SWBR_v7_issue423August UWTSD

| SOUTH WALES BUSINESS REVIEW
ADOLYGIAD BUSNES DE CYMRU |
What the Large Print Giveth,
the Small Print Taketh Away
Michael Green, Phillips Green & Murphy Solicitors
Will your Business Survive
by Luck or Design?
Starting and running a business can be
very exciting and challenging. Being
an entrepreneur and your own boss
is seen by many as an attractive goal.
It can also be extremely rewarding.
However, there is another, much more
mundane, if not downright boring,
analysis of starting and running a
business. That is to see the process for
what it is, a series of legal contracts.
Running a business largely
relies on contracts
Everything you do from buying your first
stationary, renting your premises and
taking on your first employee involves
entering a contract. Contracts are two
(sometimes more) sided agreements
where one party agrees to do something
for the other party usually in exchange
for money. Buying a cup of coffee, from
your favourite chain of coffee stores, is a
contract. The Coffee shop provides you
with the coffee and you pay them. Most
other business contracts are, however, far
more complex than that. They contain
lots of what lawyers like to describe
as terms and conditions, and
can be quite complex and
boring to read. Largely
because they have
been written
by lawyers.
Reading them is, however, a
must if you are not to fall foul of
unexpected consequences.
Take, for instance, a recent example I
came across. It involved a lady who set
up a business. She needed a website
to sell her goods. She entered into a
contract with a website provider. They
were a smaller, independent company
who agreed to build the website and
provide hosting for a period of five years.
There were detailed terms and conditions
on their website, which, presumably, she
did not read.
After a couple of months the website
crashed. It is her case that she lost
around £10,000 worth of business over
Christmas and the problems continued.
Reading the contract revealed that it
contained a force majeure clause. Force
majeure is French for “superior force” and
relates to matters which are beyond the
control of the parties. It relieves parties
of their liabilities for breach of contract
if the contract cannot be performed for
specified reasons. These clauses relate
to such matters as war, earthquake and
“acts of God”.
In this contract for the provision of an
e-commerce website and hosting,
hacking and malware were listed among
the examples of force majeure. So
the website providers seemed to be
suggesting that having their system
hacked or infected by a computer virus
is in the same category as items which
are genuinely beyond their control such
as loss of power from the National Grid
and earthquakes.
Such a clause should raise alarm bells
with any potential purchaser of their
services. But as most people don’t read
contracts before they enter into them, the
majority will never know until it is too late.
Why reading your contracts
pays off in the long-term
There are very few business contracts
into which you will enter that do not have
alternative suppliers. That gives you an
opportunity to negotiate the terms of the
contracts before you enter into them. The
cheapest might seem appealing at first,
but that is not the only criteria against
which a supplier should be judged.
Go through what you are signing up to
carefully, and if you need clarification,
seek it by email rather than telephone
so you have a record of the questions
you asked and the responses you
received. If the contract is particularly
significant in terms of the importance to
your ability to run the business (as in the
website example) or is of high monetary
value, it may well be worth you seeking
professional advice.
That might seem an expensive option
initially, but in the long run, it is better to
be safe than sorry.
Day one. You have invested time and
money in designing your website. You have
designed your logo and business cards. You
have designed your social media presence.
But have you designed your network?
I opened my company nine years ago, and
during that time I have seen many people in
my network take the plunge and open their
own business. Of those people, I can count
on one hand the number still operating after
three years. The question is, why? There are
many reasons, but there is one in particular
that is critical.
How your network of
contacts contributes to your
business success
Imagine your world as a network, where
every person you meet is a node in that
network. Now, imagine each node as a
magnet. You, as a node, will attract people
and other nodes will attract you. That
strength of attraction is based on a synching
of knowledge, skills, experience and needs.
The problem is that when starting out in
business too many people focus on building
networks of strong ties - people with high
levels of similarity (strong magnetism), who
reinforce their view of the world. At this point
you might be thinking, where’s the problem;
if people have a similar view of the world
then it naturally follows that they are more
likely to engage you? However, those strong
ties can serve to constrain your ability to
survive and thrive.
David Griffiths
MSc (Edin), PhD (Edin), CMgr FCMI
For example, meet Richard. Richard was 43
and had worked for ten years as an internal
Learning and Development consultant
for a multi-national firm in London. After
being worn down by years of restructuring,
he opted for voluntary redundancy and
opened a consulting practice. He networked
with consultants who delivered similar
services and mined his existing network
for opportunities. Within eighteen months
Richard had exhausted opportunities in his
network and found that instead of being
collegiate, his fellow consultants were
cutthroat (after all, they were competing
in the same space). Within another twelve
months, Richard had gone back to work as
a Learning and Development Manager in a
medium-sized company in Birmingham.
One of the secrets to longevity is the
diversity of your network. A diverse network
of strong and weak ties (think of this as lower
levels of attraction or magnetism) will allow
you to challenge your thinking about your
service or product offering. Such diversity
allows you to sense and anticipate changes
and opportunities in the market, which leads
to growth and resilience.
How I built my professional
network to help my
business grow
In contrast to Richard, I took the design
approach to network development. I
started by observing the market space,
building a political, economic, socio-cultural,
technological, environmental and legal
network. I took an empathetic approach,
engaging on social media to understand
what people were saying, what they were
hearing and what they were seeing and
what they were feeling. Such an approach
enabled me to build a sustainable business
model of emergent opportunities that has
allowed me to work in 17 different countries
over a nine-year period.
Longevity, resilience, can happen by luck
or design; if you want to out perform the
competition, invest the time and money in
designing and developing a diverse network.
On the other hand, you could leave it to luck.
David Griffiths is the former Programme
Director for the part-time Doctor of Business
Administration at Swansea Business School.
If you are interested in resilience (longevity
by design), check out the UWTSD part-time
DBA. Contact gareth.hughes@uwtsd.ac.uk.
6 | Vol 7 Issue 4 2018
Vol 7 Issue 4 2018 | 7