For better or for worse, for richer, for poorer...

Marriage isn't the only kind of lasting relationship that consenting adults enter into these days. Joint ventures, equity capital investments, partnerships - business people are a sociable lot, and our optimism for the benefits to be gained from new commercial relationships seems limitless.

But although with marriage we may sacrifice common sense on the altar of love and instant attraction, in business this is rarely the route to riches. Imagine you were talking to your own children about their potential choice of life partner. What would you ask?

Are their intentions honourable? What do they bring to the relationship? Do their strengths balance your weaknesses, and vice-versa? Do you share the same goals? Do you have enough shared history and culture to be able to communicate effectively, while maintaining enough sense of difference to appreciate each other's contributions? Do you really trust them?

Of course it's always easier to give advice than to take it - but if you're considering entering into a new business partnership of some kind, run yourself through those same questions you'd ask your kids. And - the really scary bit - be prepared to act on your answers. Because there's more to due diligence than numbers.

Our new site is live!

I just wanted to make a quick post to announce the launch of our new Devant web site. It's been a long time in its gestation, but I hope you'll like it. We've updated it to reflect more of our style and philosophy, so the general feel is more up-beat and personal.

We've also added a glorious sign-up button, so that if you want to be told when there are new articles to download, or special deals on training courses, you just need to leave your email address and we'll do the rest.

Oh soggy day...

We didn't actually get flooded - unlike some of our less fortunate clients. The water was several inches higher on the outside of the office than the floor level on the inside, but mercifully it stayed outside and our lovely computers remained safe and dry.

Unfortunately the same could not be said of the car, which I managed to drown on my way to collect the children from school (which closed early because it, too, was flooded). I would like to extend my grateful thanks to John and the rest of the team at PP Construction Limted at the aptly named Deepwater in Swallowfield, who offered me shelter from the downpour, hot tea, and even (thanks again, John) a pair of dry golfing trousers to replace my sodden skirt.

My sojourn at PP Construction was brought to a peaceful end when the sun finally came out, and some of the chaps dug out the oars for the old tin boat in the yard. Yes, we rowed gently down the stream to safety, past my submerged car, with the sunlight glinting on the water. If it hadn't been for the fact that the stream was supposed to be a road, and I was supposed to be at work (with a nice, dry car in the drive), it really would have been a lovely way to spend a Friday afternoon.

Bacon and eggs

Never volunteer. In the land of Cub Scouts, even the faintest hint that you might possibly be less than 100% averse to helping out is roughly akin to jumping up and down, waving your hands in the air and shouting 'Me!! Pick me!".

So there I was, at 6.30am on Saturday morning, struggling to light the urn in a damp marquee in Marlow while hoards of grubby Cubs stuck their heads through the tent flap to enquire whether the bacon was on yet. Friday had seen me trundling around Sainsbury's with a trolley full of 300 bread rolls, having already loaded the first two trolley-loads of groceries into the capacious boot of our Volvo estate. And that didn't even include the meat and veg, which were coming direct from the farm shop.

Although I spent most of the weekend in a tent, slaving over a hot camping stove, I must confess that I love Cub Camp. It's the combination of enthusiastic kids, just as happy to muck in with making packed lunches as they are to grapple with raft building, and hard-working parents, whose sense of humour never seems to fail them in the most trying of circumstances.

Not, of course, that I'd ever consider doing the catering again. At all. Ever. So don't go getting any ideas if you're reading this, Akela...

Better Buying

As well as our scheduled Foundations of Commercial Contract workshop, this week has seen our first 'Better Buying' workshop, a customised event developed for one of our favourite training clients.

This was a great opportunity  to look at negotiation from the other side of the fence. A while ago we did a big project for ntl, re-negotiating some of their software and support agreements. Our efforts delivered £1.25million of savings, and showed how much could be achieved with a bit of planning, preparation and creative thinking - all of which add up to ace negotiations! 

