How To Protect Your Business From Volatile Start-ups
While we’re not suggesting that every start up company is going to end up owing you money, dealing with a new business requires a certain amount of caution.
One thing you probably will get from a start up is a good deal. The owners are likely to be falling over themselves in their eagerness to impress you with their service or product and prices will be cheap while they feel their way into the market place.
This is something you should take advantage of while also being firm on any payment terms. 50% payment up front shouldn’t be a problem if you are providing a service and this should at least protect you from not getting paid at all.
If you think all this is scaremongering advice consider the fact that the Government-backed Start Up Loans scheme saw 30% of its loans to start ups written off in 2012.
While figures are not available for the number of businesses owed or having to write off debts owed by startups, the numbers are likely to be equally high if not higher still.
So while it may feel cheeky, consider what might happen if you waste a lot of time and money dealing with a start up only to find that you don’t get paid.
If the worst has already happened to you, there is always the option of hiring a debt collector to collect the money on your behalf.