchasing something from a supplier, the merchandise is fairly straight forward there is a certain known knowledge around its expected performance and quality ahead of your purchase, from which you can pre-determine what you are getting.  If in the end, the product from a supplier is not what you expected, you can typically make arrangements for corrections provided it is not of an unusual quantity or customized modification.  Now think of your vendor’s who are providing specific items or services of which are sunk once you receive the item or service they provide.  Resolution of disputes can become more difficult and will largely rotate on your past relationship and working arrangements.  As for your customers, if you have ever had any discrepancy in your service or product, you know how potentially difficult it can be to come to a resolution.  In any dealing between two organization’s, there can exist many unforeseen circumstances which potentially place both you, and those you deal with, in an issue resolution situation.

                You hear it all the time where a service provider dealing with the public takes money but delivers only a partial or subpar performance.  The same thing happens all the time in business as well.  If you are on the receiving end of poor performance, it certainly can add a level of stress on your organization which causes your customers to be affected as well.  It is impossible to identify everything that could possibly go wrong.  Also, typically, when something does go wrong with a well establish provider or customer, it is usually something which had not previously occurred and/or was not considered as a risk.  In these cases, the process for resolution becomes the important piece in saving any future working relationships.  Every incident should trigger two reactions; first and foremost, what needs to happen to rectify the current situation, and second, what needs to change internally to prevent future situation’s.  Inevitably, two actions will take place.  Process changes will be made to include checks and balances as well as better forecasting for those things that both directly and indirectly impact the process.  Secondly, the documentation where any signage is required from both the supplying organization and receiving organization will be updated and/or amended to identify the risk.  Larger companies and/or larger project agreements will require extra focus to ensure as many potential circumstances are identified…both good and bad.

                Documentation is the one piece of legal tender between two people or organization’s doing business.  You hear it all the time where the document is full of “Fine” print.  Typically no one takes time to read all the fine print before signing.  When large amounts of fine print are included, folks often wonder if either the supplier is trying to hide something or what they have might have been through to require the level of added detail.  This is not to say all fine print is bad, but it is to say if you are the originator of a document being signed, and it has fine print in it, it is in your best interest to explain its collective content, intent, and assure the customer there is nothing you are hiding.  Any scope of work must be spelled out thoroughly, clearly, and correctly so both you and your customer know the expectations.  If you have additional rules that may apply, it is imperative they are spelled out clearly on the document before any signatures go on.  If it is time based, all timing regarding payments, deliveries, bonus areas, constraints, etc. must be clearly defined and listed in chronological order.  It is almost impossible to list any and all potential risks or circumstances that could go wrong but it is not impossible for you to list all potential risks or circumstances fully in your control and your intention to resolve them.  However, larger companies or larger contractual dealings will require a certain level of added documented language to ensure ownership and expectations are defined.  The key thing to keep in mind is to NOT simply make up rules as you go along.

                The key to any business interactions between vendors, suppliers, and customers involves having a clear understanding of expectations pertaining to both ends of the deal.  The best policy is always to be up front and honest with your intentions.  It isn’t the fact that something went wrong, but how professional you were in dealing with the resolution and how equable that resolution was for both sides.  If you have to add generic statements in your documentation and put them in fine print in hopes they will go unnoticed prior to signature, you really should reconsider exactly the expectations you are presenting.  In general, for the small business owner working with small contractual arrangements, there is less of a need to have large amounts of the infamous “Fine” print.  Be up front with your clients, customers, suppliers, and vendors and you will find your business dealings being handled more smoothly.  I’m not a believer in the old adage of “The customer is always right” but if you cannot adequately defend your position in a signed document, and you are not willing to reach equity with the customer, legal action may be in order…whether prescribed by you or not.  Keep it honest, up front, and forth coming to those which your organization deals with and the risk for problems will be minimized.

O.M.E.M., LLC – Helping Businesses Improve

Stay Well

Scott B.


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