This is a serious subject! There are a number of ways a business can be held at ransom. I’m going to talk about what I perceive are the five top ones. Do not think it won’t happen to you. I’ve seen it happen to nice, smart, intelligent or experienced people. Sometimes it happens because we are too trusting, too busy, naïve, don’t know your rights or just unlucky. It can happen to the best of us, and when it does, be wise and savvy enough to take action, mitigate, seek professional advice and resolve the problem.
Don’t allow your business to be held at ransom!
Ransom Situation # 1 – Bullies or Toxic Staff
As an employer, you have a duty to ensure there is no bullying in the workplace. You can be held accountable for one of your staff bullying another – even if you claim you don’t know it’s happening. I even know a business owner who was being bullied herself by her own staff member. Toxic staff are the other area. They do nothing but cause trouble, drain your energy and make coming to work (for you and your other staff) far from pleasant. Both these people can cause other great staff to leave. Replacing staff is expensive (statistically 2.5 x their annual salary). They often will scare away your customers. Do not tolerate it. There is a right (and wrong) way to manage these people out of your business – including documentation, warnings, opportunity to improve. Remember, these people are the first to run to Fair Work Australian for unfair dismissal so I often direct people to an IR/HR expert to do it right.
Having good staff starts with recruiting well. Spend a good amount of time in the interview process, testing and screening. Do quality and in-depth reference checks. Getting the right person on board is your first priority. Once they are on board, ensure you induct them well and ensure you have clear and set policies and procedures. Does your Corporate Policies doc outline your policy around bullying in the workplace? Gosh, do you even have a policies document?
Ransom Situation # 2 – Ransomware
Unlike the above, this ‘person’ has no face. Someone has hacked your system or infected a virus that locks up your data and it will only be released if you pay a sum of money. It might be $10K – it might be more. For most people their data is critical. They can’t afford to lose it so it either means a huge step backward for the business OR pay up. Here are 3 critical steps:
- Have an IT person who puts in place good virus protection, firewalls etc in place. Don’t forget your website as well. Ensure it cannot be hacked and has firewalls, backups etc.
- Consider insurance. Talk to your insurance broker about this in order to provide protection and if needed, covers the cost to recover from this situation. Remember also, if you hold confidential client data, this may be more serious than simply you losing your data.
- Backups! You need to have a backup system which disconnects. Ransomware can travel via the cloud to your cloud backup! If you use an external hard drive, be sure to unplug it as soon as the backup is done.
Ransom Situation # 3 – Contracts with Suppliers
Do not sign a contract with anyone without reading and fully understanding it. Ideally, have your lawyer peruse and review it. It’s not just the cost of the service, but the effect of what might happen if you lose that service. Websites are a classic. To the 90% of website designers who are honest, trustworthy and do the right thing – well done. Unfortunately, you have a few competitors out there who are (I’m going to say it) despicable. Websites being held at ransom is not uncommon. I’m not talking about the customer who got a great website and won’t pay his/her bill … I’m talking about the website person who locks them in for life and won’t allow them to take their business (website) elsewhere (which usually only occurs because the service is shocking). Please:
- Don’t sign anything not viewed by a lawyer or you don’t fully understand. Watch out for wording that says you can’t use another website designer, professional or competitor of this business, or where it says the website is solely owned by the designer. If the contract looks unfair or unreasonable, then get it changed or don’t sign or take your business elsewhere. Sure, you can fight it later as unreasonable, but you have a battle. If it’s in writing, it’s what counts it you have to take the matter to court, so don’t rely on verbal promises – put it in writing.
- Ensure you get a quote and that you own your website and all content on it once you pay the bill. Ensure you can take your business and the website elsewhere. If they do a good job then why would you go?
- I strongly recommend WordPress websites. They do not need ‘hard coding’ and are easy to edit yourself (simple stuff like a word change, blog addition or update) to avoid ‘extras’ invoices. Plus if you need someone to take over, so many know the system, finding a replacement is easy.
Ransom Situation # 4 – Passwords
When it’s all going sour is not the time to ask for passwords. Make it your policy that all staff, contractors and suppliers should provide you with your business passwords immediately they are set up. We are busy, so you might have your coach or marketing person set up a Facebook account, or True Local profile, or setup MailChimp. Be clear from day one that all passwords are kept by the business owner. I suggest you set up a document or spreadsheet that shows the site/item, login, password and column listing who has that password. Test you can access. That way if your assistant Mary Jones leaves, you simply run down your list looking for MJ in that column and you know which passwords need to be changed. If you ask your consultant 4 years in, after a big fight, they are sure to know you’re about to give them the boot. It’s better to change the passwords before a potentially messy termination (employee or services). Don’t forget other things like your Xero online or MYOB file. I’ve known (thankfully it’s rare) accounting professionals have a ‘dummy spit’ and hold a Xero or MYOB file at ransom – even if their account is up to date.
Ransom Situation # 5 – Customers who won’t pay and force you to keep working
This happens more in the Building & Construction industry. The tradie does a chunk of work and submits the invoice. The principal contractor or builder won’t (or can’t) pay and tells the tradesperson to keep working – to be paid in the end. Thing is you’re being held over a barrel. If you say no, you are not throwing good money after bad – but holding out can be hard. That builder or PC is likely not to use you again. However, would you ever work for them if you lost $90K? Don’t be fearful of losing that customer. Be clear up front before you start doing business with them what the payment terms are and be all over your invoicing; don’t allow it to drag out or wait till the end of a project to submit one large invoice. Be strong; in order to keep working, your accounts need to be paid. Some will beg you to just keep going and others will downright bully you. Unfortunately, bullying doesn’t stop once you leave school – it just changes form.
There is an expression: “We deserve what we tolerate.”
I am in no way saying you deserve to be bullied or held at ransom, but you usually have a choice about how you go into business, who you employ, what you sign and what you communicate. If you have Employment Agreements which says your staff cannot set up in competition against you in the next door the day after they leave, then you’re communicating what you will not tolerate. If you don’t sign an unfair contract, then you’re not tolerating those terms. It mostly comes back to communication. It might be your Policies document, your Agreements, T&C’s or not agreeing to sign a contract until it’s amended. Be clear up front, be honest, be fair and never assume because you won’t do the wrong thing that others won’t either. Finally, don’t be bullied, don’t be held at ransom and always plan for the worse, whilst of course, hoping for the best.
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