Tag Archive | Business

Don’t start any project without a written Agreement

Blog entry

It sounds basic common sense and maybe even ridiculous, but reality shows that often times, Entrepreneurs start working on projects based solely on a verbal agreement.

Especially when just starting out, in the initial stages, when everything is in a flux and you’re rushing to start getting your revenue stream moving, driven by your passion, the need to cover initial investments, the need for free cash and bills to pay, you may be tempted, or even pushed, into working on a project with that new Client who took a liking to your product, service or person, without anything but a verbal agreement.

Although it may seem impolite, politically incorrect, tactless or even nasty, BEFORE you start investing your most precious assets (time & network) insist on having your Client sign a written Agreement. It’s easier than having to bear the Client walking away from the project once you’ve invested a week or month in it, leaving you with nothing but empty hands and an inclination to take up boxing lessons.

Ideally, you should have a few templates handy which will only require filling in the blanks regarding this Client and project. There’s no need to spend precious cash on attorneys writing out documents for you. Contact colleagues who have been in the business for a while, they surely have a few templates they’re willing to share. Alternatively, there are several online sites where you can find templates that will work for most cases or serve as a starting draft that you can adjust to your particular line of business and needs. (Check out http://www.entrepreneur.com/formnet/index.html for a few examples).

Your time, network and knowledge are not only your capital, they are your net worth; insisting on signed written Agreements creates commitment and communicates that you’re both professional and serious.

MANAGE THE RISK OF TAKING THE PLUNGE

Risk

Risk (Photo credit: The Fayj)

Taking the plunge, any plunge, is usually scary as hell, because it involves uncertainties, and as we’ve said: we feel like we’re not 100% ready: “it’s not perfect”.
The only way to minimize – not eliminate – the risk is to break down the different steps, the successive plunges, into the smallest possible size. If you wait until after investing $ 1 MM to take action, your risk is far larger than if you take 4 separate actions each time you reach the $ 250 K mark. That way you have 4 action and correction points along the way to the $ 1 MM investment mark.
Break it down, you’ll reduce risk and also anxiety.

HOW MUCH "IMPERFECT" IS OK?

English: Line in the sand A remarkably clear b...

OK, so in the previous post I said “don’t wait for perfection” but, how much imperfection is right? Where do we draw the line? How do we know when to take the plunge?
The easy answer is “it depends …” Yes, every project is different and some will require a greater degree of “proximity to perfection” whereas others can launch with a larger portion of imperfection or uncertainty.
The answer I prefer, and use as a rule of thumb is: when you feel that you’re spinning wheels; when you’ve spent time on something and at the end of the day you feel that you haven’t advanced an inch; that’s when it’s time to take it to the next level. Launch it, move into the next phase, test it, whatever you’ve decided is the next stage, do it.
Scary? You bet! The next stage is usually scary but you’ll never advance, you’ll never go anywhere unless you take that plunge.
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