In Show 104 – Debt Recovery originally broadcast on Facebook Live on Wednesday 27 June 2018 we explore this interesting topic.
Download a copy of the workbook for this show here: 104 – Worksheet
Show Notes
Recovering debt is a big part of any business. If you let the money owed to you get too large it can be disastrous. Without paying clients you don’t have a business. Cash is king when running any business and if your cash flow is too low you risk shutting down. You need to have set-up an effective debt recovery framework early in your business. If you leave it too long you’re not going to be paid effectively. This becomes even more critical when you try to sell your business. If you don’t have a strong cash flow it will significantly reduce the price you can get for your business. We always recommend that you get paid up-front. But that isn’t always possible. That’s when debt collection becomes absolutely critical.
Every so often you will have a client that is a slow payer. They may not have the cash or there may be a dispute. A good invoicing process will significantly reduce the headaches involved in getting paid. You need to have good details about your clients before you offer them credit. Having one person to handle invoices separate from the account is best. The person will follow the process and not give them too much leeway.
Whenever you’re providing goods or services ahead of time you have to create an internal debt collections process. You should have a specific staff member tasked with carrying out the debt collection process. If you follow a regimented process delinquencies are going to decrease. That process should include the following steps:
- Send an invoice with the expected date of payment (usually 7 days)
- Then in the event of non-payment send a second email requesting payment
- If payment still has not been paid a phone call requesting payment should be made
As part of your team you should have someone tasked with dealing with unpaid invoices. That person should have some experience in the debt collection industry. You may want to consider outsourcing that work. They will likely be more effective and that is going to save you a lot of time in the long run. You should clearly describe your debt collection process in all the contracts you sign with your clients.
There is a clear set of debt collection guidelines that have been created by the government. The guidelines are quite broad. You may want to consider seeking the advice of a lawyer before crafting your policy. There are rules around contacting a debtor. You have to have a reasonable belief that the method you are using to contact the debtor is the correct one. It is illegal to make contact with a debtor under false pretenses. You can’t pretend your someone else. You have to be who you say you are. You also have to make contact at reasonable intervals. You can’t call them 15 times a day. These rules are in place to protect people from over-zealous debt collectors. The rules around debt collection are incredibly important. You don’t want to fall afoul of the ACCC.
Remember, getting your debt collection process in place early on is hugely important for the future success of your business!
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 103 – Defending Proceedings Brought against your Business originally broadcast on Facebook Live on Monday 25 June 2018 we explore this interesting topic.
Show Notes
Today on the show we’re going to talk about the six steps to follow when defending yourself in a court proceeding. Getting into legal fights can be expensive and you want to defend yourself in as efficient a manner as possible.
1. Don’t panic
Getting a summons is a scary thing. But you don’t have to overreact.
2. Get good advice
You need a team of advisers that you can contact when you get into trouble. Don’t wait to the last minutes. Make sure you get good advice.
3. Try and get the case dismissed
There is an option in court called a summary proceeding which can get the case response. If you can show that the case is totally ridiculous you might be able to get it thrown out.
4. Make a counter-claim
In most cases you have the ability to make a claim against the person coming after you. If they owe you money you can make a counter-claim. Both cases are then heard together.
5. Consider settling
You can settle the claim right up to the day of the trial. No one is going to be happy with a court judgement. Settling may be a better idea.
6. Paying the other sides costs
If you are unsuccessful in your claim you may have to pay the other sides court costs. Make sure you are on steady ground before you go to trial.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 102 – Using a Debt Collector with Angela McDonald originally broadcast on Facebook Live on Wednesday 20 June 2018.
You can download the workbook for todays episode here: 102 – Worksheet
Show Notes
Today on the show we’re going to continue our discussion about debt recovery. Trying to recover money that is owed to you can be one of the most frustrating aspects of business. We’ve invited Angela McDonald the managing director of Optimum Recoveries to join us on the show. Engaging a debt collection agency is your last, best option to get the money that you’re owed.
Angela always starts with her clients by insisting they implement really strong terms and conditions for their businesses. Those terms need to be secure without being scary. They don’t have to be onerous to be effective. Along with those terms you need to implement policies and procedures for debt collection. Hand in hand with those policies comes effective training for your employees. Having those procedures in place will help to mitigate the amount of debt that you incur. You want to prevent the debt from every occuring in the first place.
