How
to Protect Yourself & Your Business
By Vishal P. Rao
As a business owner, you
already know how important it is for your customers
to feel safe about doing business with you. After
all, if a customer even suspects he may not receive
everything he was promised, then chances are he's
taking his business elsewhere. So to prevent that
you offer guarantees, secure payment methods,
prompt customer service, and more. You do whatever
it takes to show each customer that you are sincere
and trustworthy.
But what steps do you take
to protect yourself and your livelihood?
Too many business owners
spend all their time worrying about their customers'
security without thinking of their own, even though
small companies must often deal with customer
fraud, non-paying clients, and more.
Just as you've taken steps
to ensure that your customers are satisfied with
their buying experience, so should you feel comfortable
and secure by taking a few precautions of your
own.
1. Get Everything in Writing
Written contracts are not
just for helping customers understand what they
can expect to receive for their money, they are
about laying down the ground rules for your business
relationship. When these guidelines are in writing,
nothing is left up for a debate or becomes a misunderstanding.
Both parties can be assured
that their interests are being protected and both
should have a clear understanding of their rights
and responsibilities in the event that something
goes awry.
A good example would be
if you sold a toy which a parent returned six
months later because it was broken. Without a
contract in writing specifying the time limits
and conditions of your return policy, you might
end up with an ongoing battle wit the customer
which could result in lost business and even lawsuits.
Written contracts also don't
need to be crafted by lawyers. You can write everything
out yourself in ordinary, easy to understand language.
When you and the customer sign it, it becomes
a legal and binding agreement. It's really that
simple.
2. Don't Be Naive
So many people in business
get burned by their customers simply because they
are too trusting. For example, some of you may
have shipped products before the customers' payments
cleared. Or you may have completed agreed upon
work without asking for a deposit. Both are risky
propositions as many new entrepreneurs discover
the hard way, especially if they do business online.
You can protect yourself
by always asking for a partial payment in advance
and by always waiting until a customer's payment
has cleared before you ship their products. Another
method of protecting yourself and your customer
is by using a service such as Paypal.com to handle
your transactions. The service protects you from
non-paying customers and offers your customers
protection for lost, damaged, or unshipped products.
3. Know Your Local Laws
One of the best ways to
protect yourself is by becoming informed. When
you know your legal rights, you'll have a better
understanding of how to effectively deal with
troublesome customers.
For example, some states
don't allow you to limit a customer's right to
return a product beyond a certain time limit,
so you may not legally be able to enforce a guarantee
of only one week. On the other hand, if you know
your rights, then you'll also understand what
steps to take in case legal action on your part
is necessary.
For instance, you may want
to send a certified letter demanding payment before
you file a lawsuit. Additionally, if you appear
knowledgeable about your rights, many customers
might think twice before failing to pay or committing
fraud.
The bottom line is that
you deserve to be protected just as much as your
customers. A few advance precautions now can ensure
that you'll have a long and satisfying business
relationship with your customers.
Vishal
P. Rao is the editor of Home Based
Business Opportunities
A website dedicated to opportunities, ideas and resources for
starting a home based business. He also runs the Work at Home
Forum - an online community of folks who work at home.
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