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How to Set Up Effective Terms and Conditions Before You Sell On Credit

Setting up effective terms and conditions can be a challenge for many small business owners when they are formulating their payment infrastructure. Extending credit can be an effective small business strategy as it allows your business to establish customer loyalty and to increase sales with customers who would not do business with your company otherwise. Consider the following tips when you are setting up your small business terms and conditions:

Understand the Legal Parameters

Each country has a separate standard for credit terms and you will want to familiarise yourself with those laws as you are setting up your small business terms and conditions. What are the legal requirements for customer returns or customer complaints? What are the customer’s rights and privacy laws in your country for small businesses? What disclaimers must your business post to do business with customers?

Establish Procedures

Establish systems and procedures within your small business and across departments to ensure a consistent business approach as it relates to terms and conditions. Consider what your current process is and what the gaps are when establishing procedures and practices in your small business. Define and set up a customer credit policy and communicate it to other team members to ensure a consistent work flow. Develop an application form and consider making it available on your company website for new customers to fill out when they are requesting credit from your business.

Establish a Credit Policy for Your Business

Establish a credit policy for your business which will include the circumstances that you will offer credit, the process to determine a customer’s credit and the terms and conditions that your small business is offering. Select and establish a collections policy for any customer that does not pay or is slow and communicate this process to all employees who would be involved to ensure consistency.

Create a Credit Term Discount

Consider creating a term discount for credit customers such as a 2% net 10 policy to encourage customers to pay their invoices early.

Establishing terms and conditions for your business will help to improve work flow and can enable larger customers who only work on credit to establish a relationship with your business. I encourage you to post a comment about your ideas or practices as it relates to effective terms and conditions that have been effective for your small business. Also, if you are not already a subscriber to my website, enroll to day so that you can continue to receive valuable small business tips such as this.

Successful Affiliate Marketers Pay Attention To The Terms And Conditions Of Affiliate Programs

Every affiliate program has their own unique set of Terms and Conditions, which affiliate marketers must follow in order to participate in the program. Not following these guidelines can get your site banned or your affiliate account canceled, which could result in lost profits so it is important to follow the rules to the letter.

Common Rules

There are some common rules that most programs have in place, although they may differ largely in other areas. For example, sites that promote sexually explicit material, violence, discrimination or hate will not be approved by most programs. Most affiliate programs also will not approve websites that are filled with content that promotes illegal activities. While there may be programs that cater to adult sites, most of the popular ones do not and will not tolerate that kind of material linking to their site.

In addition, the domain name you choose for your website could result in a rejected application from affiliate programs if it is too much like their own domain name. For example, if you misspell the name of a famous site and use it for your site, don’t count on being approved for their affiliate program.

Rules About Links and Graphics

Make sure you abide by the Terms and Conditions regarding the links and graphics you place on your website. Not complying with this guideline can get your site banned and your account closed before you can make your first sale. Most affiliate programs provide links, graphics, and instructions as to what is acceptable use of them on your website. Follow these instructions to the letter.

Buying Products Through Your Affiliate Links

Affiliates should pay special attention to this rule as the purchase of products through accessing your own links is prohibited though they may be allowed by some of them. Even when it is allowed though, you still have to have so many referral sales before you’ll qualify for payment. Affiliates who join affiliate programs with the idea of getting discounts for themselves will quickly discover that this practice won’t work and they will lose their affiliate privileges.

Once your website is approved for the program of your preference you apply to, be aware that most of these programs have safeguards in place to ensure your further compliance to their program rules. Your site will be monitored to make sure you are following the rules on a continuous basis. Learn from the affiliate marketers who came before you who did not read the Terms of Service and had their sites disallowed when they had no idea they were in violation of the affiliate program rules.

Essential Lease Terms And Conditions In Retail Property

Some lease terms are peculiar to retail property. They have to be because retail property performs in a different way to office and industrial property; retail property is geared closely to economic cycles and regional demographics.

Most investors in commercial and industrial property desire the security of a long term lease, whereas investors in the retail property market often prefer short leases with no option of renewal; they can then select and gain better tenants if and when possible at the expiry of leases. In this way they get greater control over the property future given the changes to and needs of the shopping community that visits the property.

In retail property the performance equation is:

  • Know the shopper and what they want, and then find it for your tenancy mix.
  • Know the tenant and what they offer, and then match it to the shopping customer.
  • Integrate the property into the community with direct and relevant marketing
  • Know the landlord and what they need in property performance, lease stability, and cash flow.

Build a business plan for the property around all and each of these issues.

It is interesting to note that many owner managed properties at the smaller end of property size, say sub 3,000 m2, are on average poorly managed and typically struggle to compete. This is largely due to the landlord manager making decisions without due regard to the other stakeholders to the property performance equation.

You can usually see an owner managed property that is poorly performing by just standing in the car park. The low level experience starts in the car park and follows you into the property. Tenant mix in such property is solely based on the rent that the landlord wants and little else.

A great retail shopping centre is built on the skills of highly experienced leasing and property managers that know what to do and how to do it. These managers are not usually standard real estate agents. If in doubt seek evidence and proof of their skill in retail shopping centre management. Look at what they have done and talk to their other property owners to get that evidence.

Most retail leases assume that tenants will be responsible for all statutory outgoings. These include municipal rates, water rates. In addition, tenants are usually responsible for the standard operating costs of shopping centres which include public lighting, cleaning, heating and air-conditioning. All these costs are in addition to the rent paid by the tenant. There is however now a trend towards gross rentals without the need for outgoings reconciliation each year by the landlord.

Retail shop leasing legislation in many locations imposes strict outgoings reconciliation obligations on the landlord when net rentals and outgoings recoveries are part of the lease structure. These can be avoided if gross rentals are adopted. You should however take the time to fully understand the impact of shop leasing legislation in any retail property over which you have an involvement.

The rental terms for retail property are markedly different to those that apply in the commercial and industrial sectors. In retail property you can also have turnover type rental which is calculated from the levels of sales achieved by the tenant each month in arrears. When turnover rentals are used in retail property, it is important that the turnover percentage used in the rental calculation correctly correlates to the type of tenancy and the averages of occupancy costs and profit relative to that business type.

For example food type tenants have a higher profit margin and can typically pay a higher turnover rental of 10 and up to 18 per cent of turnover. You could not achieve this level of turnover rental with a fashion tenant or newsagent tenant. The rule is that turnover rental should reflect and respect the type of business given their operating costs and profit margin.

Rents paid by large anchor tenants who have bargaining power differ markedly from those paid by small specialty shops in the same shopping centre. The rent of large anchor tenants such as may be 25% to 33% lower than that being paid by small specialty traders in the same building. In exchange for that rent concession you should expect a long term lease from the anchor tenant.