That said, every business is going to have clients who are slow on paying their bills. The goal is to ensure that you don’t rack up huge outstanding invoices. To that end you need to know who you are dealing with. Make sure the businesses you are engaging with a reputable and who do not have a bad reputation for stiffing contractors. If they have had failed businesses or court judgements in the past it doesn’t you won’t work with them. It just means you’ll work with them definitely. Visiting your clients place of work will show you’re interested in them. It will also allow you to get a sense of the health of their business.
When you have clients who are not being responsive to requests for payment you may want to consider a debt collection agent. They have the benefit of costing you money only if they are able to recover the debt. If they aren’t successful then you don’t pay a commission. This can be more cost-effective than having a staff member dealing with outstanding invoices.
The debt recovery process begins with a review of your terms and conditions. What tools have you given the debt collection agent? Next, the agent will review what process has been taken so far to recover the debt. Every client is different. An issue of demand is usually the first step. It sets out the amount owed along with the initial invoice and will include an expected payment debt. That is usually followed up with a phone call to try and get it paid within seven days. A face-to-face meeting may be arrange though those kinds of meetings are becoming more rare.
Before you engage a debt collector you can take some steps yourself. Emails and calls are always a good first step. But if that isn’t working don’t just keep beating your head against a wall. Do something else.
How do you make your first dollar?
Angela would hide in the bushes at the golf course and clean the balls that landed on the fairway and sell them back to the golfers. Her first real paying job was at K-Mart working at the customer service desk.
What book should every business owner read?
If you could give advice to you younger self what would it be?
Sit down and have a good chat with a career counsellor.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 101- 5 Steps in the Debt Recovery Process originally broadcast on Facebook Live on Monday 18 June 2018 where we explore this interesting topic.
Show Notes
Today on Fast Fix Monday we’re going to discuss the five steps of the debt collection process.
- Contact
You have to contact your overdue accounts. That should be a daily task. People don’t like chasing down others for money but once you get into a rhythm it will get a lot easier. - Written demand
If the contact process doesn’t work you should follow-up with a written demand. - Negotiate
Be willing to negotiate. They many have reasons about why they are not paying, Listen to their concerns and be prepared to reduce the liability. - Debt collection agency
These companies are quite effective at recovering your debt but they do cost money. - Legal action
You’ve sent letters of demand but you still haven’t been paid. Your final option is to go to court. This can cost a lot of money. You want to be sure that the money you are owed is worth the expense.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 100 – Not a Legal Clip Show originally broadcast on Facebook Live on Wednesday 13 Wednesday 2018 we explore this interesting topic.
Show Notes
We’re incredibly excited to have reached our 100th episode! We wanted to celebrate by offering an all-in-one recap of much of the information we’ve covered over the last ten months. We’ve had some incredible interviews with leaders in a variety of fields. We’re going to offer some clips from those interviews. And we’re going to play some clips from our favorite episode.
We start this episode with a clip from Episode 27 which dealt with business coaches. He or she should be part of your initial team in the first phase of your business. Doubtless, you are great at your chosen profession. But you don’t know what you don’t know. The biggest problem we see with our clients is that they think they know what’s going on when they don’t. Business is a lonely place and you need someone else to bounce your ideas off of. Mindset and clarity are a critical part of your future success a business coach can help provide that. The most important advice we can give is to make sure that both you and the business coach are on the same page. Take the advice you are given.
Next up we played a clip from an interview with Peter Docker. Peter is a speaker, teacher and author of the book Find Your Why: A practical guide for discovering purpose for you and your team. Peter says he exists to help people find the real purpose in their working lives so they can do extraordinary things. Peter says your why is not created, it’s discovered. That’s what makes it authentic and real. Discovering your own why is an act of leadership, Peter says. You have to be vulnerable and dig deep inside to help you discover your purpose. Once a leader establishes their why they need to turn to a group why. What is it that makes your organization different or unique? What’s the higher purpose? Being able to put that purpose into a single sentence makes it actionable. It will affect every part of the business. It will help you to hire people who believe what you believe and to actually stand for something.
Our next clip is from Episode 003. We were just getting on our feet and we talked about the fundamentals of creating a startup. Running a company as a sole trader can be very dangerous. We recommend that everyone structure their business as limited liability company. You may never encounter a problem but you want to ensure that if something does happen you want to protect yourself.