So pulling together everything we'd learned from this exercise and other buy-side negotiations, with our extensive sell-side experience enabled us to create a cracking half-day workshop. It was a very intensive morning, but really helped the client to focus on what they needed to do to become more effective purchasers. And of course this will, in turn, help them become a more effective selling organisation, as they can pass on a share of their savings to their own customers while retaining the rest on the bottom line!

Well here's to you, Mrs Taylor!

Last Saturday, we lost Alison Moss from the Devant team. Luckily for us, her successor - Alison Taylor - is just as fantastic!

Confused? For those of you who haven't been watching Alison's feverish preparations over the last few months, I'm delighted to announce that Saturday was the date of her wedding to Dave Taylor. So our Alison became Mrs Taylor and Dave became a very lucky man.

Congratulations, Alison and Dave! We all wish you a very long and happy life together.

Spreading the Message

Our latest Marketing Strategy Meeting was hosted yesterday at the Institute of Directors in Reading by Rivercalm, our marketing folks. The venue was great - well run, and just a few minutes from the station. Quick tip - if you're driving to a meeting there, remember to call ahead and book your space in their secure underground car park!

The Devant team's marketing challenge for the next twelve months is how to spread the word about the importance of good commercial contract training in developing profitable business relationships. We talked around the issues that face companies of all sizes - and how it is that we expect folks to be able to explain contract terms when they've never received any useable training. There's a world of difference between a legal lecture (which, for most business people, is effective as a sedative but that's about all!) and good commercial contract training. 

Of course I would say that, wouldn't I? But seriously, we do tend to get pretty evangelical about training because it's only when everyone in the business understands the impact of the contract structure on the success of a deal that the company's sales efforts can be translated into profit. It's so frustrating to see companies with fantastic sales teams and highly capable delivery folks allowing their margin to fall through the gaps between the two. This is a gap that can be plugged with some good training - on both the sales and the delivery side - so that more of the revenue from the deal makes it to the bottom line.

Mobile Miracles

Last week I took a brief trip to Sydney. It was a holiday, of sorts - an opportunity to visit an old friend who'd just had her third baby, to provide some domestic support and get my share of baby cuddles!

It was wonderful to see my friend and her family, but the trip was also noteworthy for me as an experiment in truly mobile working. Thanks to the glory of the Macbook, which comes complete with built-in camera and wireless networking, I was able to video-chat with clients in the UK while my Australian hosts slept. During a stop-over in Singapore, my children were amazed to be able to see the buzz of Singapore airport in the background when I called them up for a quick i-chat. The other passengers were a bit bemused at me chatting to my computer, but I thought it was great.
We Devant folks do get some odd looks from clients when we whip out our Macs - they're usually associated more with graphic designers than contract specialists. But I love my Mac. It does all the usual PC stuff - just with a little more style ;0).

Strategies in the sunshine

Yesterday's Constructive Negotiation Workshop at Wyvols Court in Swallowfield gloried in some fantastic sunshine. The breakout sessions, where the teams of delegates prepared for their role play exercises, took place on picnic tables scattered around the beautiful grounds - making it tougher than usual to get the teams back in to their negotiations!

One thing that I love about negotiation training is the way that people can surprise you. I was delighted to see how the quiet and softly spoken Heidi proved herself to be an ace negotiator, swiftly helping her adversaries to set themselves up for her perfect deal.

If you have a hot deal lined up, make sure you do your homework before you start negotiating - you never know when there might be a Heidi on the other side of the table!

To License, or to go it alone?

This morning I was delighted to share a stage with Ashok Vaidya, an expert in technology development and commercialization, for the Surrey Enterprise Hub's Licensing and Negotiation Workshop. The audience comprised entrepreneurial businesses who are looking for the best way to grow their businesses, and generate profit from their innovations.

Ashok explained how licensing technology to a partner with the capacity to manufacture and sell your product can accelerate the speed of market penetration and result in rapid growth. The downside, as he pointed out, was that sharing the risk of manufacture and marketing also means sharing the rewards! Loss of control was identified as another key concern among the delegates, along with the tricky question of setting royalty levels.

