Estimated Read Time: 4 Minutes
As a small business owner, contracts are a critical component of success. Listen, and listen clearly – if you are out here on Al Gore’s Internets doing business without a contract then you are asking for trouble, my friend. Point, blank, period!
Contracts or agreements or written understandings ensure the protection of your business, its services, and your relationship with your clients. Not only do contracts provide a clear framework for your business dealings, but they also help you build trust with your clients and establish expectations.
Having a contract or written agreement in place is essential for each and every small business. It sets the ground rules for any transaction no matter how big or small, and it helps avoid misunderstandings and potential disputes. A contract helps protect your business’s interests by clearly outlining the responsibilities and expectations of each party involved. Now let’s take this a little bit further, shall we?
Contracts also provide security for your business. They create an enforceable agreement between you and your clients so that if either party fails to deliver on their obligations, you will have a legal document to back up your rights. Usually, when you are facing a disagreement with a client, the very first thing an attorney will ask you is if there is a written agreement. Why? Because if there is a written agreement it will help establish what solutions are available to solve your issues.
For instance, if your agreement outlined that the parties would communicate all modifications in writing from 10 days from delivery, if not then, the delivery of the goods or services is accepted by the receiving party – this is clear as to what solutions are available if a client is claiming they should have had more time to request modifications and it’s day 15! Boom! You win that one.
Now on the other hand, if they did in fact respond with their modifications requests and you as the online consultant failed to deliver — then Lucy — you got some ‘splaining to do!
In summary, don’t get caught out here slippin’ – do what you need to do from the beginning and have a written agreement. I mean heck, some lawsuits were won because of an agreement written on a napkin.
JUST WRITE IT DOWN!
Contracts are important for creating an understanding between you and your clients. They allow you to clearly communicate the specific details of the agreement so that expectations are clear from the outset. This helps build trust with your clients and allows them to have confidence in your services. Can you think back to the last time you did not have clear communication with someone? I know I can friend! It happens so much, especially in text messages. I truly despise communicating via text messages and even DMs (direct messages) at times because you cannot refer back to someone’s tone or see their facial expressions to gauge whether or not you both are operating on the same page.
Contracts can help protect your business from litigation, a.k.a “lawsuits”. If a disagreement arises, you can forever and always refer to the contract for evidence of the agreement. This can help you avoid expensive legal proceedings and provide a clear path to resolution. Just think about it, the last time you had receipts and the last time you didn’t. For instance, if a client accuses you of not delivering the services, you can ever so politely direct them back to the engagement contract that kicked off your relationship. Now, if you do not have an engagement contract, then please do everything in your power to put in writing the things you both agreed to at the start. A basic document still helps!
In summary, contracts are essential for any small business owner. They provide clarity and security in your transactions, help ensure that expectations are clear, and can help protect you from costly legal proceedings. With the right contract in place, you can ensure that your business is protected and that your relationship with your clients is strong.
Want to learn about some key things to include in your contract? Check out this video below:
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