As I mentioned in my last post, most of what I blog about here at The Solopreneur’s Guide comes from real world experiences. Just recently, I’ve had a few colleagues confess that they provide services without drawing up and signing formal contracts. They thought it wasn’t necessary or they were afraid of losing the business if they took customers through the extra steps instead of simply getting down to work. And they’ve been bitten.
I’m just the opposite; I won’t start a project without one, whether it’s for consulting, copywriting or ghostwriting. Why?
Prospects want to know they are working with a pro. It’s hard to convince a new customer that they should sign the deal with you instead of a competitor if you can’t draft a convincing proposal. The one time I truncated a proposal (because I assumed the prospect and I had discussed enough details in numerous, previous conversations), it cost me. The prospect was concerned that the detail of work I was going to provide was equivalent to the condensed contract. Shame on me.
The lack of face-to-face interaction created when capturing customers on the Internet, gives the less scrupulous and cash-strapped customers an excuse to forget their obligation. While they can still stall on payment even with a contract, they are less likely to. Plus, a signed agreement gives you some ammunition if you need to go after them. Without an agreement, try convincing a legal entity to hold the negligent party accountable in a he-said / she-said argument.
Clarification of Expectations
Unrealized expectations lead to disappoint … which in turn can lead to a loss of payment and future business. While you may believe you discussed all pertinent points in conversation, put it in writing – especially for lengthy projects. After I’ve submitted my deliverables in writing, I’ve had prospects responded with new questions … and this is after an in-depth interview. Make sure the scope of work is clear and agreed to before getting started.
Here’s the top 10 quick list of items I include in my template agreements:
- Names of the principals involved with current contact information
- Identification of all decision makers
- Definition of the scope of work
- List of the major milestones
- Description of the deliverables due from all parties involved
- Pricing (with discounts and payment schedules, if applicable)
- Method(s) of payment
- Cancellation clause
- Lines for signatures and dates
- Page numbers at the bottom
Depending on the complexity of the SOW (scope of work), you may need to include additional criteria, but don’t get overly complicated. Keep it to the basics above whenever possible.
It would be nice if we could go back to sealing deals with a friendly handshake. However, with the virtual disconnect created by the Internet, customers have an opportunity to take advantage of you … if you let them.
Show you’re a professional while protecting yourself at the same time. Put your agreement in writing.
All the Best,
The Solopreneur’s Guide