Here’s a confession– the first year of my business, I was definitely not using any contracts for my clients. It just never seemed necessary. Like most business owners, the first few clients were people that I knew. I went through my personal network of family and friends to find my paying clients. It was nice because I also got referrals this way.

So I figured that since I know them, I can trust them and we can just go with the flow. For the first few times especially if it’s someone you know, it doesn’t turn out too bad. Although, I have heard horror stories about people working with their family members or close friends. Usually, they expect more work done but with a discount.

Nothing detrimental really happened to me during that period of time. There were only a few things that were slightly inconvenient and wanted to avoid later. Besides issues like not being seen as an expert (but more as an employee who you can micromanage), I didn’t have a lot of boundaries in place.

If someone needed a revision for the fifth time? No problem. Well, it was annoying for me but it wasn’t that bad. But imagine if this was every single time and you couldn’t find a way out. Or if clients are calling you or texting you on weekends.

A very common problem I hear from service-based entrepreneurs is that they didn’t get paid for a service that they completed. Most of the time there isn’t a contract in place. And if there is a contract, it may not be extensive enough to cover all of their bases.

Why are contracts necessary for your business?

They can really protect you and your business. Sometimes you’ll have very complicated projects that last for months. Or it’s a high-ticket item that requires many moving pieces. It could be a retainer that requires you to work for someone for about a year.

When you’re really relying on this client for income, and you’re agreeing to spend a lot of time working on this, you obviously want it to go well.

It could be as simple as the fact that this client has never worked with someone like you before, and they don’t know the proper etiquette for this project. They don’t know how to communicate things, how to give feedback, payment terms, and what to expect at the end of it.

This is exactly where a contract comes in. It helps you define their expectations, what you’ll be delivering, and how the process will go from beginning to end. For designers and artists this also means there is an agreement of who has the rights to the end product. Also, if things go sour, they can agree that this is how they will proceed.

Though it’s nice to have a contract that’s short and sweet, I don’t think you’re really doing anyone any favors. The point of this contract is not just to protect you but to protect your client. They want to make sure that by the end of this after they spent their money on you, they’re getting what they paid for.

Considerations for a contract

Since I’m not an attorney, I can’t give you legal advice on everything that should be on a contract. I didn’t draft my own, it was actually prepared professionally.

Most of you are selling services that cost over a few hundred dollars and that’s when I would suggest you would start bringing contracts (during onboarding). I promise it’s worth every penny not just for peace of mind but also for security.

I’m going to list a few things that I really found helpful to include in my contract.

Deliverables (to avoid scope creep)

What exactly did the client hire you for? This is where you want to state the project type and what that means. Then you can list out all of the deliverables to make sure that nothing is left out of this contract.

So when the client comes back to you and wonders why you didn’t give them a certain piece, you can refer back to what they agreed on in the contract. To make it even easier, you can even say the deliverables are on the accepted proposal. (Dubsado makes it easy for them to select what they want if you have some package options!)

Don’t forget to add revisions into the deliverables section! For most of my packages, I limit it to 3 rounds of revisions. I let them know that if they want more than that, they may be subject to additional fees upon discussion.

This will help keep things clear and not let any little things slide by. It can be a slippery slope to have you work extra and not get paid. List it out as clearly as you can, usually with bullet points so they can check it for accuracy.

Timeline

This is especially helpful if you don’t have immediate availability. It’s going to tell them when they have you booked for. So keep in mind that you should list the start date and a timeline for how long this project will last. If it’s a retainer then say something like 3 months starting on this date.

If the timeline is dependent on certain tasks that the client has to do, give them an estimate.

A very important thing to do if you find yourself continuing to delay projects because your client isn’t providing proper feedback in time is to add deadlines. And you can define the consequences of what happens if they miss those deadlines like putting the project on the back burner or charging them a fee.

Remember that you need to value your time, so if they’ve booked you for that slot, but they are delaying it (thus preventing you from working with anyone else), you can charge for it. It’s all about establishing a professional relationship and time is of the essence.

Payment

I love talking about the payment part of a contract because I think a lot of this is missing with entrepreneurs. It’s really easy if you have an established relationship with this client and you have to do something that requires a monthly contract. Then what you can do is require a full payment upfront every month before you begin.

If it’s a large amount and it takes a little bit of time, then consider adding a deposit and what that means for them. Is it non-refundable? Or can they get it back with a specific circumstance?

And the last part is what a lot of people struggle with. They did all this work and their client is now avoiding them. It leaves people stressed out and discouraged because they don’t know if they’re going to be able to get that money for all the work that they did.

And this project may make or break their business. So if you can’t charge upfront because it has a lot of steps, find a way to have them pay before you give everything to them at the end.

This is pretty relevant for designers because you can wait to give the final files after the payment. You may need to tweak this based on what your service looks like, but I suggest you find a way to have “insurance” in case they try to avoid paying.

Communication

I’ve heard some interesting stories in different groups about how clients contact them and get into their personal space. I’ve heard about some people who had clients calling them and texting them on their phones without giving that information away. Or some who are expecting customer service outside work hours.

You can absolutely include all of this in your contract. Talk about the kind of communication you will accept and how often. You can let them know the best way to contact you if something like email or Slack on Mondays through Fridays from 9 a.m. – 4 p.m. Be very specific so they know that they won’t be expecting a response on the days that you don’t work.

You can also include how long it’ll take you to respond. If you’re busy or run your business solo, you can tell them how long it takes to get a response back.

Ownership

Depending on your industry, you are usually doing something that they later use for their business. Like a copywriter who’s written the entire homepage and services page. Or a designer who made a few illustrations for their website.

You get to decide what happens to the work that you’ve created. Usually, if it’s an essential part of their business or brand, they get the rights. However, you can include that you have the rights to include this work in your portfolio or promotional pieces.

What that means is up to your discretion. For most brand designers, we give them all of the rights to their logos and brand identity elements. It wouldn’t make sense for me to own something that is essential to their business and they can later trademark. That’s usually why working with a brand designer is going to cost more than a small illustration.

If you’re a copywriter and worked on their about page, this has information about their personal and professional background. Since this is their story and part of their business message, usually the rights transfer to them but you can use this in your portfolio.

There are other times that you can own the final product based on what you do. I know there are some photographers who keep the rights to their photos and only give their clients certain permissions. It all depends on how you want it to model it.

Comprehensive contracts require professionals

There’s also a lot of other information about termination or what happens if you want to take them to court. This is out of my expertise and would advise that you ask somebody who specializes in contracts or business law.

If you have a pretty solid contract, you don’t really have to worry about spending money on something like that again. It should last you a long time and be pretty easy to change the wording here and there if things come up.

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