Common Mistakes: Lousy Contracts
October 7, 2010
I remember the days, years back, when my contract was nothing more than my word.
I survived perfectly well for years with this method.
For me it was very simple: just give your clients a little more than what they expected and everyone was happy.
This worked relatively well until one dishonest client refused to pay me a balance of $25,000, and there was nothing I could do to collect my money.
As my business grew, I became aware of the importance of having a solid contract.
I have gotten more than one request to post an example of my contract but since every industry (and client) is different, I thought I’d suggest a few of the most important points of a good contract.
This is a little obvious, but important:
Make certain that the names and addresses of BOTH parties are stated on the contract.
For service clarity:
Clearly and precisely state the exact services you will provide. The more detail, the better. However make each service, no more than one sentence. (No one likes reading the fine lines.)
This is very important:
Clearly and precisely state the compensation (in money or “in kind” services) you will receive for the above provided services.
Provide a Payment Schedule.
- A reasonable deposit the moment they sign contract (non-refundable)
- 50% due, the moment you present and both agree on cost (also non-refundable)
- Balance of payment 2 WEEKS BEFORE EVENT
- State very clearly that if there are any additional expenses (for example: more guests, items or service) the clients should approve (in writing) and pay after the event is over.
If you want your business to grow:
Maintain the ability to photograph or video the event and use those photographs or videos for promotion.
There’s so much more we can cover about contracts, so we’ll continue this conversation next Thursday for “Contracts: Part 2.” I learned the hard way that, like good fences, good contracts maintain good relationships.
Do you have any questions about contracts I can address next week?
- Do you normally charge your client for your transportation? (e.g. car, truck or time)
- Do you charge your clients for additional materials or flowers?
- Do you have difficulty collecting two weeks before the event?
Please answer one or all of the above questions for us to discuss next Thursday.