Webcam, Mouse and Keyboard for productivity

Posted on November 18, 2020 by Angus Jones

If you are like most people, you will have bought a new PC or laptop and never considered those extra computer peripherals. After all, they probably came with the unit or were built into your laptop. Specifically, we are talking about a webcam, mouse, keyboard or even a headset or separate microphone. In this how-to guide, we will look at why you should consider spending some more money, what you need to understand about peripherals and how to buy the right item.

WebCam: A video camera either integrated or connected to a PC allowing images to be seen normally over the internet.
Mouse: A small handheld peripheral that when moved will cause the cursor on a computer screen to also move.
Keyboard: a set of keys allowing alphanumerical communication on a PC.
Microphone or Speaker: A mechanical device to turn audio sound waves into signals that can be transmitted by your PC or vice versa.

WHY should I buy a Webcam, Mouse and Keyboard?

Your brand-new PC comes with an included mouse and keyboard. Your brand-new laptop comes with a trackpad (mouse), keyboard, webcam and microphone.

However, there are a few reasons why you should consider buying a separate Webcam, Mouse Keyboard, Microphone, Headset, Speakers etc

They did not come in the box
Chances are if you bought a freestanding computer an accessory such as a webcam is not included.
Quality
A PC manufacturer will typically only ship the most essential quality accessories to keep their and your costs down. This would influence the touch and feel or how the product looks. In the case of a microphone or webcam, it will impact how you look and sound.
Ergonomics
This can be considered two ways:
- With a laptop computer, the peripherals are build-in; therefore when you use it remotely it is convenient, but if you are at home, ergonomically a separate keyboard and mouse will allow you to find a much more comfortable position
- The design and shape of a keyboard can reduce the stress and strain placed on your hands, fingers and back. Many people, after years of operating a computer develop an RSI or repetitive strain injury.
Functionality
A third party peripheral may come with extra buttons or features that allow you to become more effective. Examples include scrolling left and right from a mouse, zooming a webcam, and pressing a button on your keyboard to open an app.
Durability
A cheap accessory is built to a price, and its performance may deteriorate quickly with use. Ensure your products will survive a fall and potentially put up with the abuse from working at home.

More and more people are now working from home (COVID has undoubtedly accelerated that) but for most small businesses that was already a reality. However, what has changed is the use of your computer to make video and voice calls. To be seen as a professional, you need to ensure your video image is sharp and your voice is heard clearly.

WHAT do you need to know about computer peripherals?

An essential product we have not covered in this guide is computer monitors. We have a separate guide available here. If you are also in the market for a new computer, be sure to check out our guide on buying a new PC.

No matter what accessory you buy for your PC, they will be connected to your PC in some way and also powered. This is likely to occur in one of two ways.

A wired connection will pass information back and forth and also provide power for the device. The advantage is you don’t have to worry about batteries or to recharge. Still, you do have to worry about an ugly cable. You also need to consider whether your PC has enough USB sockets or buy a hub (same concept as a power board).

The second method is a wireless solution that will typically connect to your PC by Bluetooth and require disposable or rechargeable batteries. The significant advantage here is no cords, especially for a mouse.

HOW to pick the right Webcam, Mouse and Keyboard

Below we have listed the key features you should consider when buying a:

Webcam

Quality of video capture. Measured as resolution and frame rate. Look for HD or Full HD at 30fps.
Field of view. Measured in degrees will determine if you are captured as a wide (> deg sees more of the room) or closeup shot.
Autofocus. Ensures the image of you is clear
Light correction. If you are in a dark or bright room, how well the camera compensates
Quality of lens. Glass is better
Compatibility with Zoom, Teams, Skype etc
Mounting. Does it come with a bracket to attach to a monitor or tripod
Microphone. Determines how you sound and what other noise is picked up. Consider a stereo mike for natural sound with noise cancelling.
Software control. Manual adjustment, video capture, and even changing the background, so people do not see your unmade bed.

Mouse

How you hold the mouse – fingertip grip, palm grip or claw grip. Also consider if it will be small enough to travel with if required.
Feel – comfort, scrolling action and buttons
Cable or wireless
Sensitivity – for precision mouse movements if editing images, video or audio. Measured in Dots Per Inch, look for one with at least 1200 DPI
Will it work on different surfaces?