Back in Episode 043 we talked about the importance of debt recovery. Debt recovery can be one of the most frustrating aspects of running a business. It’s really important to get this right at the beginning of your business. When you start you want to collect any outstanding debts quickly and efficiently. Cash is king in business. If you can’t pay your own debts you are going to quickly find yourself out of business. Get your invoicing and credit policies figured out early so you will have a consistent flow of cash. Train your clients so they know when they are expected to pay. Invoicing consistently is a big part of that. It’s a good idea to use a third party to collect your debts. It frees up a lot of time for you. It also protects you from any uncomfortable interactions with your clients.
In Episode 089 we invited Natasha Hawker, the owner and director of Employee Matters to join us on the podcast. She is a senior HR practitioner, speaker, author and trainer. She is an expert in employee management, recruitment and mediation. She’s been published in the Sydney Morning Herald, The Age and The Australian Financial Review. She’s also the author of From Hire to Fire & Everything in Between. Natasha believes that small business is the backbone of the country and she’s driven to help them grow. We’ve worked with Natasha for several years and we’re excited to have her on the show.
In Episode 073 we interviewed Warwick Peters to join us. Warwick is an accredited business broker with Ray White Commercial. We’ve known Warwick for many years and are happy to have him back on the show. We previously had him on which focused on Phase 5: Protecting your intellectual property. Warwick helps businesses to discover where their profitability lies and how best to structure themselves prior to a sale. He helps to break down and analyze what problems exist in any given company and helps to fix them.
In Episode 051 we talked about shareholder agreements. Today on Fast Fix Monday we wanted to touch on shareholder agreements. These agreements often come into play during Phase 6: Maximizing your business and bringing on investors. Why do you need a shareholders agreement? They can provide legal security for your company and it helps to regulate future disputes. There are several “what if” scenarios this agreement will cover. Among them are:
What happens if the business owners leaves, dies or becomes chronically ill?
The owner of the business is usually the life-blood of the operation. If they become sick or incapacitated in some way that can cause major problems. There needs to be a transition plan in place which can include a buy-sell -option agreement. That is essentially an insurance policy that is put in place if the owner becomes sick or dies.
What happens if the founder starts another project similar to your business?
This is important because it protects the company from unfair competition from one of the people in the ownership group who may want to leave the company and enter a similar sector.
What happens if you need another partner?
If the business continues to expand you may need additional investment from another partner. Before that happens the details of how that will happen needs to be worked out with the current ownership group.
What if a partner isn’t putting in the time?
It’s possible that someone in the ownership group will become distracted by another job or interest and is no longer putting in the time and effort into the company. The responsibilities of everyone involved in the company need to be clearly spelled-out.
What happens if there are disagreements among shareholders?
Just like a marriage everyone gets along great at the start of a new business. That isn’t always where it ends up. A dispute management system needs to have been agreed upon by all parties long before the operation gets under way.
What happens if there is a deadlock after a vote?
This is especially important if there is a 50/50 ownership split. It’s possible that a major decision will end in a deadlock. You don’t want to wait until that happens before you decide on how to resolve that kind of dispute.
In Episode 063 we talked with Jason Cook. Jason works as a financial advisor with WB Financial in Queensland. He is also the author of the book Bulletproof Business. Jason feels strongly that people should invest with an end goal in mind. Investing in property or shares is not the end goal. It’s what those things will ultimately be able to provide in the future. That might be the ability to take a lengthy vacation every year or to provide financial stability for retirement. Not many people actually make that plan. It’s all about what the investment can do for you. Not what the thing actually is.
In Episode 084 we invited Hank de Jonge to join us. Hank is the co-founder of de Jonge Read a business consultancy focused on guiding business through insolvency. Hank has an extensive background both operating and buying businesses. He founded de Jonge Read in 2006 and has strived to help companies to navigate the complicated world of bankruptcy.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 099- Fast Fix Monday – How to Settle Early originally broadcast on Facebook Live on Monday 11 June 2018 where we explore this interesting topic.
Show Notes
Today on Fast Fix Monday we are going to discuss how to settle early. This is part of Phase 10: Litigation and Dispute Resolution. There are plenty of ways you can settle your disagreements before they get out of hand.
