This year has been my most eye-opening year when it comes to the legalities of running a business. In 2005, I celebrated 20 years in business. I believe up until then I just sailed though when it came to the legal aspects. Oh yes, I did everything the best I could. Don’t get me wrong and I did most things right. But this year it seemed to all hit. This year I learned the importance of “protecting my business” and this year I learned the true meaning of a “contract.” I learned the importance of realizing that it’s a business and I need to run it as such in all I do.
Contracts—Those all important contracts. If you’ve read my books on starting a business you know I always say, “Get those contracts signed by the clients before the inception of work.” I firmly believe this and stand by it. In fact, I do it 98% of the time, it’s that 2% that got me this year. It was that client who said, “You have to produce the work first. We need to approve and accept it.” Has this ever happened to you? It did me.
Even as an experienced veteran I fell for it. Attorney fees I could ill afford, tons of work and long, long hours spent, a big, “You should know better.” from everyone later. The lesson learned is once they get your product, they hold the Ace card. Keep that in mind. You lose the upper hand, the edge you had, once you deliver the work to the client. Trust me on this ... before you start a project get it signed, sealed and delivered—the contract that is. The good news is I finally did get my contract. But, the aggravation could have been avoided had I done it right the first time.
What about this scenario? You sign a contract only to discover that the project is not what it appeared to be. Something goes drastically wrong and you realize that you need to make chances to the way things are being done. Have you covered yourself adequately for most occurrences or for the unexpected? Your contract just seems like a formality that needs to be completed when signing on a new client. However, when something goes wrong that contract turns into your “BEST FRIEND!”
Designing a Contract — When I first design a contract, I do the research myself initially. You can find the tools you need on nolo.com, Google and the topic, and books and message boards. I do a very thorough search ad extensive research first. Then I write the contract to include everything I need. Think three years from now. Think the worse case scenario. I really don’t want to sound pessimistic here, but if you do, you will be protected for all cases. If you have covered yourself for the worse, then you have yourself covered for the best as well.
However, with that said, don’t go overboard. You don’t need to add everything or your points will get lost. Your clients won’t want to read through it either. For example, I just reviewed someone’s 15-page contract that was so outrageous boring I could hardly make it though. It had so much legalese and repetitive language, that everything she wanted to state was totally non-existent. You want your points to stand out. You want them to understand what you are saying.
If at all possible, get your contracts and legal documents reviewed by an attorney and let a professional be the one to look over it and see what you are missing. Yes, it’s an expense, but a worthwhile one.
With solids contracts in hand you and your business will be secure and you will be free to do what you do best, make money.