Keyboard

Cable or wireless – if wireless consider battery life
Compatibility with Windows PC or Apple Mac
Extra function keys – to open apps or perform tasks
Ergonomics of keys – position and feel
Sensitivity and noise – avoid mistypes and disturbing others
Do you want illuminated keys for night use

Headset

Over-ear – on-ear – in-ear. – Personal preference
Sound quality
Comfort including lightness and after long periods
Fashion – How will you look on a video call
Microphone quality and placement
Features including mute, volume or even noise cancelling

Microphone (stand-alone)

More expensive the better you sound
Usage – video calling versus recording a podcast
Size
Does it connect via USB or 3.5mm jack and include software to adjust the sound
Portability if you need to travel

Speakers

More expensive may not mean better but cheap is generally cheap
Do you just need noise or will you also listen to music
Cable or wireless connection
Dedicated volume and possibly base control
How big and how do they look
Other uses such as a smart speaker
How loud they are, measured in wattage
Try to listen before you buy

HINTS

If you are in the market for a new computer accessory, unfortunately, you are unlikely able to test drive it at your local retailer or office supply store. We do recommend you visit our sister site Gadgetguy.com.au for unbiased reviews and comparisons.

The key players in the peripherals market are Microsoft and the key PC makers themselves like HP and Dell. Still, we highly recommend you check out the vast range available from Logitech. The latter specialises in this market and make products to suit many needs.

SUMMARY – Improve your PC productivity

Buying a new Webcam, Mouse ,Keyboard etc for your computer is one of those things that you do not know what you are missing out on until you experience what better looks/feel like. The accessory may seem expensive but remember it is the primary connection for you to connect with your PC and possibly your customers.

When deciding what to buy always consider what you need, how it will help your productivity, improve your impression on others, and be more comfortable for you to use.

PR to grow your business

Posted on October 19, 2020 by Angus Jones

If you want to grow your business, several marketing options can help with that! One of the most cost-effective ways of promoting your business can be by doing public relations activities. In this guide, we will look at PR to grow your business, give you some of the secrets from a PR expert and the steps to get some free promotion potentially.

Public relations or PR is the strategic action of intentionally managing the release and spread of information between an individual or business and the public.

WHY should you use PR to grow your business?

PR to grow your business is one of the best ways to promote your business. Because it goes one step further than advertising by showing your audience the best parts of your business instead of just telling them about it.

It says to your target market: a journalist, publication or influencer chose to support or seek out the advice of this business. Therefore, they must be top of their field.

In short, it drives trust.

WHAT do small businesses need to get started?

An understanding of your value

Businesses should think about what value they can add, especially if that value is unique to them. Ask yourself: how my particular skills, produce or service, and experience help people?

A clear plan

Assign a chunk of focused time to create a PR plan. Start every PR campaign with a period of preparation that includes creating ideas, developing strategies, lists of media angles, and target publications.

A newsworthy pitch

Once you know your value, you’ll need a newsworthy pitch. Make sure your pitch is relevant to the publication, tugs on the right heartstrings, and is backed by credibility and authority. Most importantly, the pitch should have some kind of newsworthy hook that ties into an existing news story, zeitgeist, or cultural shift.

Supporting material

Anticipate what the journalist might need to tell your story, and make sure you give it to them upfront, to make their life easier and save time. Think high-resolution images, b-roll footage, case studies, company backgrounders, and the names and bios of the people available for interview.

The confidence to get started

Just start – you’ll get the hang of it. Don’t wait for big ideas, instead look for consistency in small things done well. The quest for perfection will kill any hopes of PR success dead in their tracks.

HOW do businesses achieve killer media coverage?

Give journalists a great story

If a journalist can tell a story without your help, they will. So if you’re pitch is so generic that any old journalist could write it, they’ll either simply do it themselves without including you in the piece, or write it off completely.

Present them with something that they haven’t thought of before, or that adds more colour to a story. If you happened to come across this story in real life, would you stop what you’re doing and pay attention? If not, then you might want to rethink your idea.

Find out what area each journalist covers (known in the trade as their ‘beat’), and make sure your pitch is tailored very specifically to their requirements.

