An Effective Contract
#1. Turns the sole proprietor into a corporate “we”.
I used to be little ole me, just working, working, working to make my clients happy. I was so busy I didn’t have time to breathe, let alone take weekends off or enjoy an uninterrupted vacation. So keen to build my business and make my clients happy, I would do just about anything to please my clients, even if I knew it wasn’t in my best interest.
When a client made a request of me—to lower fees, or forgo the retainer, or place an order without the deposit (the check’s in the mail) I would sometimes agree. After all, I trust people.
When I stopped relying solely on my earnest desire to “make my clients happy” with a tireless work ethic and, instead, relied on a system of Satisfaction by Design, my contract became my partner. I was no longer alone. Even as a sole proprietor, with a firm contract outlining policies, procedures and obligations, you become a corporate “we.”
#2. Provides paper courage.
A well-written contract—one that provides a detailed description of policies and procedures—is an effective partner when it comes time to have the tough conversations.
Like many of you, talking about money isn’t my strong suit. Having my hourly fees, billing, collections and retainer policies written out guides me to ask for what I need each and every time I start a new project.
For instance, when tempted to lower rates at the request of a new client, I turn to my contract where rates are clearly stated. Or, when a client asks me to give my entire trade discount away because it’s been suggested that others do that, I turn to my contract, which clearly outlines my policy for dealing with trade discounts.
#3. Provides clarity that minimizes the threat of legal action.
There’s no doubt that an effective contract protects the business owner in the event of a dispute, but far more appealing is the contract’s ability to clarify rules and procedures, and thus avoid misunderstanding in the first place.
When the contract is written in the simplest possible language, there is little doubt your client will misunderstand or misinterpret the rules of engagement. In the event of a dispute, this will work in your favor.
#4. Broadcasts your professionalism.
By identifying and committing to a specific workflow through the 15 steps, we send our customers a message: the project is in the hands of a skilled professional. Clients are then enthusiastically aware that their project will progress in a logical, systematic fashion, a rare experience in our industry.
#5. Clarifies and forecasts the most problematic situations.
An effective contract tells clients that there will be deficiencies. Guaranteed. Then, when a deficiency occurs you can remind the clients that this is business as usual. You’ll handle it and you will bill for that time, because the client would have to spend her time solving the issue if you weren’t on the job. The contract also specifies that you verify the insurance of the trades that work with you, allowing you to speak knowledgeably about the potential danger of working with anyone who isn’t expressly qualified for this type of work.
Finally, if new client’s ask you the same question re. your contract, that’s an indication it isn’t clear enough. Make sure your contract includes the answer to all frequently asked questions so your new clients will relax and understand that you’ve anticipated their needs.
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