7 Tips For Covering Your Ass In Business

September 4, 2008

I’ve learned from experience and mistakes that many business problems can be prevented by covering your ass to begin with. Here’s 7 ways to do this:

1. Get everything in writing - absolutely everything. Don’t forget about a single thing and never rely on the other company involved to do it. Put what they’ve agreed in writing yourself and ask them to send confirmation.

2. Never sign a serious contract without having a solicitor or expert look at it. If you’re dealing with a company who is trustworthy, they will actually ask you to get a solicitor to look at it. Be wary of a company who advises you not to bother using a solicitor.

Don’t offer credit without running a proper check.
Put any quotes etc in writing, before you begin any work. And if someone doesn’t have credit, make sure they’re going to pay you at the end of the job.

Tell them this is required, before you even begin and ask them whether they intend to pay by cash, cheque or card. This avoids any excuses when you’re done - and believe me, plenty of folk will try to make them - eg. lost cheque book etc.

Also, don’t forget to keep an eye on your own credit score. Getting credit in the current economic climate is hard enough to start with. So you don’t want errors, or identity theft screwing things up to you when you need to buy, or lease important equipment for your business. You can get a free credit report here, in a few minutes

4. Know where you stand re: employment laws etc. And make sure you have somewhere you can turn to for advice when you’re unsure. You don’t necessarily have to fork out legal fees. Signing up to a legal advisory service can be more cost effective and many offer 24 hour advice. But ignore the opinions of well meaning friends on these issues. People will often advise you to do what is fair, but fair doesn’t always equal legal.

5. Make Sure You’re Insured
for anything that could go wrong, including theft or damage to expensive equipment. Don’t scrimp on insurance - not having it could ruin your business. I never thought I’d make a claim but I had equipment worth thousands stolen, a couple of years ago. You can get a free customised business insurance quote, at low rates here.

6. Plan Ahead For Potential Problems. Make written plans on what you’ll do if disaster strikes. Your business may never suffer fire or flood damage, all your staff going down with flu, you winding up in hospital etc etc. But if you think of all the things that could go wrong and write down how you’d deal with them, it will be easier to cope if they do happen.

7. Never Over Promise. Don’t put yourself in a difficult situation by promising more than you may realistically be able to deliver. Your customers will love you more if you promise less and either deliver it, or do better.

Is it too early to think about covering you ass, because you still haven’t managed to come up with a good business idea? Then the Business Discovery Group might be just what you need. Click here to learn more about using the Business Discovery Group, to come up with a profitable business idea.

Can you think of any potential pitfalls in business, or offer any ass covering advice? Or do you have any questions?

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37 Responses to “7 Tips For Covering Your Ass In Business”

  1. Vered - MomGrind on September 4th, 2008 3:28 am

    I would add that even if it’s a very small business, it’s better to operate as a corporation or as a limited liability partnership.

    If you operate as a sole proprietor, your business is not legally separated from you, so the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply.

    Vered - MomGrind’s last blog post..How To Lose 100 Subscribers in 4 Days

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  3. Barbara Swafford on September 4th, 2008 6:55 am

    Hi Catherine,

    I agree, getting everything in writing is VERY important. Also, check with all areas of government. Often we have state rules and regulations, plus more for the county and/or city. One missed permit or important license, can quickly cut into your profits.

    Barbara Swafford’s last blog post..Removing The Blinders And Growing

  4. Tara on September 4th, 2008 9:22 am

    Great advice. I have a good friend who is on the verge of setting up her own business (she’s a very talented photographer) and she needs all the advice she can get. Will defo pass this on.

  5. Mark Dykeman on September 4th, 2008 11:10 am

    8. Assume nothing. This is very hard to do because of the amount of time that it would take to validate every single assumption we have. Nonetheless, it’s healthy to check assumptions every now and then. I say that as an IT professional with 17 years experience and a lot of that working on projects.

    Mark Dykeman’s last blog post..Social media magicians give away their best tricks

  6. Betsy on September 4th, 2008 11:43 am

    Hi Cath,
    I’m a regular reader but saw you on the Remarkablogger roundup post and decided to comment. So, it works!

    All good suggestions. After 30+ years in business endeavors, I’d suggest the distilled wisdom of Ronald Reagan: “Trust, but verify.”