Make sure you’ve got the right pitch for the right person

Are you offering an advice article when they only do interviews? Are you offering an interview when the bulk of their publication is made up of advice articles? Are you writing something targeted at schools, when this publication is targeted at parents? Are you approaching an editor that only considers stories that come with financial information, video footage, or case studies? Are you pitching a breakfast radio producer an interview with someone who is not available until 11am?

There are so many media-specific standards to consider that it always pays to do your research thoroughly. Suppose you pitch something that’s not relevant. In that case, your idea will likely be ignored, and you risk permanently damaging your relationship with a journalist.

Even within the same publication, different journalists will have different needs. Find out what area each journalist writes about (known in the trade as their ‘beat’). Make sure your pitch is tailored very specifically to their requirements.

Become a credible, reliable source

News outlets need reliable, credible experts that they can call upon at the drop of a hat. Suppose you’re not known to the journalist when you first approach them. In that case, it might take some convincing to persuade them that you’re a credible source of information. It’s your job to show them that you’re trustworthy and that you don’t have an ulterior motive.

The best way to make this happen is to ensure you have something original and unique to say. Suppose you can be more interesting and more engaging than your competitors. In that case, a journalist is far more likely to take the risk.

Maximise your coverage

Once the coverage is achieved, it’s essential to maximise the coverage as much as possible. The first few days after a piece has gone live is the most critical window of opportunity for sharing on social media, but don’t stop there. Even if your coverage is months or even years old, there are still lots of chances to post it. Keep an eye out for new news stories that relate to your own, and use it as an opportunity to add to the conversation. Jump on the ‘flashback’ bandwagon, especially if you’ve got a piece of coverage which is about to celebrate its first birthday.

HINTS

Always avoid clickbait or going in for a hard sell. Be generous and give value, because that is who people want to do business with.

Journalists are incredibly time-poor, so it’s critical to time your pitch perfectly. If you send an email on a Friday afternoon at 4 pm, there’s little hope that your story will ever see the light of day.

Make your pitch as interesting as possible. Present the journalist with something that they haven’t thought of before, or that adds more colour to an existing story.

Make sure your pitch is tailored to their magazine, program, site, newspaper or section – and to the individual journalist’s particular focus or interest.

SUMMARY – PR to grow your business

Just because you know how great your business is, that doesn’t mean anyone else will go out of their way to find it out too. Instead, you need to make it as easy as possible for a potential customer to figure out why you’re the best in the business.

PR is a great way to get your business’s story out there without resorting to overt sales tactics or showy advertisements.

This guide was contributed by Phoebe Netto of Pure Public Relations.

Business Technology for set up

Posted on September 4, 2020 by Angus Jones

As a small business owner, you need to be a jack of all trades. One of the hats you need to have is head of IT or Information technology. In this guide, we will look at what technology you will need to buy to establish a small business.

Information Technology or IT is the use of computers and telecommunications for storing, retrieving, analysing and to share information.

WHY should I invest in business technology?

Technology will allow your business to run efficiently and make your business look more professional.

It will enable you to communicate via a mobile phone and email. You will have the ability to create documents and print them. IT will allow you to control your finances and time. You will be able to safely store and share information and lastly be found and possibly sell on the internet.

So, put simply, what phones and computer stuff do I need to buy then set up to help run my business !

WHAT business technology do I need to buy?

Below is a checklist of technologies you will need to consider for your business and a link to find more information on selecting the right option:

What technology do I need for my business?

Mobile Phone. Features that will help make a difference in running your business.
Mobile Phone Plan. Consider coverage, data inclusion, & value for money.
Computer (PC). Demystifying the jargon to help you buy the right computer.
Computer monitor. Size vs cost vs quality for your business type.
Office Productivity Software. For producing documents, presentations, spreadsheets, databases, charts, and graphs.
Cloud-based software. Solutions to help you run your business, like accounting, payroll, staff scheduling, databases etc.
Internet Plan and Provision. Reliable broadband at a speed and capacity that suits your small business.
Internet security. Take precautions against a cyber threat to your computers.
Network or WiFi. Allows your office to share resources like the internet or a printer.
Storing and sharing files. Collaborate with staff, customers and suppliers.
Backup. Protecting your data if the worst should happen
Printer. The cheapest one may cost you more!
POS System or terminal. If you are in retail, a café or restaurant you will probably need one.
Website domain and email. Creating an identity and allowing you to communicate on the internet.
Build a website. To boost your brand and help you sell.

