How to Use Your Contract to Protect Your Business
You walk up to the cashier at the checkout counter. He smiles and nods, and asks you how your day is going. You make small talk, and pray he doesn’t judge you for buying a box of Super tampons and the King Size Hershey’s bar. Okay two. But the other one is for tomorrow…ish.
When he’s all done ringing up your groceries, he tells you, “that will be $23.57 tonight.” You smile, insert your card and it beeps annoyingly to tell you to remove it from the reader. Then a screen pops up and asks you to sign. Wo there—look at you signing contracts like you’re a boss! Good job, you picked up your groceries and executed a legal document. Woo hoo!
How to protect your business with a solid contract:
Okay, I’m being dramatic, technically your agreement is with your card issuer, but the checkout screen is a binding contract of sorts as well! We just don’t notice it because it’s so routine and ordinary.
My goal is for you to view contracts in your own business as basic, boring and routine. Because they should be!
Contracts, at their very essence, are merely an agreement between two parties. You both exchange something: the store ‘loses’ their products, and you ‘lose’ your money.
When it comes to your business, contracts are no different, and they can help you avoid the following three common scenarios.
1. The client who has gone MIA.
We all have had situations where a client could have been a little more… communicative. But when a client just straight up ghosts you, what can you do?
With the proper contract in place, you’ve collected the client’s address, permission to send them to collections, and you have all the tools at your disposal to at the very least get paid even when the client is nowhere to be found.
2. The perpetually late-paying client.
We have all been late for some kind of invoice or payment. It sucks for us as service providers, but it shouldn’t have to. With a contract, you can clearly lay out your payment expectations right from the start so that your client pays on time, and if they don’t, you have the option to charge them interest.
Just a tip—I like to give them some breaks so they’re not surprised with a late fee the very first time. I think it’s important to get paid and fulfill the contract, but it’s also important to provide your clients with an excellent experience.
3. The client who feels wronged.
Effective communication and a contract to memorialize this communication is a great way to avoid any of the above scenarios, which means that you have a built-in amazing client experience right from the start.
But, sometimes, we run into a nightmare client. Maybe it’s someone you had trouble ‘weeding out’ through your consultation process, or someone that was fine but is now going through something personally and taking it out on you.
Whatever the case may be, I’d like to be able to use my contract as a kind of ‘scapegoat’ if things ever go poorly with a client because they didn’t read our contract. It’s reassuring to know that my contracts clearly lay out what I expect of clients, and when, so they can reference this at any time and deliver what is expected as needed.
This is important because if you have a vague contract that leaves your clients guessing, they feel neglected, left out and maybe even fearful that you’re not taking care of them. I use my contract as a tool to over communicate with my clients so they refer me, feel heard and have a clear understanding of our process together.
Need to enforce your contract? Find out what you should do when you have a breach of contract.
Feel like you want to double check your contract? Download the Client Contract Checklist to make sure it has all of the important clauses.
Don't have a contract? What are you waiting for?! Use code UHOH to save 10% on a contract template today.