One of the first steps in creating a company and getting all of the business ideas in place is to have your written business plan and to have any agreements or partnerships put into a written document.
A known fact is that people only hear 20% of what is said, so in daily life there are misunderstandings. Most can be dealt with easily, but sometimes misunderstandings can be critical in a business.
An example was in my own business. I brought a partner in promising a small percentage of the business based on performance. A written document was never in place just a verbal conversation. This employee was caught embezzling money from the company and we fired him. The employee went to a labor lawyer and the case went to court and we were forced to give him what we promised. A written document would have kept this case out of court and would have saved us thousands of dollars in legal fees.
The critical aspect of any business relationship is to get everything in writing. Agreements are needed for employees, partners, services, purchases and sales.
Most business disputes arise because there was no written agreement or contract. Always have open clear communication with a follow up written agreement so that there are no questions and if there are they can be addressed.
Unfortunately, we learn from mistakes we have made and to share this one simple mistake can save you and your business thousands of dollars and save a lot of aggravation and stress in the future.
Please share stories of how a written contract has saved you money in your business.
Thanks to the Wall Street Journal’s online site wsj.com, Entrepreneur.com and Kiplinger.com for bringing such current and valuable tax information to the Web. Find six favorite resources below:
1.Tax Center: New to Small Business
Get a start here. Learn about taxes.
2. Smart Year-End Tax Moves
Own a business? This link will help you make those December tax decisions and act now.
3. Tax Filing for Freelancers
Are you a freelancer? If so, plan ahead for taxes and prepare to pay what you owe on Schedule C.
4. Most Overlooked Tax Deductions
Tax deductions you don’t want to miss. Tax deductions for 2008.
5. Deducting Charitable Gifts
Charitable giving is a wonderful way to support the community and causes you believe in. Plus, there is a tax deduction benefit. By the way, SCORE is a charitable organization. If you would like you can donate to SCORE. Learn about documenting a charitable donation deduction.