HOW do I decide what technology to buy

All of the 15 items on the checklist above have their own Small Business Answers Guide to help you make the right decisions on what to buy. Be sure to click on those links.

If the whole process is still too much for you, we suggest you speak with an IT retailer or engage the services of an IT support person or organisation. See our guide on IT Support – help with technology

HINTS

Now I know you want the latest and best smartphone and computer but carefully consider how much all this will cost before you go crazy with the credit card. Also, consider exactly what you need as you don’t have to buy everything on the first day.

If you believe you will expand and hire more staff, you can always pass technology down and invest in an upgrade for yourself.

The reverse of this, be careful of buying something that does not suit the job. For example, a cheap printer that is not up to the volume means you will be back out purchasing a higher specified printer.

Reviews of specific products can be found at our sister website Gadget Guy

SUMMARY – Setting up your office tech

Buying technology can be a very daunting experience, mostly due to the cost associated with it. It will, however, allow you to operate more efficiently and professionally. The 15 step checklist and the associated 15 guides will give you the confidence to make the right decisions.

How to create a Quote to win business

Posted on August 18, 2020 by Angus Jones

If you have not done a quote before or you just want to make yours look a little more professional, then read on. In this guide, we will look at how to create a quote to how to make yours stand out just that little bit more.

A business quote (or quotation) is a document in which you describe the requested products or services and provide your customer with relevant pricing. In most cases, it is written as a response to a request for pricing, when a customer solicits your service or product.

Why should you formally quote a customer?

A quote can be used as a legal document for the price and serves as a contract. This means that in the event of a dispute, you have clear correspondence on what was offered and what should have been provided. If you have quoted verbally or on the “back of an envelope” it is unlikely that will help you in a dispute.

A professional looking quote will also give your business credibility. The customer will have more confidence in you and your ability to deliver.

A quote also enables you to carefully consider your costs of completing a job, so may help you calculate your selling price and more importantly, your profitability.

What do I need to know about quoting?

Quote vs estimate. An estimate is purely that and usually is given when the final cost is unknown due to circumstances that cannot be determined. An estimate is not a formal contract. As long as it is labelled correctly will not have the same legal obligations as a quote. If you issue an estimate, we recommend you also add the words “Pricing is subject to change”.

Always listen carefully for what the customer has asked for and quote accordingly. If you do not, you run the risk of immediately being discarded. Be careful to quote for only those products and services that you understand and can deliver.

Calculating your quote pricing is tricky. Overquote and you will not get the business, underquote and you will lose money.

How to create a quote?

If you frequently deal with quotes, you should create a template with prefilled content that you can use to save you time. Your template should be clean looking! It should demonstrate your brand identity to help differentiate you from other quotes the customer may have received.

How to create a quote?

Quotation header
Reference your company’s name, contacts, ABN number, quotation number and date, payment terms, conditions, and the name of the recipient. The word “Quote” or “Quotation” should be written at the top of the page.
Quotation body
Describe the goods or services you are proposing, any quantities and a breakdown of the costs.
Quotation footer
Include the total amount of all items, including GST amount, and if there is any expiry of the quote. This is where you would also list any preferred payment methods.
Operational section
Optional is a section for a customer to accept the quote which could be as simple as a space for a signature and date.
Work Schedule
If there is a work schedule or a timeline of tasks to be completed, you may wish to include this information.

No matter how hard you try, words may not be sufficient to describe your product. This is especially true if it is unique and uncommon in the market. You should consider including a picture or two or a link to a video of your product.

See our guide on getting graphics done for ways of creating a company logo to improve your image.

Following up a quote with a customer might just close the deal.

Hints

If a customer asks for a proposal, then a more detailed document is required that will explain HOW you plan to achieve the work. You would need to demonstrate a full understanding of the customers’ existing problem and offer a specific solution.

You may wish to offer some call to action on your quote to close the deal sooner or encourage the customer to pay upfront. This might include a discount, a free offer or merely an expiry of this deal (customer feels they may miss out).