We discussed a number of mechanisms for increasing our negotiating power before getting to grips with a potential licensing partner - essential if you're a small company negotiating with a larger manufacturing business! Over the last four years this has become one of our key challenges at Devant, and I guess we've become a bit fanatical about the benefits of working with smaller companies.

If you have some great technology and are looking for ways to commercialize it without giving away stacks of equity to venture capitalists, licensing could be the way forward. As always, give us a call (0118 988 9670) or drop us an email (info@devant.co.uk) if you'd like to talk through the pros and cons.

Who'd be a Bridesmaid?!!

Regular readers will know that we at Devant are big fans of getting agreements set out clearly in writing to prevent misunderstandings. But even we were stunned by this contract prepared by a US bride for her bridesmaids! It rather makes the fun of dressing up pale into insignificance, doesn't it?!

*Bridesmaid’s Contract*

Hello my beautiful bridesmaids! Let me just say again how happy I am that you are going to be a part of my special day! Below are just a few guidelines for the wedding that I’d like you to review, please initial by each point, sign at the end and send back to me. Just want to make sure they’re aren’t any surprises! The planning bride is a happy bride!

Thanks a bunch! Love ya!

_____ My hair will remain at the length it is now or longer.

_____ I will not change my hair color without first consulting Katie and providing a sample photo or hair swatch for consideration.

_____ I will use Sally Hansen’s “Maximum Growth-Daily Nail Growth program” every day for the 4 months before the wedding day.

_____ I will not gain more than 4lbs from the weight I was when I was asked to be a bridesmaid.

_____ I swear to attend all showers, (lingerie, bridal & bachelorette) to arrive in a timely manner and do everything in my power to support and “be there” for the bride.

_____ I will purchase the David’s Bridal style # 81123 dress below in Latte/Champagne within 3 weeks of today.

______ I will NOT knowingly get pregnant without notifying the bride at least 4 months prior to the wedding so a suitable alternative can be found. I will also give my purchased bridesmaid dress to said alternative.

I do hereby swear that I will adhere to all of the above & other understood bridesmaid duties for the wedding on September 21, 2007
X_________________________
(sign, print and date)

A New Hub is Born!

Yesterday it was my great pleasure to be invited as the inaugural speaker for the new programme of events run by the Thames Valley Enterprise Hub. The Thames Valley Enterprise Hub is funded by SEEDA, the South East England Development Agency, and exists to support growing businesses in the region. Yesterday's event was the first of those to combine the Hubs of Bracknell, Reading and Newbury, and an impressive number of Hub companies braved the M4 and the early start.

The subject of yesterday's seminar was 'the danger of assumptions', and this certainly seemed to resonate with the audience. It never ceases to amaze me how we can experience mis-understandings regularly with those we know very well (spouses for example!), and yet somehow still expect relative strangers to understand us completely, when we discuss structuring a new business deal.

There was an excellent level of interaction from the delegates, reflecting the highly innovative and entrepreneurial businesses that the Enterprise Hubs attract. My thanks to the Hub team (Susan Elliott, Tracey Sanderson and Ed Cooper) plus Stephen Dowling, who was instrumental in setting up the whole event, for giving me the opportunity to present to such an inspiring group.

The delegates at yesterday's event participated in a survey to identify the top five commercial contract issues for entrepreneurial businesses. We shall publish the results in due course - if you would like to participate in the survey,
contact us for details.

No snoring!

Yesterday's Commercial Contracts workshop was a stimulating event, with a great set of delegates. We managed to maintain our unbroken "snooze free" record, even during the post-lunch session when the effects of the early start began to be felt. This might not sound like much, but those of you who have ever attended a legal briefing will know that legal terminology can have a seriously somnolent effect in the wrong hands!

I love Devant workshops. Because we limit the numbers, we are able to get to know each delegate during the course of the day and to learn about their business and commercial issues. The mixture of industry sectors often allows cross-fertilisation of ideas, enabling the spread of best-practice in commercial and contract management.

