A work agreement/contract is something that is not very sexy to discuss, but crucial to have in your business. I get asked a lot about how to make sure clients pay on time, what happens if this and that, etc. Ultimately, your contract should cover all these items, so you are well-protected.
I want to preface this post by saying that I am not a lawyer; you should be getting legal advice from a lawyer. What I am sharing here comes from my experiences. It is up to you to double check it with a lawyer. The regulations in each state are also different, so check with your local small business attorney when you have questions.
There are many sample contracts you can download from the internet, but you should still walk through it with a lawyer to tailor it to your business. Our business is our livelihood, so you want to make sure you are covered. In additions, we are working with large ticket items here, a house is not a pair of socks from Target. Liability is much higher. So it is important to make sure you have a clear contract that protects your business.
I also see the contract as a communication tool with your clients. It outlines the scope of the work that you will perform, what the fee includes and how you work (payment terms, professional policies, insurance, photography waivers, etc.) Think of your contract as a rain coat. There may be loopholes, and you may get wet, but it will protect you from most of the crap that’s going to rain on you.
Here are my top three tips to protect yourself with your contract:
1. MAKE SURE YOU GET A SIGNED CONTRACT BACK BEFORE THE WORK STARTS
I’ve been single for a long time, and I found that before the guy gets a date, you have all the power. It’s the same as client relationship. You have something the client wants: staging the property on time by X date. Before you staged the house, you have all the power. Once you staged the house, it will be impossible to get your contract signed, or you may spend most of your time chasing after that payment.
We learned this the hard way last year when we got crazy busy. Now, no jobs go on the work calendar unless we had received both a signed agreement and deposit payment. Our Project Coordinator is very firm about this. No signature, no payment, then no job. And we haven’t had issues since.
2. THE BEST CRISIS MANAGEMENT TECHNIQUE IS TO PREVENT THE CRISIS
In my years of business, I found that one of the best ways to resolve the issue is often preventative. For example, even though in our contract, we say that it is the client’s responsibilities to notify us for destaging and client is responsible for prop rental until the day of removal, we still remind clients before they approach their deadline. We like to give our clients the benefit of the doubt. Often, they may get too busy and simply forgot all about it. By having a reminder, a 30-second templated email may save you hours of going back and forth for what clients see as an unpleasant surprise. This is something we had set up in our project management program 17hats, and it helps to prevent any miscommunication.
3. CLIENTS’ PAYMENT IS LATE / NOT COMING / YOU ARE BEING GHOSTED BY THE CLIENT
While you resist the urge screaming at the client “F*ck you, pay me” Ray Liotta Goodfellas style, update your invoice and send them a professional email either
- Tack on the late fee, offer to remove them for prompt payment by X date.
- Check in to see if there is a technical issue for submitting the payment (we only take credit cards) and offer to help before we add the late fees to the invoice.
Almost ten out of ten, the clients simply forgot. However, if you run into issues with getting people to pay, make sure your contract covers all sorts of details for all the scenarios possible. So when worse case scenarios happen, you can protect yourself with the signed contract and all the documentation of client communication you have. Here are some examples of potential issues that you should address in your contract:
- Inventory was damaged, missing or stolen
- Payment terms: before work starts, recurring billing, late payment, canceled check/bounced credit cards, you deposit policy (refundable or not, how much deposit before work starts), how you take payment
- Terminating the work
- Consent & waivers
- Final invoices
- What happens when there is a dispute
HOW ABOUT YOU? WHAT ARE SOME PARTS OF YOUR CONTRACT THAT YOU HAVE CONCERNS WITH? SHARE THEM IN THE COMMENT SECTION!
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