Having a reasonable price is only part of winning a quote. Your reputation goes a long way as does customer service. A simple act like reacting faster to customer requests, especially in providing a quote quickly can make all the difference.

Suggested templates can be found here.

Summary – How to create a quote

A written quote is a legal document that can help solve any disputes. It shows you run a professional business and clearly outlines costs to a customer for your goods and services. By putting extra effort into your quotes, you may be able to win additional business and make yourself more profitable.

Privacy and Protecting Personal Data

Posted on July 21, 2020 by Angus Jones

It may seem harmless that in the process of doing business you collect customer data to transact business or communicate with them. However, if that data is used without the user’s permission, or worse stolen, you may find yourself breaking the law. This guide will help you understand Privacy and Protecting Personal Data and what you should or must do.

Data protection is to secure data against unauthorised access. Data privacy is about authorised access — who has it and what you can do with it. Data protection is essentially a technical issue, whereas data privacy is a legal one.

WHY should I protect my customers’ personal data?

Apart from the fact that a customer will not be very happy with you, it is the law. You must comply with the Australian government Privacy Act 1988 if your annual turnover exceeds $3 million.

You are responsible for protecting your customers’ personal information from:

theft
loss
unauthorised access
modification
interference
misuse
disclosure

If your small business turns over less than $3 million you must comply with the act if you are a:

private-sector health service provider
business that sells or purchases personal information
contractor providing services under a contract with the Australian Government
credit provider/credit reporting body
residential tenancy database operator

All other small business operators are exempt from the Act however protecting your customer’s data is good business practice.

WHAT types of information are considered private?

Any information that can identify a person and could include:

name
signature
address
email
telephone number
date of birth
medical records
bank account details
place of work
photos
videos
information about their opinions

If you do have a breach of personal information you need to notify both the person it has affected and the Office of the Australian Information Commissioner (OAIC).

HOW do I protect customers personal information?

The following actions will assist with your compliance of the Privacy Act:

Do not collect personal information you do not need
Develop an internal policy to handle and process personal information
Take ownership yourself or delegate to a senior member of staff
Do not share this data with anyone else
Sensitive information like race, religion, health etc can only be collected with individual consent
Ensure unauthorised staff members do not have access
Take reasonable steps to protect personal information from unauthorised access, modification, or disclosure and against misuse, interference, and loss
Destroy or de-identify personal information when it is no longer needed
Develop a plan for a data breach

HINTS

If processing credit card transactions by EFTPOS or e-commerce store you should ensure your network/equipment is secure and encrypted. You should restrict who has access to that data and preferably do not store the card information. A security assessment of cardholder data can be done here.

If you plan to contact customers via direct marketing like an email, phone call or text, post, social media or web advertising you should enable a customer to opt-out (request not to be communicated with). If the Privacy Act covers your organisation (> $3m turnover) legally you are required to allow a customer to opt-out.

Australian privacy law gives a consumer the right to access their personal information. This includes their health information. This right does not extend to commercial information.

Be sure to read our guide on internet security.

Additional information on privacy and protecting personal data can be found here.

SUMMARY – Privacy and Protecting Personal Data

If your small business has a turnover less than $3 million it is unlikely you will have a legal requirement however for both your customer and your sake it is good practice. If possible don’t keep personal data like credit card details but if you do, ensure it is protected from theft or abuse. It is worth familiarising yourself with the intent of the Privacy Act and taking the necessary actions in your business.

Marketing to grow your business

Posted on July 14, 2020 by Angus Jones

There is a very good chance you are already doing marketing because a lot of it is common sense. For a small business, it lets people know you are in business and gives customers reasons why they should do business with you. In this guide, we will look at the basics of marketing and give you an action plan to develop some further plans.

Marketing refers to activities a business undertakes to sell more of a product or service. Marketing includes researching, advertising, selling, and delivering products to consumers or other businesses.

The simplest form of marketing is how you answer the phone or what you wear through to a complex integrated plan across newer mediums like the internet or older like radio advertising.

WHY do I need to do marketing?

For any small business to succeed you need customers who know or can find that your product exists and who trust your business enough to buy your product.

Marketing helps by looking at your business and adjusting how customers perceive your business.