  7. John Hoff - eVentureBiz on September 4th, 2008 12:16 pm

    #1 hit me hard once. I missed that one. To add to that one, remember you can write on contracts. Flip it over and add your terms and also don’t forget you can cross out.

    A contract is a contract, even if it’s all marked up. Get what you want, don’t get screwed.

  8. Wendi Kelly-Life's Little Inspirations on September 4th, 2008 3:45 pm

    Get everything in writing and I would add ask for references and actually interview and check up on them if at all possible. A person can say anything they want about their services. It is good to know how their past clients feel about them.

    Wendi Kelly-Life’s Little Inspirations’s last blog post..Changing Colors

  9. Evelyn Lim on September 4th, 2008 3:48 pm

    I like tip #2. My husband runs his own consultancy business and feels that lawyer fees is something that we should never save on. It is always a good idea to get all contractual agreements reviewed by the experts. You’d never know what can happen with something that is overlooked.

    Evelyn Lim’s last blog post..An Enchanting Vision From My Angels

  10. cathlawson on September 4th, 2008 3:57 pm

    Hi Vered - that is a good point. I have operated as both & it’s far better if you are a corporation or limited liability, as you can safeguard your personal possessions if anything goes wrong.

    Hi Barbara - that is a good point. There’s so many rules and regulations and people need to check out what they are. I know that here, we even have to pay a yearly charge just to carry disposable good from people’s houses.

    Hi Tara - thanks. I hope it helps her out a bit.

    Hi Mark - that is so true. It’s easy to second guess things and wind up in the crap - far better to validate things.

    Hi Betsy - thanks for dropping by. I love Remarkablogger site. You echo what Mark said and it’s a really good point. It’s always easy to guess, based on what seems fair and right but often that isn’t enough.

    Hi John - I’m glad you’ve mentioned that. As someone who has tried to get things changed in contracts and failed that is really good info. What good is a contract if both parties don’t agree.

    Incidentally, I was forced to sign a contract under pressure without a lawyer and I have been told that the contract won’t stand up in court due to the circumstances which I signed it under.

    But, it’s best not to take that risk.

  11. cathlawson on September 4th, 2008 7:10 pm

    Hi Wendi - That’s a brilliant idea - asking to speak to other satisfied customers is a great idea - especially if you’re investing lots of money.

    Hi Evelyn - that is so true. Contracts can get complicated can’t they? And some of the wording can be misleading.

  12. Graham Strong on September 4th, 2008 8:56 pm

    Hi Cath,

    To expand on Point #1 - if I have a phone meeting or discussion about a project, I jot down the highlights of these points in an email and send it off to the client. This ensures that any verbal changes to the “written” plan is documented.

    (Not to mention, it also helps reinforce it in my own mind, and gives me a place to reference the changes should I forget myself…!)


    Graham Strong’s last blog post..Find and Replace - Update!

  13. cathlawson on September 4th, 2008 11:46 pm

    Hi Rita - Thanks. The drug testing is important. I didn’t realise how many people were actually taking drugs until you and Barbara mentioned it.

    Hi Graham - That’s a really good idea. And by emailing the notes, it means you both have a copy.

  14. Links: 2008-09-05 | Meryl.net on September 5th, 2008 12:39 pm

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  15. Louise on September 5th, 2008 10:17 pm

    Yes, get everything in writing, especially any web development. Without a clear agreement, the developer owns the design, etc., not you, even though you paid for it.

    Louise’s last blog post..Cold Crawfish Dip Great Appetizer Recipe

  16. Al at 7P on September 5th, 2008 10:24 pm

    #7 (overpromising) is a common mistake with new businesses. In the zeal of winning a proposal, winning it can sometimes hurt the business more than help it if the proposal over-promised the deliverables. It can be a painful lesson to learn!

    Al at 7P’s last blog post..What’s More Important: Who You Are or What You Do?

  17. cathlawson on September 6th, 2008 2:33 am

    Hi Louise - now that is scary. I wasn’t aware of that and I can see how it could cause potential problems.

    Hi Al - I can imagine a lot of new business would do that. I guess it’s difficult to turn something down when you’re hungry for work. But it’s so dangerous if you can’t deliver what you promise isn’t it?

  18. Jake on September 6th, 2008 8:02 pm

    Consider investing in a phone system that records telephone conversations. I have literally saved weeks and thousands of pounds in legal fees by heading of spurious legal claims by producing recorded phone conversations of what was discussed and agreed.

