Owning a business is exciting at times, frustrating at others, but always demanding. There are so many decisions to make on a daily basis, and often, as a business owner, you not only have to make the decisions, but must also roll up your sleeves to make those decisions bear fruit. One decision you should make early as a business owner is determining who will be your trusted advisors to guide you through the legal and accounting issues your business will encounter. Selecting a professional to assist you with legal and accounting decisions is vital to launching and maintaining a viable enterprise, because decisions made early in the formation of a business can have far reaching consequences down the road.
In my practice, I often see clients who chose to handle matters without engaging attorneys and accountants early in the process, and later failed to recognize issues as they arose during the day-to-day operations of the business. Those decisions can cost business owners far more money down the road than hiring the appropriate professionals in the beginning, and can have a significant effect on the ultimate success or failure of the business. I have found those mistakes fall into seven basic categories. This is Pitfall number 7 of 7 common pitfalls I see businesses owners make.
Pitfall # 7 – Failure to Address Customer Relations
Written Contracts with Customers/Vendors — I cannot stress enough that the days of a handshake deal are gone. Businesses must have written purchase orders, invoices, contracts, leases and estimates to conduct business in today’s world. Moreover, having it in writing avoids the stress, confusion and misunderstandings between the business and the customer when it comes time to deliver the goods or services and get paid. Business owners should have a business attorney draft sound business forms for use by the company. The cost of doing so is just a fraction of what it costs to defend a lawsuit produced by shoddy forms downloaded from a free internet site.
Customer Service/Satisfaction — At the same time, “the customer is always right” has not gone out of style. There are so many options for customers in today’s marketplace. A savvy business owner will make sure the company’s employees are well groomed, pleasant, enjoying their job, able to address a customer’s issue, and make the buying experience a positive one the customer will repeat.
Monitor Internet/Social Media — From a reputational risk standpoint, the pervasive use of the internet and social media has created new challenges for business owners. Sites that offer customers the opportunity to evaluate a company’s performance or products should be monitored so any derogatory or unflattering information can be noted, addressed, and responded to, if appropriate. Word of mouth now has the potential to reach hundreds, if not thousands of potential customers.
Privacy Policy — Having a privacy policy is not just good business, it is legally required for any company that collects information about its customers. The law requires disclosures to customers about how the business uses the information it collects from them and whether it shares that information with affiliates or third parties. Customers have a legal right to know how a company uses its information, and the company is required to publically disclose its privacy policy.
Protect Customer Data — Cyber security should be a consideration for any company in today’s business environment. All businesses are at risk of being hacked and having customer, employee, and other sensitive data compromised. Businesses should consult with an information technology specialist that can recommend safeguards to put into place to provide maximum protection of customer data. In addition, businesses may want to consult with their insurance provider to see if their general liability policies cover cyber-attacks, and if not purchase separate cyber insurance to protect against the damage that can be done by a hacker.
About the Author
Ashley focuses her practice on Outside General Counsel Services and Business Bankruptcy and Creditor’s Rights Practice Areas. She is an effective, results-driven advocate for her clients. Her background of 30 years in business bankruptcies, distressed debt workouts, problem loan recovery, and real estate title and commercial litigation provides her with a solid foundation of general business, accounting and legal skills.