Our delegates yesterday were a particularly sharp bunch, with the highest performance yet in our Memory Game. This is a fun method we use to help delegates to remember the key contractual points to look for when reviewing or structuring a contract. As well as being entertaining, it helps delegates make the leap from being 'amateur contract reviewers' (who can read what is written down, and comment on it) to 'professional reviewers' (who can see what should be there, but isn't!).

So thanks to Darren, Janine, Kim, Sarah and Tony for your contributions and your enthusiasm. And thanks also to Simon, our photographer, who took some great images during the workshop. These will be appearing on our web site and publicity material in the near future - watch this space!

Keep out of trouble!

Those of you who have ever tried to dig your company out of a hole caused by over-enthusiastic deal-making will appreciate that the stress, expense and legal headaches associated with this thankless exercise are best avoided.

Companies have crumbled, projects failed and margins evaporated - purely because the deal-maker was not aware of the risks they were exposing the business to when they shook hands on the golf course, or signed on the dotted line.

If you want to avoid the pitfalls of dodgy contracts and poorly structured deals, sign up now for our Commercial Contracts workshop on the 26th April - there are only a few places left, and it will be the most valuable day you've spend this year. Don't think you can spare the time out of the office? You can't afford not to!

CONTACT ME NOW to book your place.

A new Financial Year

For many of us, April is the start of the new FY. The stress of wrapping up deals for the end of the previous FY is over, and for those who are involved on the financial side of the business, this is the time when all of those number must be crunched to find out how the company's performance looks on paper.

One of the great benefits of taking some time out at this time of year is that you can reflect on the successes and failures of the previous twelve months and see how best to target your efforts during the next year. I took a break over Easter to spend some time with my family, in Spain's Costa Blanca. The change of scene and of focus really helped to clear my mind, and has enabled me to look at Devant's future with a fresh outlook. We're now busy planning new training services that we can offer in the coming year - watch this space!

If you're keen to enhance your deal-structuring skills, to ensure that you hold on to more of your margins in the coming FY, sign up for our Commercial Contracts workshop on Thursday 26th April. There are a few spaces left, and some great deals available if you are able to attend.

You can share some of the highlights of the Costa Blanca by clicking on the slideshow below - great pictures, courtesy of my wonderful husband, Simon!

**CLICK HERE** to view

Leaking Umbrellas

Over the past few months Devant has been assisting numerous clients in various aspects of subcontracting, often to one-man-band subcontractors. This is such a common situation that you’d expect everyone to be aware of the issues, but alas no.

Problems commonly arise from the commercial terms, as most subcontractors want to make it as hard as possible for the client to get rid of them yet want to be able to exit of their own free will with 5 minutes notice. However, issues also occur due to the demands of inland revenue legislation and IR35.

Unless you have a contract with the subcontractor that clearly establishes that they are not an employee, you could be liable for income tax and National Insurance Contributions for that person.

This isn’t as simple as just stating that they aren’t an employee, but stretches much further. For example:

• the subcontractor’s ability to provide a substitute worker
• the place of work and equipment used
• the nature of the subcontractor’s obligation to provide services

You also need to ensure that you both do actually operate in accordance with the contract, as the courts have a mixed response to workers who subsequently try to claim to be employees; some succeed and some don’t.

The implications for the ‘employer’ can go far beyond tax issues. If you are judged to have been acting as an employer, you could owe the worker holidays, sick pay and any other benefits to which they would have been entitled as an employee.

So where do the leaking umbrellas come in? Well, IR35 is a piece of legislation that centres on intermediaries. It aims to stop subcontractors using intermediaries, such as partnerships and service companies, as a means of avoiding tax, specifically income tax and NICs.

Some of these intermediaries or ‘umbrella’ companies suggest they can save a subcontractor money, represent them better than they would be as a self-employed sole trader and negotiate them better contracts. Yet we have seen contracts where a substantial monthly fee is paid by the subcontractor to be an employee of the umbrella company and yet the contract actually reduces their rights rather than improving them. It also often leaves the client with a contract signed by an intangible third person rather than the subcontractor with whom they are working.

