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New contract with suspicious agency

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    New contract with suspicious agency

    Hi Guys,
    I've been to an interview this week,
    was very positively impressed by the client,
    and the next was very happy to receive the offer via the agent.
    The contract draft came 2 days later, nothing too extreme,
    but when I started searching about the agency in the internet
    I found out that:
    A. They are relatively new (only 2 years).
    B. It's a very small agency, maybe 6 people in total,
    including the director and his wife (who is the second director).
    C. They have very little assets (~£4K) and a high debt-to-capital ratio (over 85%).

    My research on the client company, on the other hand, has only discovered good things.

    My question is: should I take the risk in accepting this contract, and if so -
    what should I make sure that's included in the contract?

    Would greatly appreciate your experienced opinion on this.

    #2
    insist on weekly payment terms to reduce your exposure to the perceived risk
    See You Next Tuesday

    Comment


      #3
      I wouldn't touch with a bargepole unless you are paid weekly in arrears.

      If they refuse then sneakily contact the client and tell them what you have found.

      Oh and if they do agree to pay you weekly and they are 14 days late in paying you, then you must down tools with no delay.
      Last edited by SueEllen; 15 September 2017, 13:33.
      "You’re just a bad memory who doesn’t know when to go away" JR

      Comment


        #4
        Small agencies needn't be bad agencies, they all have to start somewhere.

        Ask for weekly invoicing and 7 day payment terms. Tell them you've run a credit check, you have concerns around their liquidity, and that's why you want those terms.

        They might be great, so give it a try but monitor closely.

        Comment


          #5
          All of above plus get ipse + insurance to cover any risk

          Comment


            #6
            I know it's a tad different, but our limited companies (unless you are umbrella) have very limited assets and one employee. We're all still in business, does that make us bad people to undertake professional services work for clients?

            As has been said, small agencies aren't necessarily bad ones; James Kahn started his recruitment agency in a broom closet at a Regis office and whenever a client came to visit, he'd take them out for coffee instead of "showing them around".

            I would say payment to be conducted weekly in arrears as suggested, and if they are ever late paying you then you have to just stop the work and explain to the client you've not been paid and won't be conducting any further work until that's happened.

            Comment


              #7
              Originally posted by mattfx View Post
              I know it's a tad different, but our limited companies (unless you are umbrella) have very limited assets and one employee. We're all still in business, does that make us bad people to undertake professional services work for clients?
              Firstly, not all of "our" limited companies have very limited assets. If you are building up a warchest in your company, then nor would you - depending on your definition of "very limited", of course.

              Secondly, what's the debt to capital ratio? How much debt have you got in your company compared to the assets that you have? I'd guess that it's low or nothing.

              Thirdly, where is the risk to the client? If you go bust then they find someone new; if the agent goes bust then they generally go it with your money, so you are taking the bigger risk.

              Looks like you're comparing apples with oranges in your analogy.
              Last edited by TheFaQQer; 15 September 2017, 16:47.
              Best Forum Advisor 2014
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              Comment


                #8
                Thanks guys.
                Your input and opinions helped me a great deal.

                Comment


                  #9
                  Originally posted by TheFaQQer View Post
                  Firstly, not all of "our" limited companies have very limited assets. If you are building up a warchest in your company, then nor would you - depending on your definition of "very limited", of course.

                  Secondly, what's the debt to capital ratio? How much debt have you got in your company compared to the assets that you have? I'd guess that it's low or nothing.

                  Thirdly, where is the risk to the client? If you go bust then they find someone new; if the agent goes bust then they generally go it with your money, so you are taking the bigger risk.

                  Looks like you're comparing apples with oranges in your analogy.
                  ^^^ This, you can't compare the two.

                  Comment


                    #10
                    Originally posted by CountryGirl View Post
                    Thanks guys.
                    Your input and opinions helped me a great deal.
                    So, what did you do? How was this resolved?

                    Comment

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