Assume you are starting a new small business to paint people’s houses. You are a very good painter and plan to charge competitive rates. Imagine if you did not return phone calls, turned up to do a quote in dirty clothes and quoted by writing a price on a scrap of paper. The customer does not know if you are a good painter and interprets you as unreliable with poor attention to detail and therefore they don’t trust you to paint their house. Thus marketing is key to present your business the right way.

WHAT are the 4 Ps?

The 4 P’s describe how important it is to present a complete package to entice a customer. You cannot do just one of these and consider it is marketing instead you must do all 4 in some form, all working in harmony to drive the optimum result.

Product

To be successful in business you need a product or service that is needed or wanted by the end-user. You ideally find an opportunity or problem that needs a solution and has a market large enough to sustain providing a product or service. You cannot always design or build your product or service from scratch but you can pick the best product or solution to sell that best meets that need. The better your product or service is compared to competitors as seen by the consumer will give you an advantage.

Price

Many people work on the principle that the cheapest price wins the sale. Whilst this is often the case, it is not always and indeed you can easily under-price a product making people think it is not high enough quality or an uncool purchase. Make sure you do your homework to ensure you price correctly.

Place

Place refers to how you get your product to market. Where is it sold? A retail shop, a direct visit to the customer, or perhaps an eCommerce store. It is important to consider the best place or places to sell to be most successful. It is important to actually have what you sell available and understand the effect of selling in different places can have on one another. Having a product that you want to sell in a supermarket is no good if you can’t supply it or the supermarket will not put it on the shelves. Also, imagine what the supermarket would say if they found you selling the same item cheaper on your eCommerce store.

Promotion

Many confuse promotion or advertising as the only function of marketing. Without the other 3 P’s your likelihood of success is very slim. This starts with how you present your business from your website to business branding, your work vehicle, how you dress, and the way the staff answer the phone. Next is how you create awareness of your business which could be advertising, public relations, social media, and the content (words) you create to reinforce this. Last is understanding if the promotion you are doing is working and looking for ways to improve it.

HOW do I create a marketing plan?

A marketing plan is a systematic approach to work through developing products and services to fulfil customers’ needs.

A marketing plan should include the following elements:

Business Summary – Apart from an overview of your business the most important aspect of this section is to do a SWOT. See our full guide on developing a SWOT. In summary, SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is an excellent method to analyse your competitive position and get a clear roadmap of how to help you get to your marketing destination.
Marketing Objectives – This is a clear list of marketing objectives (not business objectives) that outline the strategic steps you will need to follow to reach the goal you hope to achieve.
Target Audience or market – Ideally, you will have the aid of some sort of research that will help you define the industry you are selling to. An analysis of your competitors, and a description of your ideal customer. Age, location, income, or interests can segment the customer.
Market Strategy – It is now time to take what we have collected in the first 3 points including the SWOT, objectives, and target market and using the 4 P’s we discussed above to build out the practical plan.
Budget – This is not only your plan about how much money you will spend but also how many resources you will allocate to making it happen. Your most important resource may actually be people’s time. Could marketing effort help you sell more than having that same person just concentrate on sales?
Marketing Levers – Last but not least, you know what you want to do and how much money you have, but with all the possible marketing levels you can pull which one will get you the best result. Marketing levers here refers to what marketing channels you select. Some of the more common include:

Traditional Advertising
- Newspaper
- Radio
- TV
Public relations
Social media
Digital Advertising
- Keywords
- Display ads
Organic assets. Includes your website or word of mouth
Philanthropic – giving back to the community
Direct mail
Catalogues

A comprehensive template from the Australian government can be downloaded here https://www.business.gov.au/Planning/Business-plans/How-to-write-your-marketing-plan

HINTS

Use as much customer feedback as you can to improve your offer to them.

Set clear objectives around what you want to achieve and how you can achieve them.

Be realistic around how much you can afford to spend on marketing and how many people are in your potential audience.

A mentor or coach may be of value here especially if you have no marketing experience.

A marketing consultant or agency for a fee can provide marketing services to you.

SUMMARY – Marketing to sell more

Marketing is about looking at how a business presents itself and working out how it can improve on that to gain additional sales. The process involves understanding an opportunity, finding a solution, understanding competitors, identifying your market and finally realising your marketing plan.

