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Long, complex contracts are not
everyone’s cup of tea, especially
not time-poor small business
owners. The thought of meticulously
reading through pages of terms and
conditions fills managers and buyers
in SMEs with dread because, unlike
big multinational companies with
teams dedicated to reviewing and
negotiating contracts, they just don’t
have the time and resources to scour
all the fine detail and linked clauses.
Many SMEs are paying a high price
as a result. Just recently the Federation
of Small Businesses (FSB) revealed that
more than half of small firms have
been ‘stung’ by unfair contract terms
with suppliers. Fifty-two per cent of
the businesses it surveyed said they
had signed up to unclear and inflexible
contract terms that had cost them an
estimated £4 billion over the last three
years.What’s more, two in five feel
powerless to do anything about unfair
terms as many suppliers are too big to
challenge.
A managed print service that wraps
all your business printing needs into
one monthly payment makes complete
sense – on the face of it. However, buried
in the small print of the contract there
could well be questionable practices that
mean small businesses end up paying far
too much for toner, ink and devices and
are locked into onerous contracts that
they can’t get out of.
So what can buyers do to remedy
this situation? How can small businesses
avoid being locked into crippling
contracts? Here are the five key questions
I would encourage all SMEs to ask before
signing a contract with a print supplier:
1
How long does the contract tie me
in for?
Many contracts are for three or
five years. In business terms, that’s a long
time, and the nature of your business
and your printing needs could change a
lot over that period. You should therefore
look for a degree of flexibility and a
service that enables you to enter into and
exit an agreement whenever suits you.
2
How fixed are those monthly fees?
Because they might not be as fixed
as you think. It’s worth checking with
your printer supplier what charges are
incurred when you exceed your monthly
printing limits. It’s also important to
watch out for an incremental price
increase, sometimes referred to as the
fixed price increment. In many cases,
this can take place at any time, without
notice.
3
What happens if I don’t use my
monthly allowance?
If you don’t use
your monthly allowance, it’s possible
that you will still be charged for the
pages you don’t actually print. In many
cases, these unused pages won’t be
rolled over to next month’s allowance,
meaning you lose out. It’s important to
have a good understanding of your print
activity and business print requirements.
If these vary throughout the year, ensure
that any agreement gives you the option
to flex from month to month or only pay
for what you use.
4
Does this service really meet
my business needs?
There is no ‘one
size fits all’ solution when it comes to
printing – every company has different
requirements. By using intelligence
gathering tools, a service provider can
accurately predict usage to make sure
you pay the right amount for your
printing needs and avoid paying over the
odds, even if needs change over time.
Alternatively, you can ask your supplier
to carry out a print audit to find out how
much you print on a weekly and monthly
basis. This will give you the insight you
need to sign up for a contract that meets
your company’s specific requirements.
Paul Callow explains what small businesses must do to avoid the pitfalls
of managed print service contracts.
When it comes to contracts,
don’t get locked in
MPS
5
Have I really read the contract?
Unfortunately, there is no shortcut to
thoroughly reviewing what you are
signing up to. Doing so takes time but
is invaluable if you want to ensure
the contract meets all your needs
and to avoid being stung later. Just
as important, you’ll need to ascertain
what the contract doesn’t contain or
provide you with. For example, does your
managed print service contract allow
you to use your existing printers? Does
it include the paper? If not, you will need
to account for this separate expense with
another supplier. If, as is likely, your print
services contract includes maintenance,
does it specify how quickly your supplier
must respond when something goes
wrong? If your printer is essential to the
day-to-day running of your business, a
delay in getting the problem resolved
could be detrimental to operations.
It’s important to check these
questions with suppliers, and on the
contract, before signing. Failure to do so
could well cause headaches further down
the line. Just because a business is small
doesn’t mean it has to settle for unfair
terms. Taking the time to scrutinise the
small print and choosing wisely in the
first place is essential to avoid vendor
lock-in and unnecessary overspend.
Paul Callow is CEO at CartridgeWorld,
the UK’s largest specialist provider
of ink and toner cartridges, including
OEM-branded cartridges and its own
compatible and remanufactured supplies.
In addition, CartridgeWorld offers a
variety of tailored printing solutions
including hardware, supplies and service.
The thought of
meticulously
reading
through pages
of terms and
conditions fills
managers and
buyers in SMEs
with dread
Paul Callow
CEO
CartridgeWorld
