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6 Reasons Why You Need a Contract

do I really need a contract? yes you do!

When you're first starting your business, you don’t need a whole bunch. In most cases, you don’t even need a website. The reality is: All you need to start a business is a product or service to sell, and someone who is willing to buy it. That is all a business requires.

Here at The Contract Shop®, we’re not big on pressuring you into thinking you need to have all your legal ducks in a row until you: a) make a few sales b) decide you want to keep doing whatever you’re doing. We’ve all been there: You start a new hobby and decide to monetize it, only to find out it takes 87 hours and you make $0.12 in profit. We don’t want you to invest in a contract or even create an LLC until you know you want to keep this ship sailing. 

Once you know that, though, you need a contract. Period. 


The problem with “casual agreements” when you’re starting out

If you’re just starting out, you might think a contract is too complicated or too strict for how you're working. You may have verbal agreements or "just want to sell stuff," and don't see why you need a fancy contract anyways.

Here's why you absolutely need a contract once you start making money in your business:

Contracts establish the boundaries, expectations, and obligations between two or more people (parties). 

In a business relationship, your contract:

  1. Takes the fear out of the equation. Your clients or customers are not afraid of a contract — they're afraid you DONT have a contract, and they're taking a huge risk they’re not protected against.

  2. Establishes the norm for your relationship. This might be your customer/client’s first time working with someone like you. Clients often have no experience with services or programs, and they might feel left in the dark without a contract that explicitly states what to expect of you, and how they can get the most out of their investment.

  3. Sets clear boundaries around numbers. Think about the time involved on a project, the number of sessions or calls included, money owed, when deliverables and payment are due, etc.)

  4. Safeguard your resources as a business owner. Contracts help you prevent scope creep, clients who try to get more access to your time, and the risk of spending more of your money on team support, product, etc.

  5. Establish liability ahead of time. Think about the pandemic. Events were canceled and it was nobody’s fault. Luckily, our contracts had clauses to protect against cancellation and refunds, which helped both parties be released from the agreement without a huge fight or legal drama. It removed emotion from the equation, and made it very clear-cut: “This is what will happen.”

  6. Acts as a legally enforceable “scapegoat.” Have you ever had to fight with a client or customer over deliverables or payment? With a contract, it's not a he-said-she-said thing. It's what the contract said — and it protects both you and the other party.

For all of those reasons, YES, you need a contract!

Make sure your contract is rock solid

What goes into a successful contract? Do you have to include all that legal gibberish? We’ll help you see exactly what goes into a rock-solid contract that keeps you and your clients or customers protected. Download our FREE Rock Solid Contract Blueprint — and make sure you have everything you need to cover your butt. Check it out at

rock solid contract


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