Once you have customers (your first priority) you will need contracts
(your second priority IMHO).

Many consultants work without contracts, figuring that if they are gonna
screw you they will do it anyway.  Other people call these types fools,
but there are proponents of each method.  I won't argue about it but I
have a standard contract.  In any case you need a clearly stated written
scope of work for each project that outlines the deliverables, the fee,
when the fee will be paid, and what happens if it is not paid on time, and
which deliverables will be withheld against payment.

A great place to start is NOLO.COM.  They have a lot of info on standard
contracts.  They have a standard cotnract book, available for less then
$25, that has standard contradcts for consultants and so on.  I won't send
you mine, becuase you are better off starting off with NOLO.  Get their
book, read it, get a standard contract started.

Then pass the contract by your barrister (since you are in Britain, and
the NOLO site is really written under US law)  and tell him to tailor it
to British law.

Way down the list is the fun stuff, setting up your office and shop.  Do
that later.

You may need Professional Liability insurance jsut to operate at all.  In
electronics, this is often not done in the US.  But Professional engineers
that work on public buildings, such as structural engineers, absolutely
must have liability insurance or their clients run away screaming.

Health insurance, a no-brainer in Britain, is a huge headache for small
business owners int he US.  Some small businesses have other forms of
insurance, such as key man insurance or liability for outside personnel
who might be on your premises.


-- Lawrence Lile





jsand <john@JSCONTROLS.CO.ZA>
Sent by: pic microcontroller discussion list <PICLIST@MITVMA.MIT.EDU>
12/08/2003 04:20 PM
Please respond to pic microcontroller discussion list


        To:     PICLIST@MITVMA.MIT.EDU
        cc:
        Subject:        [OT]: Starting up as a small design shop


Hello Steve & PIC.ers,

I could write books and bore y'all to death with my business background.
20 years of it, pleased as can be, these days.
In days gone it was a different story...

Be prepared for `upsets', like customers with endless promises of
1.    Repeat orders of product (never comes).
2.    We owe you, but you're a small outfit so it can't hurt you to wait.
3.    Sure, you've finished this fandangle the way we asked, but it's
        no use to us if it doesn't have these mods done first.

As others have said, I suppose the best insurance is to have committed
customers in whom you have confidence.

That's to start off with, then ask yourself
`Does this customer expect me to work exclusively on their behalf,
on products meant for them alone?'
`What will their attitude be if I find others who would like to buy the
finished item from me?'   (naturally, these folks are their competitors).

I've concluded there are two extremes in financing the development
of a new product.
Case    Alpha.
    Customer pays the lot up front, no questions. He's confident of a
return.
Case    Omega.
    Developer funds the project, hopes to sell end product & make profit.

In case Alpha., customer owns everything & scores providing the product
takes off.
In case Omega., developer owns the product and wants only to sell it a
price
point that gives him the maximum return over a chosen period,
life-of-product
or suchlike. Down the list of priorities comes the welfare of the original
client.

Judge your customer carefully, see where they fit in this spectrum.
Do *they* have a proper understanding of these issues?
Both of you can easily be in a cuckoo-land of misunderstandings before
you even start.

nuff said,  enjoy

        best regards,  John


email from the desk of John Sanderson.
JS Controls, PO Box 1887, Boksburg 1460, Rep. of S. Africa.
Tel/Fax 011 893 4154,
Cell 082 741 6275,
web    http://www.jscontrols.co.za
Manufacturer & purveyor of laboratory force testing apparatus &
related products & services.

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