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Do you have a contract for your services? I’m hoping the answer is ‘yes’. In addition to providing you legal protections, a contract is your first official communication tool with your client. It’s where your financial relationship starts and the ideal place to outline your services, fees and payment expectations. A well-written contract can save you from a lot of heartache later on.
Think of this phase like the beginning of a relationship. You see your perfect client across the sea of social media noise and your eyes lock. You meet in the middle of the room and the stars align. Thank the heavens, your perfect client decides you’re the cat’s meow, too! You make an offer and they accept – you’re golden!
This is the fun part, I know, and it can be hard to think about muddying the waters with boring contractual language and unsexy terms and conditions. Here’s why it’s important, though: What happens when the honeymoon is over and you get into your first fight?
A contract can help alleviate any misconceptions about the relationship and lay out exactly what you and your client will and won’t do. Without a contract in place, it’s too easy to undervalue the hard work you’re putting in for your client. It’s also easy to fall down a rabbit hole of misunderstandings about the services you provide.
Basic contractual considerations
I’m sure this isn’t the first time you’ve considered your contract. Hopefully, you already have something in place that covers your interests and spells out your working relationship with your client. It may be a document you write specifically for each project or it may be the terms and conditions attached to an online program purchase. Either way, your agreement is like a user’s manual for your work. It can be an excellent educational tool, especially if you provide services that aren’t entirely understood by the client.
Professional service providers often have a hard time explaining what they actually do (think engineers and attorneys), but coaches and consultants of all kinds can benefit from a well written contract. You can make it a part of your initial client communication, so everyone is on the same page regarding your services.
A contract doesn’t have to mean pages and pages of cold, unfriendly legalese. Go ahead and search online for ‘consulting contract’ or ‘coaching contract’ and you’ll find a bunch of examples that you could tailor to your business.
- Use your contract to establish your fee. Whether lump sum or hourly, make it very clear how much your client will pay you for your services.
- Use your contract to identify your schedule. Presumably you won’t be working indefinitely, so define the length of service. You can give yourself a buffer if that’s appropriate (‘The work will be completed within 4 – 5 weeks,’ for example).
- Use your contract to specify your terms. Are you paid up front or on a monthly basis? Do you charge interest for invoices past due? Will your clients pay you in regular installments? All of these details should be explicitly outlined in your contract.
- Get your client to sign on the dotted line. All of this discussion and work to pull a contract together is no good if your client won’t agree to it in writing.
- Don’t do any work until the contract is signed (see #4).
The benefits of a good contract
These probably all seem obvious, don’t they? You’d be surprised how many people are uncomfortable pushing for a signed contract. It’s too easy to think ‘I like this person; I’m sure they’re good for the money.’ Even if you’re a people-pleaser, make a solid contract part of your protocol and don’t apologize for it!
Your contract isn’t just to protect you (although that should be your primary goal); it also protects your client. A well-written contract identifies both parties’ responsibilities and can be a great educational tool when presented properly.
Think of it this way: when you outline your fees and payment expectations in your contract, you set your client’s expectations up front and you’ll have a much easier time getting them to follow through on paying you because it’s in writing.
This may not apply if you sell programs that are paid for up front, although I would still want some kind of agreement in place. If you work on retainer or offer monthly services, having your terms clearly stated in your agreement will help you avoid any unpleasant conversations later on, when it’s time to end the relationship. The last thing you want to be doing is having to chase people down for money or, even worse, taking someone to small claims court. Having a good contract in place can help you avoid both these scenarios.
Get your ducks in a row
A good contract outlines your service and payment expectations, in addition to other legal terms and conditions. Whether you’re paid a fixed fee or charge hourly, your agreement should identify what you will provide and how you’ll get paid by your client. This includes language regarding terms (do you offer terms or expect prepayment?), payment options, and what happens if your client pays late.
Do yourself and your business a favor and review your contract for financial language. Does it outline your current process? Do you need to make any adjustments to ensure you spend as little time as possible chasing payments or answering questions about your services. A well-written client agreement can go a long way toward establishing client expectations and gives you a great tool to refer to if questions arise later on.
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As always, I’d love to hear from you. Drop a comment below or email firstname.lastname@example.org.