Get It in (Simple) Writing
We like to emphasize “simple” because it is critical not to become bogged down with endless paperwork, bureaucracy, and attorneys. This is too expensive, too time-consuming, and rarely adds significant value to deals. The bigger the deal, the more overhead you may consume—but don’t do so for small change.
Paperwork is an infamously tedious part of business. In fact, parties frequently procrastinate in completing paperwork to seal a deal, even when it has been negotiated ad nauseum. Usually, what you think is merely paperwork ultimately requires further negotiations that are nice in principle, but contentious and time-consuming as they become more detailed.
Without paperwork up front, you wouldn’t have a business plan, or documented Standard Operational Procedures, employment offers, web service contracts, and so on.
In addition, you can’t buy costly products and services without well-documented, signed term sheets or formal agreements.
Paperwork should be quick and efficient, not backlogged. Again, you’ll need to hire a good lawyer and someone who can help write or edit your documents to get you through these stages of business.
If a vendor charges by the hour, you should have her quote a range of expected hours in advance along with the details of what is to be accomplished upon completion. Also, try to pay as little as possible up front so you maintain some leverage in the transaction and protect your cash flow.
Some people seem to think they are immune from “getting it in writing,” and certainly, nobody should be. It is amazing how frequently people expect others to agree to something of financial significance without producing paperwork that explains the details and its exact cost.
Paperwork is also necessary to protect yourself legally and financially. Often vendors prefer to leave things vague until it is time for you to pay for their products or services. Even though the price will no longer be vague, how it got so high and how you’ll be able to pay for it probably will be!