- Try and resolve the dispute before it escalates. Communication is best. If you are actively trying to resolve something it will be settled before it goes too far.
- Alternative dispute resolutions are an important way to avoid the courts. There are several different options and all of them are preferable to going to a trial.
- Be ready to compromise. You need to take into account that there are different ways to deal with these disputes.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 097- Phase 10 – Litigation and Dispute Resolution originally broadcast on Facebook Live on Wednesday 6 June 2018 .
Download a copy of the worksheet for this episode here: 097 Worksheet
Show Notes
We dig deeper into Phase 10: Litigation and Dispute Resolution today on Business Legal Lifecycle. This phase comes just before selling the business in the BLL. We wanted to put it here in order to acknowledge that disputes and lawsuits are just a normal part of business.
Commercial litigation can happen at any point in the your business. You want to try and avoid heading to court but sometimes you can’t. Less than 1% of business disputes will end up in court and less than 1% of those will end in a decision. It can be a long and drawn out process and can be incredibly expensive. Every state has different rules about when and how a suit can be brought. Different courts will deal with different matters. Your lawyer needs to ensure they are commencing an action in the right jurisdiction. Once the action has commenced you then need to serve the other party. Keeping your registered up to date with ASIC is critical. You don’t want important court documents going to the wrong address. The courts are quite busy and a complicated matter could take some time to be scheduled. You need to be well aware of the lengthy time frame and the costs involved before you set out on that path.
Debt collection is a key issue that many businesses face. We recommend that you follow a standardized process. First, you want to send an invoice detailing the charge. That should include a deadline for when the money needs to be paid. If payment has not been made you need to follow-up with a simple email. It should be a friendly reminder asking for payment to be made. After waiting another week you should follow-up with a telephone call asking why payment hasn’t been made. After that you should send a legal demand stating that if payment isn’t made you will be referring the debt to a collection agency. That invoice should then be referred to a debt collection agency. It’s important to retain a well regarded agency that can affect a positive outcome quickly.
Reviewing contracts is a process that few businesses undertake despite being incredibly important. Most people just continue to use their standard contracts without giving them another thought. Those contracts may not be working the way you want them too. You don’t have to review every single contract immediately. Instead, review those contracts that you feel haven’t been working well. Try and do it at least every two years. Your business is evolving and so should your contracts.
Alternative dispute resolution is a much better way to deal with disagreements. Going to court can be extremely expensive and stressful. Mediation is one of the alternatives. An independent third party is brought it to try and reach an agreement. There are other ways to deal with disputes instead of just the payment of money. A mediator can identify some other ways to fix the problem. There is no real mandated process for mediation. Generally, they are there to take the emotion out of the dispute and offer real solutions. A mediator will never take sides. They are there to point out the weaknesses in each sides case.
Conciliation is similar to mediation. The difference is that the person deciding the case will usually have a specialization in the thing being disputed. They will provide both legal and practical advice to both sides. They won’t make a judgement but they will try and guide both sides to a resolution. They won’t take sides.
Arbitration has the added function that the decisions are usually binding.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
In Show 096 – 5 Tips to Avoid Litigation originally broadcast on Facebook Live on Monday 4 June 2018 we explore this interesting topic.
Show Notes
It’s a new month and that means it’s time to start a new phase of the Business Legal Lifecycle. This month we will be talking about Phase 10: Litigation and Dispute Resolution. No matter how well you run you business you are going to have to deal with disputes and the courts at some point. Today, we wanted to offer five tips to avoid litigation.
1. Communication
Ignoring something in the hope that it will just go away is not the best strategy. Communicate with the other party and address what they are requesting in a straight-forward way.
2. Principle
One of the first things you learn in law school is that pursuing litigation over the principle of a matter only makes lawyers rich. Don’t pursue litigation over just the Principle.
3. Other point of view
There’s quite a few things to think about here. You’re buying the intellectual property of a franchisor and their systems and processes. You’re also going to be paying royalties over a set period of time. You need to speak with your accountant and financial planner to make sure you can afford it.
4. Put things in writing
It’s so crucial to put everything in writing. Especially anything that might turn into a dispute. A judge will very heavily favour the party that has commited important conversations to paper.
5. Reading the agreement
So often a misunderstanding between two parties hinges on the contract. Everyone needs to have read and understood what they have signed.
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.