Our advice to clients?
Take legal advice to ensure your subcontractor agreements work for you and protect you as far as possible.

Our advice to subcontractors?
Beware of leaking umbrellas. Make sure you fully understand the implications of your contracts before you sign and seek legal advice if you are unsure.

Contract Drafting for Beginners

OK, so we all know how difficult it is to draft a good contract, don't we? Sometimes, absence of specialist help can prevent us from getting started, leaving us completely unprotected.

Well, dear reader, take heart. This weekend, my children successfully negotiated a deal that will earn them pocket money in exchange for some light domestic duties.When we'd struck our deal, my son said 'OK Mum, now we need to write the contract.'

Strange, I know, but that's what comes of having a mum who does what I do!

So how can the noble art of contract drafting be distilled to a level where a nine year old and a five year old can understand it? Simple, really (well, it would have to be, wouldn't it?!).

First, I explained the three critical questions that must be answered before you start:

1. who does what, when?
2. when do we get paid (and how much)?
3. what happens when things go wrong?

Then they set about answering these questions, one at a time. Under the first point they listed their respective tasks. Under the second, they set out how their pocket money was calculated, and what things could increase or decrease the amount paid to them. In the third, I asked what might go wrong with their tasks?

Albert, nine, is responsible for clearing the table after meals and loading the dishes in the dishwasher. 'What if the dishwasher's already full?' he asked.

'What do you think should happen?' I replied.

'I could stack the dishes on the side, or in the sink?' So, we added a provision saying exactly that. Evie, five, asked what happened when they had school lunches - did she have to set the table for all 100 school children? So we clarified that they only had to do their meal-time duties at home, although we thought it was a good idea if they offered to help when eating at a friend's house.

So there you go. Contract drafting for beginners. Answer the three questions above, and you'll be covering your most important bases. If you get stuck, ask your kids for some help - you'll find they're great at asking direct and probing questions that will enable you to get to the nub of things. And, if nothing else, it will give you a great basis for briefing your lawyer!

Personal Data: Off site, out of mind?

Being connected to a call centre in Bangalore when you call your UK bank or insurance company no longer comes as a surprise, in our increasingly global economy. Similarly, hosting your marketing database on a server in the US, or signing up for an ASP service provided from Australia seems ‘business as usual’.

But if your activities mean that personal data capable of identifying individual people in the UK or elsewhere in the EU is accessible outside of the EU then you have responsibilities under the Data Protection Act 1998.

So what does ‘accessible’ mean?

It means that the data can be viewed, downloaded or processed:
• by other clients or members of the public on a web site;
• by your hosting provider; or
• by third parties providing software support or services

How can you ensure you are protecting personal data in accordance with the Act?

First, whether your data is being processed inside or outside the EU you need to have a contractual commitment from the offsite company that they will comply with the ‘Seventh Data Protection Principle’. This means that they will use appropriate physical and operational security measures to prevent unauthorised access to or usage of your data.

If the third party is outside the EU, you need to take extra precautions to protect personal data. There are a variety of measures that can be considered, depending on where they are and what business they're in. These include:

• obtaining explicit consent from each data subject to the transfer of their data outside the EU; and/or
• signing a ‘model contract’ with the third party, approved by the Information Commissioner, that commits them to certain data protection obligations; and/or
• getting the third party to subscribe to 'Safe Harbor' provisions, if they are in a regulated industry in the US.

There is little case law in this area, and each situation needs careful consideration on its merits. So if you’re considering off-shoring or outsourcing any part of your business, be sure to take advice before signing on the dotted line!

Light Bulbs

This post is made by Alison Moss, Devant's new Commercial Contracts Advisor. We are delighted to welcome Alison to the team, and look forward to many future posts from her! - Tiffany
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I wish I had £1 for every Sales Manager, Commercial Manager or FD I’ve spoken to recently who’s said to me “I didn’t know that!” It would have bought me at least a few bottles of good wine over Christmas.