Shareholder & Partnership agreement

Posted on July 14, 2020 by Angus Jones

You are probably reading this guide because you are at the beginning of your business venture however it could be because a partnership or shareholding has gone wrong. This guide is all about helping you get that first shareholder & partnership agreement right so down the track there is a clear predetermined plan of how things should happen.

A Shareholder & Partnership Agreement is a legally binding contract between the shareholders or partners of a business. A Shareholder & Partnership Agreement covers the funding, structure, management and direction of the business. It outlines the responsibilities and obligations of the business owners.

WHY should all partners be in agreement?

In the excitement of starting a new venture, it is very easy to put this important task aside. A shareholder agreement is to protect the multiple owners’ investment in the business, to establish a fair relationship between the owners and govern how the company is run.

It is best to put a shareholder and partnership agreement in place when the business is first established. At this early stage owners should be like-minded and if this is not the case questions should be asked why you are going into business together.

WHAT is in a shareholder & partnership agreement?

The agreement should contain important, specific, and practical rules relating to the business and the relationship between the owners.

The agreement should (but not have to) include:

define who are the shareholders, in what percentage ownership over what term
define how important decisions are to be made
describe how the business is going to be run
indicate if any intellectual property is not owned by the business
set out the owners’ rights and obligations including time spent on business
agreement on accounting processes and reporting
decide how profits will be divided and income paid
regulate the sale of shares in the business including full sale and withdrawal or addition of an owner
define dispute resolution procedures – if 2 owners have equal decision making decide how will you break the stalemate
outline any additional powers of minority shareholder/s so not always overruled on key decisions
define what constitutes a breach of the agreement and what action should then take place – possibilities include termination or mediation
include restrictions to stop shareholders from starting a new business in competition
identify how an owner may exit the business
have terms around specific circumstances like:
- Hiring and firing of employees
- Who can authorise payments
- Taking on debt
- Approving expenses

If a disagreement does occur in the life of the business and there is a clear shareholder agreement it gives a clear roadmap to move forward.

A partnership or shareholders agreement can be drawn up by a lawyer and you will find several providers offer a template-based solution that can be adapted to your specific needs via the internet for minimal cost.

HOW do you deal with conflict?

Conflict will inevitably arise with shareholders at some point in the running of a business. It does not matter how well you know your fellow owners, irrespective if they are a family, friend, or business partner it is best to have a shareholders agreement in place that you can refer to when conflict arises in your business relationship.

A lot of successful small businesses have been known to have shareholders with stormy relationships. A business relationship, whether good or bad, can have a huge impact on whether a company is going to be successful or not.

Decisions should be made through discussion, compromise and ultimately deciding what is best for the business. More progress can be made on working out how to resolve conflict rather than how to win a conflict.

Being a minority shareholder and having a shareholders’ agreement that includes the requirement for all shareholders to be unanimous ensures that you have a say in the important decisions that impact the company. This could be decisions on:

Adding or removing owners
appointment or removal of staff
taking on new debt
changing business operations

However, if all decisions must be unanimous this could cause problems and ultimately prevent your company from carrying out its business.

In a scenario when two owners each own 50% each of the business it is important to have a dispute resolution provision included. Without an agreed procedure to resolve disputes no decisions can be made leaving the company unable to operate.

You can terminate a shareholder agreement in one of 3 ways:

By mutual agreement – the original shareholder agreement should have had a provision on this
Termination by a breach – unless there are clauses for mediation of a breach in the agreement can lead to termination
One owner withdraws – the shareholder agreement should have a provision that maps out this scenario

To force an unhappy shareholder to stay in a business may cause more problems than having a new shareholder who is interested in the business being successful. Shareholders’ agreements will often include rules around share sales and transfers – who shares can be transferred to, on what terms and at what price.

HINTS

Decisions can be specified to be based on equity holdings or unanimous by all owners.

Discussing the worst possible scenarios at the beginning of your business journey and having a roadmap to resolve them will save a lot of headache down the track. The more comprehensive the better.

Owners need to enter into an agreement voluntarily.

Any new shareholder must be bound by the terms of the original shareholder/partner agreement.

