THE BENEFITS OF USING WRITTEN BUSINESS CONTRACTS:
Remember the days of class projects? All the chaos, confusion, and disappointment because the expectations and roles weren’t clear? Well, we’re leaving all of that nonsense at the schoolhouse. We are business owners and entrepreneurs. As such, we use written contracts to protect our interests and set clear expectations. Contracts are the building blocks of your business relationships. They shape everything that goes on in business – or at least it should. Don’t think so? Well, here are three benefits to using written contracts in your business.
1. Contracts define the business relationship.
We have a saying, if it’s not in writing it won’t happen. Better yet… if it’s not it writing it didn’t happen! Entrepreneurship is on the rise. Many people have begun to turn hobbies into side hustles and side hustles into legit businesses. Unfortunately, a huge majority of these new business owners aren’t using written contracts. Contracts act as guidelines to define the who, what, when, where, and how of business relationships. Imagine entering into a service agreement with one person to provide coaching services but not knowing who you’re coaching or when. It sounds silly, unfortunately, it happens more than you think. Person “A” hires you for executive coaching. Although you told them the subject includes personal branding, mindset, and leadership development the person is upset because you never discussed negotiations. On top of all that, they decided they do not need their last session and decided to gift it to a family member. Wouldn’t it be nice to have a written contract to refer to that spells out what is included and who the service is for? After all, communication in business is always key.
2. Contracts set expectations.
When you assume you make a …. well, you know the saying. Assumptions have no place in business. Contracts are used to outline expectations for both parties and establish what happens if those expectations aren’t met. Business contracts can help clarify who owns work created on your behalf by a third party, how your intellectual property can be used, the nature of different relationships, and much more. Of course, verbal agreements are legal. However, people have short memories. When you use a clear written contract, the expectations and guidelines expressed are not only more concise and easier to follow, but the contract also serves as proof if a conflict arises. Whether it is a Pre-Formation Agreement to detail everyone’s roles and obligations to an impending partnership or an Independent Contractor Agreement to outline the duties and relationship a contractor has with your company, clear, written communication is the best protection your business could ask for.
3. Contracts protect your interest.
The benefits of using written contracts don’t stop there. Written contracts are important because they protect your business and your interests. A contract is a legally binding agreement. While it sets forth expectations and guides your company’s actions, a contract also provides legal protection and remedies to safeguard your business. For instance, you sign a Service Provider Agreement with your vendor prior to purchasing any merchandise that states what the payment is, when the merchandise is due and what will happen if the delivery is late. This agreement will protect you and your business if an issue ever arises concerning payment for merchandise, delivery, fulfillment of orders – literally anything addressed in the contract. Anytime a client wants to know if there is anything to do if a client is late or doesn’t perform, our first question is, what does your contract say? Your contract should be tailored exactly to your business and your business relationship. You can include specific guidelines and even contingencies. Therefore, if anyone fails to fulfil their obligations, you have options on what you can do – even legal options. After all, protection is the name of the game.
Contracts are not a one size fits all. To protect your business, you need the right contract. We can help with that. Contact Off the Mark for your custom business contract needs.