No one expects things to go wrong with a client. In fact, you’ve done a lot of work so far to make sure you are working with the RIGHT clients.
But if you run a profitable service business, it’s going to happen at some point, which is why it’s a good idea to have a signed client contract for every project.
Think of it as the operating manual for how the client relationship is going to work.
If there’s a disagreement about the scope of the project or deadlines, you can reference your written, signed agreement. It also gives you ironclad proof in the event your client refuses to pay.
A common mistake new service businesses make is naively thinking they don’t need to have a contract. This usually lasts until the first time they get burned by a problem client.
To avoid this, take the time to create a contract that protects you AND your client in the event things go south.
If you’re looking to get a contract reviewed or drafted, email me at email@example.com
With that out of the way let’s look at the 5 reasons to always have a contract…
Reason #1: Make sure you get paid
There’s nothing worse than getting stiffed on a big invoice.
Requesting a retainer or deposit helps reduce the risk that a client won’t pay. But you should also have a signed contract in place that stipulates how much and when you get paid.
On bigger projects, you can base this on when you complete certain deliverables. Or you can set specific dates for when you are to be paid by.
This way, you have ironclad proof “just in case.”
Reason #2: Prevent scope creep
Scope creep is when the size of a project grows after a project begins.
A client may request “just one more thing.” They may want ANOTHER round of revisions. And before you know it the size of the project has doubled since you started it.
A good contract will specifically describe the scope of the project and the work you are agreeing to do. You can also indicate what happens in the event your client wants to expand or add work to the project.
Reason #3: Nothing ever happens without deadlines
Meeting deadlines is one of the most important things you must do for your clients. You only have the ability to negotiate your deadlines for a project once. So, make sure you give yourself enough time in case something takes longer than expected.
Setting deadlines for project deliverables in a contract gives you increased motivation to hit your marks. It also helps when clients are responsive or cooperative to requests you have. If they’re not cooperating, you can always reference your agreement to light a fire under them.
Reason #4: Show that you’re a pro
Like everything else you do with your clients — from the first contact to the end of a project — you want to show that you’re a pro. This helps separate you from the amateurs who either don’t take their business seriously or don’t care enough about their clients.
Just like you wouldn’t go without a website to show off your portfolio, you shouldn’t go without a professionally crafted contract. Sending over a contract for you client to sign indicates that you mean business and take their work seriously.
Reason #5 Protection in case things go nuclear
I’ve seen it happen too many times:
You sign a big client and you’re excited to get started. But as you start the project, some red flags start to pop up…
You started getting rude emails. They don’t respond to your requests for certain documents. Or they badger you day and night for the completed work.
And then when you finish the project, they start making unreasonable requests for changes. Or they dodge you when you ask them to pay your invoices.
In the unfortunate case you have to threaten a lawsuit or actually file one, a contract is your best protection in a dispute. It’s very easy to get burned by a client if your only proof is a verbal agreement or a bunch of emails.
What To Do Next
If you can afford it, I recommend hiring a lawyer to create your client contract.
You can email me at firstname.lastname@example.org to get your contract reviewed or drafted.
A good lawyer will ask you questions about what you do and who your ideal clients are to create a contract that is best for your situation.
Major client nightmares are often preventable. So, make sure you get an agreement in writing before you start work with your next client.