One of the many realisations I had when I joined Devant was the true limitation of most business people’s knowledge of commercial contracts. I’m speaking now as a sales manager who reviewed and negotiated on commercial contracts as a fundamental part of my job. I generally dealt with the commercial issues and consulted the retained solicitor about the legal stuff. It was the set standard procedure, but at huge cost to the company!

As business managers most of us have to deal with commercial contracts and they are frequently seen as a sales prevention tool. Because we have some understanding of the clauses and terms, we assume we can simply rely on the solicitor to spot any legal nasties. But what an opportunity we are missing.

- We could save money in the form of legal fees if we weren’t totally reliant on a solicitor.
- We could save time, and therefore money, by empowering our sales teams so that they aren’t totally reliant on us.
- We can change the focus of negotiations using contract terms and hence improve the power balance with customers or suppliers.
- We could give ourselves and our teams better credibility and confidence by truly understanding what the implications of a contract are.
- We could negotiate more commercially relevant contracts.
- We could do all this by gaining a better understanding of commercial contracts.

I have attended the Devant Commercial Contract Workshops and watched ‘the light bulb go on’ with business managers as well as experiencing it myself.

My one regret? That I didn’t have the benefit of these courses when I was a sales manager.

Is Negotiation the New Kung-Fu?

As a young Engineering student I relished rock climbing and riding fast motorbikes and considered myself pretty robust. But when I briefly acquired a love-lorn stalker (!), I decided to add self-defence to my skillset.

I began learning Kung Fu and practiced my stance, punches, blocks and nifty moves. Doubtless, had I studied and trained hard for many years I would have been well equipped to counter any real-life adversary. But going to one class a week and practising sporadically in between, the only opponent I was ever going to beat was the one who moved slowly and telegraphed their moves well in advance. I’d developed enough skill to deal with a limited set of scenarios, but in a real-life situation I knew that my theoretical expertise would evaporate, and my best defence would be to run away!

So where does negotiation come in? Well it strikes me that much negotiation training available these days appeals to the King Fu student in all of us. It suggests that, with a day or two of training, we can learn new techniques that will render us invincible at the negotiating table. In reality, when we first encounter a client who doesn't "follow the script", we find ourselves high and dry.

Should we forget training? Absolutely not! But we should consider learning events that are biased towards rapid skills transfer and practical application, and followed up with focussed feedback and encouragement. Either that, or learn to run away, very fast!

A More Prosperous New Year!

Welcome back to all of you who've taken a Christmas and/or New Year break, and I wish you a very happy and successful 2007!

Have you made any New Year's resolutions? I suspect that, in addition to getting fitter (this is the year that gym membership will REALLY earn it's keep!) many of you will have made New Year's resolutions that relate to being financially better off, and making your business more profitable.

To help you achieve the last two, I'd like to share with you a negotiating tactic used to great effect by my five year old daughter.

Yesterday we had a New Year's Party, and invited friends and relatives to join us for a celebration. It was also an opportunity to get some help eating all of the chocolate that we and the children had been given for Christmas! Young Evie kept making forays into the pile of chocolates in the centre of the table, each time our backs were turned. After my husband had told her "No more!!", she disappeared for five minutes and then returned.

"Please can I have three more chocolate shells?"

"Three!! No way!"

"Alright, can I just have two then?"

"No."

"But I've been very good..."

"OK, just one last shell..."

I don't suppose she ever expected to get more than one more chocolate, but if she'd have asked for one in the first place, my husband would certainly have sent her off empty handed!

In the world of business, asking for three times what you hope to get is not likely to boost your credibility (a concern not shared by the average chocoholic five year old!). But on the next proposal you put together, work out your price and then add an extra 10%. That 10% may well go unchallenged, in which case that's an extra chunk of pure profit you've added to the bottom line. And if you do end up negotiating - well, with a better starting point, your finishing point should be similarly improved.