    Also, if you find yourself investing in a large item, e.g. bespoke software, record the conversation with the sales rep. It’s amazing how free of hype their sales pitch becomes when they know they are being recorded.

    Finally, backup religiously - it’s no use having all this documentation only to lose it. I suggest investing in an “offsite” automated backup system.

  19. cathlawson on September 6th, 2008 9:15 pm

    Hi Jake - Thanks for dropping by. Those are excellent points. I’m guessing you would have to tell folk you were recording their conversation right? But it would be worth it.

    And I would love to hear what a salesman would come out with when he knew he was actually being recorded.

    I totally suck at backing up it’s something I need to improve on. And I do agree that any backups should be done offsite. If you have a break-in or fire, onsite back ups could be completely worthless.

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  21. voip on September 8th, 2008 12:58 pm

    Not something I care to do, but the paranoid business people I’ve seen all seem to share this one habit:

    Archive and save every email you’ve ever sent or received…so that at some point in the future, you can “prove” it wasn’t your fault.

    Personally, I’d rather live a little more on the edge and try and enjoy life.

    voip’s last blog post..Don’t Call 411 for directory information..make your bill lower !

  22. anisha on September 11th, 2008 1:51 pm

    the poin about working as a corporation or a limited liability unit makes very good sense. thanks for the light!

    anisha’s last blog post..Wine vinegars of India

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  24. cathlawson on September 12th, 2008 12:31 pm

    Hi Voip - A lot of folk do that. Mind you - there’s a few times when I’ve regretted not saving them.

    Hi Anisha - It’s a good way of protecting yourself but it’s best to check with an accountant too. In the UK, you can wind up paying more tax in the early years of a limited company, if your sales aren’t very high. But it certainly protects you on a personal level.

  25. Johnny on September 12th, 2008 1:07 pm

    Well all business do that, but running an honest
    business is best, because like some folks they too have bad credit and lie a lot so as a consumer its always good to check with the BBB before you sign a contract and before you sign a contract you should have a lawyer explain it to you before you sign it. Example satellite TV, your contract renews after 1 year so to disconnect at any time you still have to pay to cancel about $480.00, hidden charges so CONSUMER BEWARE.

  26. cathlawson on September 14th, 2008 9:16 am

    Hi Johnny - all businesses do what? I’m betting that not all business follow those 7 tips. That’s why I wrote them.

    The BBB is a great resource for folks dealing with American businesses isn’t it?

    I to have had bad experiences with satellite tv companies. TV companies and cell phone companies have probably been the worst I’ve dealt with, on the whole - aside from foreign insurances companies.

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  28. Dr. Nicole Sundene on September 24th, 2008 10:50 pm

    Thanks for these tips Cath! A friend of mine had his business ideas stolen by a friend he tried to collaborate with and because they had written a few things together on a cocktail napkin he was able to sue the traitor for stealing his ideas. Who knew that cocktail napkins hold up in court?

    Dr. Nicole Sundene’s last blog post..Zen Please? 20 Things to do on Your Day Off

  29. cathlawson on September 24th, 2008 11:00 pm
    Hi Dr Nicole - You’re welcome. That is amazing that he was able to do that. He must have had a really well thought out plan. Good for him getting his own bag.

    Thank you very much for the Digg by the way.

  30. goforsale on October 1st, 2008 10:33 am

    I can add one more, use CPFR (collobrative planning, forecasting and replenishment) in your supply chain, it can seem hard for small biz but you must start from a point. I have started to implement somehow. I do not know if the result will be success but will see in next 6 months.

    Small businesses can not handle every problem and need some help from partners..

    goforsale’s last blog post..Bilgisayar Bilmeyen Kalmayacak - Microsoft ve YG 21 Parlementosu

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  34. EasyProfitPack on November 4th, 2008 11:20 am

    Thanks for these tips, me and my friends are in the process of getting out to the big field and these advices surely help.

    We need to be more cautious I guess.

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  36. wilhb81 on November 15th, 2008 10:35 am

    I tend to share your opinion here, Cath. I’m always make sure that all the works should be done in black and white, as I don’t want any troubles to be happened due to the misunderstood in the future!

    Furthermore, we should keep all the bills and invoices in a safety place, so that we can keep tracking with the previous deals that we’ve been conducted with our clients. This to prevent the clients have the chances to argue/deny about the deals…

    wilhb81’s last blog post..Business one-liners 30

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