Valeria Publications

When I’m writing, I like to watch Storytime videos on YouTube – specifically, small business owner Storytimes or “Watch Me Work” videos.

And the ones that I find myself going back to are Storytimes from service providers.

When we think of service-based businesses, many industries come to mind: landscaping, electricians, auto mechanics.

Or maybe creative careers like hairstylists, nail technicians, and lash technicians come to your mind.

With many of these service-based businesses, you hear horror stories from the business owner and the customer’s perspective. Either a landscaper failed to arrive on the day that he or she said she would.

Or a client asked for a refund after a paint job was performed.

With these types of situations, having a contract in place can help. But does your small business necessarily need a contract? Let’s find out.

What Contracts Can Do For Your Small Business

As a small business owner, there are so many decisions you have to make.

Where you’ll own and operate your business.

How you’ll market your business.

Where you’ll find your clients.

So it’s understandable why some small business owners would avoid putting contracts in place before operating their business.

But this is a huge mistake.

While a contract is a legal document, it’s not as complicated as it sounds. It’s defined as a binding agreement between two or more parties (Merriam-Webster, n.d.).

When drafting your contract, you get to lay out the terms and conditions of your services. It’s a great document that can help keep you and your client on the same page when doing business with each other.

Parts of Contracts

One of the benefits of a contract is that all rights and responsibilities are clearly established.

While each contract will differ, here are the general elements that you’ll find in a contract:

• Definitions. This is the element in a contract where the titles of both parties are defined. In my contract, for example, I define myself as a “Writer” and my client is identified as the “Client”.
• Offer. This is the section that states what one party will provide for the other. Writing a certain number of blogs a week for my client, for example, would be defined in this section.
• Deliverables. This is the element of the contract that establishes the payments, goods, or services exchanged between both parties. The way that your client will pay you or the finished product, for example, would be listed in this section.
• Deadlines. This is where the deadlines can be established for service providers and clients. If you want to send an invoice to your client within a specific period, you can draft those expectations in this section.
• Acceptance. This is the section where the other party will accept the conditions of the offer.
• Consent. This is the section where both parties agree to the terms and conditions of the contract of their own free will.

Now, some contracts may include additional terms and conditions based on the industry. With freelance writing, for example, you can include a section in your contract for revisions to written works if you want to.

Accountability

So, how does a contract benefit your small business?

One of the biggest benefits is accountability. You and your client will be responsible for following the terms and conditions of the contract.

Even though you can’t control what your client does, you can rest easy knowing that there is a legal document in place that can help hold your client accountable. Should they fail to follow the terms and conditions, you can pursue legal action against them.

Clarity

Another benefit that you get with a contract in place is clarity. Contracts take the guessing away from you and your client.

Now you both know what is expected from both of you and what to do if unexpected situations happen.

Let’s say you’re a copyeditor and there is a contact between you and your current client. In your contract, you promise to have a manuscript edited by a certain deadline. As the deadline is approaching, you start to realize that you won’t be done by the deadline that was agreed upon.

You can include a section in your contract that prepares you for situations like this. You can write a section in your contract that states that you will communicate with the client and request additional time.

Credibility

Finally, having a contract in place makes you more credible as a business owner.

Even in this entrepreneurial era that we’re in, some people still have negative opinions of small businesses. Some people are still quick to label small business owners as unprofessional.

Having a client sign a contract before performing any work lets your client know that you take your business seriously. It also prevents you from wasting any time with clients who aren’t so serious.

If a client has a problem signing a contract with you before any work is performed, that is a red flag. It’s the best confirmation that you are not supposed to work with that client.

Final Thoughts

If client retention doesn’t matter to you, don’t worry about creating contracts.

But if you’re someone who wants to maintain great relationships with your clients, look into forming contracts for your business.

There’s not a problem that can’t be solved with a contract in place. You and your client will know what’s expected of each other, what services will be performed, how you will be paid for your services, and what should happen in the event of an unforeseen situation.

And if you or the client forget for whatever reason, you can refer back to the contract. Even if something must be changed, you can rewrite a portion of your contract with the updated changes.

If you need someone to draft a contract for your business, you can click on my Contact page and book a consultation.

How do you feel about creating a contract for your business? Share in the comments section below.

Sources:

Merriam-Webster. (n.d.). Contract. In Merriam-Webster.com dictionary. Retrieved April 3, 2024 from Contract Definition & Meaning – Merriam-Webster.