Steps to Managment Success – Step 124: Get It in Writing

Written By Rick Frishman Published April 15th, 2010

STEP ONE HUNDRED TWENTY-FOUR

Get It in Writing

In the immortal words of Ronald Reagan, “Trust, but verify” (referring to arms control with the old Soviet Union). That is, it is fine to expect the best, but you must plan for the worst. It is all well and good to do business on a handshake, but the savvy business professional knows that more is needed. The less left to misinterpretation, misunderstanding, differing perspectives, and unexpected contingencies, the better.

WHAT IT MEANS: First of all, it means that no matter how well you know your business associates, no matter how much you all trust one another, you have to get all important agreements in writing. The fact is, memories fade over time, people remember things differently, and people choose to remember things differently, so the only way to avoid misunderstandings is to record any and all agreements in writing. If you’re an independent contractor, don’t begin any job until you have written authorization. Doing so is smart business and no one should be surprised or offended if you insist that your agreement be in writing after all, it protects the other side as much as it protects you.

A few years ago, a friend of mine started a business that looked like a goldmine almost from Day One. She soon brought in a few partners (and their money) and business continued to grow. So far, so good . . . until it wasn’t. Sales hit a brick wall, tempers flared, and soon the partners’ investments were all at considerable risk. It became a legal and emotional ordeal, and although it all eventually ended well, the experience was a hard but valuable lesson for my friend—namely, that even the best of business plans and the friendliest partnerships can tank. And on that sad day, you’ll be a little less miserable if you remember to follow this rule. Lawyers notwithstanding, promises, words, and handshakes are simply not as binding as written contracts.

ACTION PLAN: Make sure to routinely use contracts and purchase orders to back up your company’s promises to perform or to secure the goods and/or services of others. Write down your employee policies—and make sure that they are communicated and understood. Unless you’re a lawyer, don’t write your own contracts. Either use a real lawyer or get templates of frequently used business agreements from the Net or one of your business associates.

EVEN BETTER: Having a signed contract is one thing; knowing where to find it is another. Make sure that all of your contracts, including invoices and purchase orders, are easily accessible. For extra security, keep backup copies of your most critical contracts at a remote location.

(Excerpted from: 10 Clowns Don’t Make a Circus. . . and 249 Other Critical Management Success Strategies by Steven Schragis and Rick Frishman)


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