I was at a networking event recently where a majority of the attendees were from the coaching or service industry. Every person I spoke to, whether a long time business owner or a newbie, either did not have a service contract with their clients or were using a contract that they put together years ago and had never updated it.
The key to growing your business is to be current within the industry and savvy about your client’s’ business and its needs. A service agreement is an important document that will help you grow your business. Confused? Allow me to explain.
When you have a service agreement that is clear and easy to understand, it shows that you are serious about the business and the services you offer. Being proactive with the client and defining the scope of your work and relationship, makes the client feel more secure and confident in your capabilities. I have observed that service providers themselves feel more secure and see more business when they have well drafted, simple and clear legal contracts in place with their clients.
There is no one-size-fits all legal solution for all service providers. Each legal contract needs to be tailored to meet the specific needs of a business. The more customized the contract is, the clearer and comprehensible the scope of the service provider-client relationship. The depth and complexity of a contract varies depending on the size of the business, scope of work, duration of engagement, and the nature of the services provided.
Some important considerations regarding such service contracts are:
- Scope of Work: A good contract has a well defined, easy to understand, clear, and precise scope of work/services. Take into account the estimated time to be spent on the work, a definite start and end date, specifics of the work product to be delivered, and responsibilities of both parties.
- Payment: This section will set forth the terms of payment, whether fixed or variable, hourly or flat rate. Mode and timeline for payment must be clearly stated in this section. If you are taking an upfront retainer, or are offering a payment plan, then those terms need to be specified clearly.
- Termination: Every contract should have a set term – 3 months, 6 months, 1 year, along with a provision to end the relationship if things don’t go as planned and either party wants to terminate the relationship prior to the term of the contract.
Don’t wait until you get into a dispute with a client to get a legal contract. Clients who invest in a contract tell me that they have clearer and better relationships with their own clients.