My Experience: A Cautionary Tale

When you're steering a small business and collaborating with other small organisations, it's tempting to bypass what may seem like mere formalities. This tale stems from a time when administration was very low on my priority list, leading to a lesson learned the hard way. I had fostered a good rapport with the founder of a client company. He was a good guy. We saw eye-to-eye on things and generally got on well. Until we didn’t…

Our harmonious relationship was put to the test over an agreement that was never formally documented — a decision to defer invoicing for services rendered. This oversight came to a head when I requested payment, only to be met with refusal. The absence of a signed agreement, or anything that came to close resembling one, left my business to bear the financial brunt. Although not crippling, the financial loss was enough to leave a scar.

What I've Learned: Nothing Trumps Pen on Paper

People do business with people. And it’s great when you do business with people you like. But we’re all human. We’ve all got a million other things we’re juggling and so it’s pretty easy to forget the details of a conversation you had with someone a couple of months ago. And so while it’s easy to trust that someone will do the right thing, it’s even easier to trust they’ll do the right thing if you’ve documented everything and got their sign-off.

The lesson? Trust, but verify. Ensuring that every agreement, no matter how minor it seems, is documented and acknowledged by all parties involved, isn't just about formality — it's about creating a foundation of trust that withstands the test of human memory.

And establishing, and more importantly adhering to, a comprehensive sales process that doesn't skip steps is not just advisable; it's essential for a future that doesn’t involve stress, lawyers and financial pain.

TL;DR:

• Bypassing formal agreements in business, even with trusted partners, is never a good idea. If you make exceptions be prepared to pay a price.

• Trust is fundamental, but documentation ensures clarity and protection for all parties involved.

• Establish and adhere to a meticulous sales process that covers every step, including documentation, to safeguard your business relationships and financial integrity.