When you make your proposal to the client, you need to make it clear that you are an agent, not a principal. The client accepts the responsibility for all costs incurred for work they approve.

You get paid for what you do. Suppliers get paid for what they do. If someone screws up, there is no liability on your part. It's the client's problem.

Your job, and your reputation, are based on your ability to select suppliers who won't screw up, to manage them and provide the necessary oversight and leadership to make sure they deliver what the client has requested. But you cannot and should not accept financial responsibility for someone else's performance.

If your client can't handle that arrangement, then they should try to find another agent who is dumb enough to swallow the full responsibility and guarantee the performance of suppliers outside their control.

It's all in your agreement with the client. Michael covered the main points, but when we first launched, we had the issue you pointed out...PRINTING...we did a press check, blue-line...everything, but when the cutting and binding was finished...oops.

Yes, we were in trouble.
Yes, we were on tight D/L
Yes, we stood to lose $$$

But, NO...we were not responsible.
This is where working with credible suppliers becomes critical. Our printer spotted the issue before we woke up the next morning, and had them bind the over-run, which was enough to satisfy the client for a couple of days. We reprinted (printer picking up 100%, because it was his bindery.

"Select wisely" (Indiana Jones)

First off, you only pay the printer a deposit, so if there is any loss, it won't be more than the deposit. The smaller the printer and the riskier your position, the smaller the deposit you should pay. Because this printer has no insurance and you don't appear to have sufficient experience with him/her, then I wouldn't pay more than 20% of the contract amount to get the job off the ground.

The balance of the contract amount is paid upon delivery of the completed product, subject to your review and acceptance. This is made a part of your Agreement with the printer and the design shop.

Secondly -- and this is also in the contract -- the print job isn't run until you *and* the client have reviewed a sample and approved it, in writing.

As tempting as it may be, don't accept rush jobs that will shortcut any of the "must do's," particularly the sample review and approval, at least not until you and the printer have gotten to know each other's habits and styles and you trust each other implicitly.

You should have a similar arrangement with your client. Get a deposit, larger than the one you pay to your printer. The burden is on the client to approve the sample in writing. If the client isn't happy with the result after (s)he approves the sample, and the sample is exactly as approved, then the burden is on the client to accept the job as is and to pay you in full.

Further, your contract with clients should always make transfer and assignment of the copyright or license to use the end products that contain the intellectual property subject to your receipt of full payment from the client.

By doing this, your client has the burden to ensure the print job is as he likes and he can't use the design until he pays you in full because the intellectual property belongs to the designer (which brings up another step in the process).

When you engage a third party designer, you should obtain a signed non-disclosure agreement, a non-compete agreement (or a non-compete clause in your Agreement for Services, assuming it's legal where you live -- it's not in California), and a Transfer and Assignment of Intellectual Property, which states that the designer is doing the work for hire and (s)he transfers all intellectual property for works (s)he will be engaged to produce on behalf of your company.

I strongly encourage you to have a lawyer (or a knowledgeable paralegal, or the equivalents in the UK) prepare the documents for you. You will also need an insertion order, of course, and I recommend that you have your clients complete a credit report. This isn't always good for business especially if you're a new company, so when you get your first check from each client, make sure you record the bank information, the name of the person who signs the check, and the checking account. This will allow you to go after the funds if they renege on the contract.

As for your service providers (designers, printers), you should always get references and call them. Ask the designers and printers to show you work they've done. Mentally make a note of the clients for whom they did the work. Call them also.