Rookie mistakes. We are all guilty of them. Whether it's letting a client slide without a contract, entering a long-term agreement with a vendor we soon come to loathe, underpricing our products or services, or allowing someone to get too far behind on their invoice before we cut off the faucet...each mistake hurts. If we are lucky it only hurts our pride, but quite often we get burned - that is, we take a hit in the pocketbook, too. Something most small business owners cannot afford. The important thing is - what will you do now?

Contracts

You neglected to get one of your clients to sign a contract. Oh, you sent it to them alright. They just didn't sign it. You just didn't say anything. How can you correct this mistake? Well, the good news is, since you are not in a contractual relationship, you can present the contract to the client again. This time don't just let the subject slide. Ask the client to review the contract and request it back by a certain date. If the deadline comes and goes; talk to the client and try to get to the heart of the issue. Are they concerned about committing to a long-term contract? Perhaps you can offer a shorter trial period. Is there particular wording in the contract that concerns the client? This, too, may be negotiable.

Pricing

Ever quoted someone a price that you wanted to take back the second you heard yourself say it? Classic rookie error. This may be a slight problem with short-term projects or small quantity purchases. For ongoing projects, the financial repurcussions can be quite unsettling. How can you prevent yourself from making such a commitment in the future? Is there anyway to rectify the situation now?

It is important to periodically reassess the pricing of your products or services. Check out the rates of the competition, carefully assess the time and materials that you use for each product, or the value of your services. You must now decide whether to raise your pricing, and if so, when? And for who? While it always seems like plain old common sense to raise our prices for new clients, it is much more difficult to raise rates for current clients. This is definitely one of the reasons that the business plan and marketing plan come in so handy before we've stepped into the muck. Nevertheless, the new year, or the client's anniversary, are appropriate times to approach the subject.

Word of advice - don't just send a higher invoice with a sticky note, "Prices went up. Must eat. Thanks!" Instead, inform your clients ahead of time through a letter or phone call that your prices must be adjusted, due to cost of living, etc.

We've already established the importance of learning from rookie mistakes, as a business owners. But, how can you prevent getting burned in the first place? An important element of developing your business plan is checking out your competition. This helps you determine how to make your organization stand out among its competitors. As you learn about these organizations, or even talk with them, you will discover policies and procedures that they have developed. This knowledge should spark questions about the policies and procedures that you plan to implement. Networking with other business owners, both in and out of your industry, is also a wonderful source of information. Many business owners are happy to share their learning experiences and advice. Consider some of the areas you'll want to give special attention.

Payment Policy

Spell out your payment terms clearly. Many businesses post this information on their website, or in a prominent place in their stores, so that it is easily accessible to both current and potential clients. When negotiating a contract with a new client your fees, services or products, and terms of payment should be carefully detailed. Be sure to include the consequences of non-payment. While we'd like to think that everyone will pay, and pay on time, this is not always the case. It is important to cover this issue, regardless of how reliable the client has been in the past.

Some of the issues covered in your payment policy should include forms of payment accepted; due dates; late fees; returned check fees; at what point a client is considered deliquent and at what point the client's services will be terminated for non-payment.

Establish Boundaries

Decide what hours and days you plan to operate - ahead of time. As small business owners, particularly in the service sector, there will always be times when we need to make an exception to meet the needs of our clients. That's part of great customer service. However, such situations should be the exception, not the rule. Setting clear boundaries with your clients from the beginning can prevent endless weekend or evening calls for routine matters which can easily be handled within your business hours. Keep in mind, it is much harder to break a client of this habit, than it is to establish the ground rules from the beginning.

Miscellaneous Items

Remember the last time you received a bill that included a whopping surprise? Well, clients don't like it either. Communicate with your clients about any expenses or other fees that will be included if they take up a certain project or plan. Is this a long-term project that will not net results until all phases have been completed? Let the client know this in no uncertain terms and make sure that they have the resources available to see the project through. Outlining the project and the projected cost is more work, but it will avert many problems down the road.

Will special equipment or materials be required at the client's cost? Outline this information and specify whether the client will be expected to pay any additional expenses prior to the start of the project. Will client items require storage at your facility? Outline whether or not there will be charges for this and when they will be due.

Community Resources

Find out what resources are available for small business owners in your area. Several communities have low-cost to no-cost classes for current and potential small business owners that will help you thoroughly prepare for the start of a new business (from which entity to select to developing a marketing plan) or make your business more profitable, or gain visibility. Why reinvent the wheel when there are resources that can give you leverage? I'll admit, sometime it takes a bit of digging to find these programs (get a great book and learn to ready while on hold) but it will most certainly be worth it.

Bottom line: being a proactive business owner is the best method of "burn" prevention. Take the time to think about each process or transaction that your current or future company will utilize. Mentally venture through each step of the process. Imagine everything going exactly as you'd like (I truly believe in the power of positive imagery); but then consider the things that could go wrong. Now decide how you can best prevent things from going awry and how you can protect your firm's interest if they do.

Roxanne Ravenel is the President/Owner of SOHO Support Solutions LLC, a full-service Copywriting & Virtual Assistance Firm. Her firm produces business articles and a variety of marketing collateral for small to medium business organizations and independent professionals, through strategic collaboration of a team of experienced copywriters and other professionals in a variety of complementary fields. Visit http://www.SOHOSupportSolutions.com/ to learn more about her firm