"Put it in writing!" You've heard it a hundred times. But as much as you may think it's an overused business term, the truth is that the practice of actually putting things in writing is not. We all know that every important agreement and arrangement should be put on paper, but too often we get complacent, or even too embarrassed to ask for it.
Whenever we're dealing with important business decisions, dividing responsibilities or working in any way with money or assets, nothing could be more critical than ensuring the terms are on paper. While it may be hard right now to think of anything affecting your most precious relationships, think again: Some of the worst situations occur when family, friends or people we know really well are involved in our projects.
No matter how close you may be to such people, introducing this kind of formality into a relationship is always difficult. You have to level with yourself, however, and ask some tough questions: How much are you willing to gamble with your future at stake? How much are you willing to lose?
No one ever expects things to get ugly, as we all start out with the rosiest of expectations. Unfortunately, relationships can turn sour, and often do. Sometimes people enter into an agreement with very different expectations, and having your agreements and understandings in writing helps to avoid the emotional and personal dynamics that come into play when things aren't so wonderful. If you take care of the specifics beforehand, those difficult emotions will not interfere with the decisions about what must be done to resolve the situation when and if it comes to pass. (Or as some business lawyers say, "Plan the divorce before the marriage.")
Thankfully, the solution is simple: Just put it all in writing. Any time you work with other people or companies, make sure that your agreement is outlined somewhere. (It's a good idea for both of you to sign it as well.) Whether your agreement is on a napkin or drafted by a lawyer, it can be legally binding. Even an e-mail can serve as written proof should you run into difficulties. Be fair to yourself -- and the future of your business - by nailing down the details.
How to keep legal agreements simple, low cost, or even free:
o Keep a personal record of all significant conversations and meetings for later reference. This can be used to recall significant events, casual agreements, commitments, and even to settle disputes.
o Discuss the details of any deals (if possible) with the party you are entering into the agreement with. Write out the terms and issues that you are most concerned about and why, and take it to a lawyer you trust. This will help them better understand your needs and substantially cut down on your drafting costs.
o Get a sample contract from a book of forms, a stationery supply store, or a small business software program and use it as guide to create your own. There are also some great books available on the subject.
o Visit a SCORE (Service Core Of Retired Executives) or SBA (Small Business Administration office) near you. One of the counselors should be able to guide you through the process or introduce you to someone who can.
o Find a law student or lawyer friend to help you. At very least, you may be able to get a good referral and maybe even a decent deal.