SUMMARY – shareholder & partnership agreement for profit

A shareholder or partner agreement is a legal document that creates a set of rules for the owners to follow when a business is first established. It helps deal with certain scenarios that may occur in the future to reduce the chance of conflict. Those rules deal with equity, decisions, obligations and the ultimate end of the agreement. A well legally written agreement can be produced inexpensively from templates or through a lawyer.

Contracts – written legally binding document

Posted on July 14, 2020 by Angus Jones

In our everyday lives, we are always making contracts, whether it be for a new mobile phone plan, to have electricity connected, or arranging for a plumber to fix a broken pipe. In this guide, we will look at what a small business needs to know about contracts and how to write or agree to one that is legally binding.

A contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration. Contracts are at the heart of most business dealings. The agreement may be enforced in court.

WHY should I have a written contract?

A conversation and a handshake is indeed a contract. If a tradesperson writes a price on the back of a business card and you agree to go ahead with the work then that is a contract. This is all fine until something goes wrong and a dispute arises. A handshake cannot be enforced by a court.

A written contract, on the other hand, provides certainty to both parties and should set out what has been agreed. Typical items set out in a contract would include payment, timeframes and materials.

WHAT do I need to know about contracts?

A court will not enforce a non-written contract as they will be unable to prove the existence of a contract or its terms.

Depending on the type of contract being created or agreed to it may be a good idea to have a professional such as a lawyer or business advisor review or write it.

A written contract should always be used when:

The contract price is significant enough to affect your business if you don’t get paid.
Quality requirements, specifications or specific materials that have to be used.
Doubt that the hirer may not be able to pay you.
Insurance required for the type of work you are doing.
Key terms are used, such as a critical date for the completion of the work before payment.
Information must be kept confidential. See our guide on NDA’s
Legal obligation requires to have a written contract.

Beyond written and verbal contracts other contact types include:

Standard Form Contracts – is a pre-prepared contract that has most sections already filled out and there is minimal or no negotiation between the parties. Includes employment contract or insurance agreement.

Period Contracts– is used for business engagements where work is performed from time to time. Popular in building industry for contractors.

HOW do I create a legally binding contract?

For a written contract to be legally binding it must contain four essential elements:

an offer
an acceptance
an intention to create a legal relationship
a consideration (usually money).

However, it may still be considered invalid if it:

entices someone to commit a crime, or is illegal
is entered into by someone that lacks capacity, such as a minor or bankrupt
was agreed through misleading or deceptive conduct, duress, unconscionable conduct or undue influence.

A written contract will include conditions that if not met are grounds to terminate the contract and seek compensation or damages.

When negotiating the contract terms make sure the conditions of the contract are clearly defined and agreed to by all parties.

Contracts may follow a structure that can include, but are not limited to, the following conditions:

details of the parties, including ABN’s, ACN’s and any sub-contracting arrangements
description of the goods and/or services that your business will receive or provide, including key deliverables
payment details and dates, including whether interest will be applied to late payments
duration or period
definitions of key terms
ownership of intellectual property rights.
treatment of confidential information
key dates and milestones
required insurance and indemnity provisions
exclusivity agreements and restraint of trade
damages or penalty provisions
renegotiation or renewal options
complaints and dispute resolution process
termination conditions
special conditions

HINTS

Even if a contract is a low value, if it is in writing it removes risk.

You should read every word, cross out blank spaces, negotiate if appropriate and keep a copy of the contract. When negotiating be clear and remain professional.

If you are having some design work done like a logo created, the copyright remains with the designer unless the contract specifies the copyright passes to you.

Small businesses are protected from unfair terms in a standard form contract where it is for the supply of goods or services, the sale or grant of an interest in land, at least one of the businesses employs fewer than 20 people, and the price of the contract is no more than $300,000 or $1 million if the contract is for more than 12 months. https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms

More details on how to prepare a contract can be found here https://www.business.gov.au/products-and-services/contracts-and-tenders/how-to-prepare-a-contract

SUMMARY – contracts must be accepted

A written contract is a legally binding document that can be used in a court of law. It must contain an offer, an acceptance, an intention to create a legal relationship, and a consideration (usually money). The contract will include various conditions that should clearly define the agreement between the parties so there is no confusion on what will occur. If these agreed conditions are not met it is ground for termination and possibly damages.