You know when you’re little, and your parents tell you over and over…and over…again not to run with scissors?  And when you DO carry the scissors, always carry them pointy end down so that you don’t trip and stab out your eyeball or something.  Of course, you assume that would never happen; you’ll be careful, you won’t trip, your parents are just being overprotective, right?  Well, what happens if that does happen?  Some bad, bad things…that’s what.

You’re probably sitting at your computer reading this wondering if you switched blogs by accident, thinking “WHAT do scissors have to do with my business?!”

Well, nothing…unless you’re business involves crafts, of course.  But what you learned from the “don’t run with scissors” lesson is applicable to business.

One of the most important parts of taking on a new client, business partner, or business situation is making sure you’re covered if something goes wrong.  This means getting all the proper legal documentation necessary for what you’re doing.

When you enter into a business-client relationship with someone, you never want to have to be the person requesting a contract to be signed, especially if you work with small businesses.  Some people feel uncomfortable asking for contracts to be signed, assuming the people with whom they’ll be working will take it like a new fiancee takes the request for a prenuptial agreement.  Other reasons contracts aren’t signed are that people don’t think about it, they don’t even know where to begin drafting up a contract, or they know the person and are sure “nothing bad will happen.”

Let me start by saying that I hope nothing bad ever does happen that will require you to act on enforcing a contract.  I hope all your clients pay you the amount they should when they should, and I hope all your information stays confidential when requested, and I really hope that nothing ever goes wrong with your business partnerships.  The thing is, though, one or more of these things probably will happen.  I’ve even had to enforce contracts of my own in the past.  Unfortunately, we have to take a stance of protecting ourselves just in case.  Handshake agreements are very difficult to enforce in a court of law.

Clients won’t be offended when you ask them to sign a contract.  When getting a contract created, make sure your attorney creating it ensures the contract protects both the client and yourself.  For example, all of my contracts state that all of their business information, passwords, proprietary information, and anything else that I have of theirs stays confidential during our business relationship and after ties are severed.  It also indicates that I will be paid a specific amount of money (varies by client and project) by a certain time and what actions will be taken if that doesn’t happen.  It’s specific but easy to navigate, so none of my clients need to enlist the help of lawyers to understand what they’re signing.  No fine print; no fancy lawyer jargon…just the facts of the agreement that were already agreed to during our discovery call anyway.  Therefore, nobody is hesitant to sign it, because the terms of the agreement were already, “Yes, I’ll pay you for work you’re going to do.”

In terms of not knowing what to write about, I do not draft contracts, as I’m not a lawyer.  However, I know some awesome lawyers that I can recommend depending on your location.  Make sure the contract indicates in what state the agreement is being withheld (so that way if things do get messy, you don’t have to travel to California to take the client to court when you live in Maine).  Be careful when going to the quick contract websites that promise a binding contract for a flat fee with no lawyers involved.  These are typically generic contracts and might leave your business open to issues depending on the industry and the state (all state laws vary, and generic contracts don’t account for this).  I actually got my contract off of one of these websites and then had a lawyer tweak it and make it more specific.

When it comes to protecting yourself and your business, contracts and things like liability insurance for the business and location (depends on industry) are crucial to save you a lot of headaches, money, and wasted time later.  Keep in mind, there are situations where if you’re not covered, you could lose your entire business and MORE depending on your situation.  Don’t take the chance of poking out your eyeballs just because you’re sure it won’t happen to you.  It might, and it will be bad if it does.  Don’t take the risk.  Plus, now you can’t say you didn’t even consider it!

Need suggestions on where to go for your contract?  Or maybe you need help organizing your business in general?  Contact me directly!