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?


Professionalism

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.


Protection

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:

1. Names of the principals involved with current contact information
2. Identification of all decision makers
3. Definition of the scope of work
4. List of the major milestones
5. Description of the deliverables due from all parties involved
6. Pricing (with discounts and payment schedules, if applicable)
7. Method(s) of payment
8. Cancellation clause
9. Lines for signatures and dates
10. 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,


Doug Dolan
The Solopreneur’s Guide

The Fear Factor

Why do companies use the ploy of Bait and Switch?

Fear of losing a sale. Fear of the quality (lack thereof) of their product. Fear of getting stuck with inventory. Fear of losing out on an opportunity to get in front of a customer.

I worked for a company that started to deploy bait and switch tactics as the market dropped. They advertised highly attractive products that weren’t available to lure in shoppers to pitch them on less attractive products. They marketed steal-of-a-deal products that weren’t available to get the chance to upsell higher priced products.

They crafted a story that if the customer had only acted sooner (create urgency), they too could have purchased the advertised product. “But, hey, while you’re here, let us show you what we do have. And you better buy now before this product is gone, too!”

I soon resigned.

Not all customers catch on to this loathsome practice – but, most do. Companies using this scheme build a rapport of distrust with consummers. And with word of mouth being the #1 means of marketing – it may help catch some quick sales – but, it doesn’t bode well for building a business.

So what’s the cure?

• Integrity
• Research
• Planning
• Action
• Determination
• Review

Be a customer advocate. Build your business around being a problem solver for your customer (not a problem creator).

Know the market you are going after. What products and services do they want? What are they typically willing to pay for them? How do they define value? Knowing your market will help you minimize inventory that doesn’t meet market demand.

Stay active in your market. Get your message out. Review how the market responds to your offers. Change your products and services quickly if necessary to better satisfy their needs.

I am dedicated to helping solopreneurs build successful, SUSTAINABLE businesses. Sustainability is not built on trickery to make a quick sale. Its foundation is built on developing long term relationships.

Larger companies can deploy the bait and switch for a period of time to help get them through a slump and off-load unwanted inventory. If a customer catches on, management can blame this unscrupulous behavior on rogue sales people acting as atypical used car salesmen. But in their view, at least they still have a customer on the hook – so they still have an opportunity for a sale.

You, as a solopreneur, can’t shuffle off the blame. You are your business. If a customer perceives that you are acting without integrity – at best you may get one sale, but you won’t sustain the business.

Don’t let the dollar that you make today be your last. Build your business with integrity.

All The Best,

Doug Dolan
The Solopreneur’s Guide