Running a successful business requires hard work and dedication. Yet, there are some easy wins that require just a little bit of forward-thinking.
Every successful business owner will tell you that running your operation requires more than just a business plan.
To have long term success, you should take every possible precaution to ensure that you are covered from all angles when running your business.
One of the most cost-effective ways to protect your business is to include a smart arbitration clause in any contracts you sign.
That will give you recourse to justice when you are owed money without the costs and time wasted on a civil lawsuit.
You can download Ejudicate’s free arbitration clause template and tailor it to your business needs to ensure swift, effective, reasonable, and legally recognized access to collect money owed to you.
But before we get into that, let’s delve into the various approaches to running a successful business.
Don’t start too big – be realistic and be ready to scale up
One of the reasons why businesses fail is that they start too big, and when demand for their products or services does not meet expectations, revenue falls through the floor.
This can cause a cascading effect. For example, your business would be committed to buying quotas of supplies or services, and you may not be able to keep up with payments.
When you start a business, you should keep your feet on the ground, ensure realistic expectations, and be ready to scale up quickly.
Access to liquidity matters, and getting your receivables current is critical.
Stick to your plan – but be ready to pivot and adjust
If the Covid Pandemic taught us one thing, it is just how resilient some small businesses have been.
Profitable businesses were suddenly faced with having to radically change their business model or face going out of business.
The stories are pretty incredible, ranging from airlines switching to flights cargo only, clothing manufacturers switching to creating masks or gelato makers pivoting to make hand sanitizer… the list goes on.
On the flip side, businesses that were not agile went bankrupt.
The Wall Street Journal reported that in the first year of the Pandemic, an extra 200,000 businesses folded.
Protect your cash flow with an arbitration clause
Cash flow is the lifeblood of any business, and to run a successful business, you should always make sure that you always have a steady liquid income.
If cash flow dries up and you cannot pay for stock, bills or wages, your business will fail.
As a business owner, you will probably have experienced situations where you are owed money for invoices, and people do not pay up.
What are your alternatives? You would probably think of a civil lawsuit or debt collection agency.
If you pursue a (relatively) small debt in the civil court, it will take years to recover.
By the time you have paid legal fees, sweated blood and tears, and dragged yourself into court 20 times over three years, you will return cents to the dollar.
Debt collectors will be a waste of time and money, too. You would have to sell the debt off to them at a substantial loss, or the sum of fees you would incur could end up being more than what you are owed.
So is there any real alternative? Yes, and the courts recognize it and encourage it.
The civil courts were in a mess before Covid, and since the Pandemic, the backlog of cases has grown worse with the waiting list exploding!
The solution to this problem has been the endorsement of arbitration clauses by the courts. In fact, by way of example, the Department of Transportation has now made it obligatory for arbitration clauses involving interstate moving companies.
As more time goes on, more industry sectors will need to have a mandatory arbitration clause in service contracts to alleviate the building pressure on the courts that leads to delay and hyper-expensive costs.
What is online arbitration, and how will it help me run a successful business?
Online arbitration is a form of online dispute resolution. The process is simple. If a clause is included in a contract, a plaintiff can file against a defendant online using a dedicated platform.
Ejudicate is the online arbitration market leader. Its platform is 100 percent online and is cheaper and quicker than traditional brick and mortar institutions.
Ejudicate turns around a typical arbitration claim in 45 days, compared to 410 days in traditional arbitration.
A typical claim will be 80 percent cheaper than traditional arbitration and will typically cost you no more than $1,700.
With an arbitration agreement in place, you can get the money you are owed and put it back into your business, where it belongs.
Ejudicate makes it easy with its process involving six easy steps. First, you simply upload your claim and any supporting documents and evidence, and the defendant submits their counter-evidence.
If they do not do so within the stipulated time frame, they will find themselves in default, and an award will be made against them.
If they do contest the claim, an impartial EJudge is assigned to decide the claim, and they rule in your favor, and you prevail, a final and binding arbitration award is rendered.
This can be filed in a state courthouse to be reduced to an enforceable judgment. (Binding awards are issued if the agreement calls for a binding award.)
The entire process is managed on its proprietary online platform, from filing a claim to discovery and a final decision.
The question is: Do you have a valid arbitration clause in your financial contracts, if any at all?
Where can I find a template for a standard Arbitration Clause?
But essentially, dispute resolution clauses should have the following (or similar) text included: “The parties to this contract hereby agree to resolve legal disputes exclusively through binding arbitration”.
The above text means parties agree that arbitration will be a legally binding process that can be used if a dispute arises.
Ejudicate offers a free-to-use arbitration clause example that you can customize to suit your needs.
The arbitration clause sample comes in both long-form and short-form.
Including an arbitration clause or provision in your contracts ensures that you are serious about collecting unpaid debt and leaves no room for confusion.
Are you ready to recover what you are owed?
Ejudicate has helped small and large businesses across the United States recover debts that were simply not worth the cost of traditional litigation or arbitration if not for online dispute resolution.
Register now on our online portal. If a dispute arises, submitting your claim is a simple process, all for a flat upfront fee.
Satisfied and repeat participants include electronic commerce sites (Fintech), factors, banks, MCAs, and other lenders.
Ejudicate also handles all types of monetary disputes and declaratory relief actions such as quiet title, coverage claims and warranty claims.
Our screened network of Ejudges spreads across all 50 states, and each case is matched to the jurisdiction and subject matter expertise of the Ejudge.
Ejudicate is a market-leading online arbitration platform in the United States. Our 100 percent online alternative dispute resolution platform helps businesses protect their contracts and agreements through online arbitration. Follow us on LinkedIn or Facebook for updates and news about online arbitration and more.
*Ejudicate cannot and will not give legal advice on any matters, financial or not.