4 Priceless Steps to Contract Creation

As a business owner, employees are the lifeblood of the company. Without them, there is no way a firm can be successful. To get them onside, a contract is essential as it legally binds them to the company. Until the agreement runs out, the worker is a member of the team and can’t leave without your permission. As you can tell, a deal has to be rock solid. Not only are there dozens of variables, but there are lots of loopholes, too. Make one mistake and the contract isn’t worth the paper on which it’s written.

With that in mind, below are four priceless steps to consider when drawing up a contract.

List The Non-Negotiables

Every business has lines they will not cross. For example, some employers need their employees to be on time and can’t allow flexible working hours. Other companies have a small budget and can’t go over a certain amount regarding wages.

Because organisations are unique, there are different non-negotiable elements for separate firms. As the saying goes, it’s horse for courses. To figure out which ones mean the most, make sure to write them down on a piece of paper or a word document.

It seems like a basic move yet it will stop you from forgetting them and ensure they get added to the contract.

Outsource

When it comes to drawing up a deal, there is no reason to do the heavy lifting alone. For one thing, it’s as cheap to outsource to a third-party. For another, it negates the fact that you don’t have a clue how to create a contract in the first place! Agencies, on the other hand, have skill and experience and will hit the nail on the head.

Like all outsourcing options, it’s vital to choose wisely. Otherwise, the contract will be a dud and the money a waste. Online reviews are a fantastic place to start, such as these Peninsula business reviews on Facebook. Another option is to ask a peer for advice.

If they have a recommendation, you know it’s trustworthy.

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Hire A Lawyer

An employer needs to know that all the I’s are dotted and the T’s crossed. A legal expert will go through the document with a fine tooth comb to spot any errors or potential problem areas. With your list of “demands,” a lawyer also has a reference point to refer back to.

Why is a lawyer necessary if an outsourcer draws up an agreement? Well, it’s always wise to get a second opinion. A fresh pair of eyes may spot something an employment recruiter didn’t.

Get Ready To Negotiate

Just because it’s a contract which suits the firm doesn’t mean it’s the final draft. A savvy employee will double-check and make amendments where possible. Of course, you want as few changes as possible, which is where haggling comes into play. The key is to give them something they want yet doesn’t make a difference to the company. And, also make it seem as if you are doing them a huge favour.

Businesses have to draw up contracts at some point, and they can’t afford to make mistakes.

How to Ensure You Get Paid and Not Have Your Business Crumble

Different businesses tend to get paid in different ways. Some get paid before they do a job or service, while others get paid afterwards. Some don’t actually get paid at all because they fail to implement some of the most crucial things to do as a business. If you’re not getting paid on time, then you can run into plenty of trouble as a business.

Here’s how you can start making sure you get paid for the work you do by following these six (6) tips.

Do a Background Check

If this is an expensive service and you absolutely must get paid for the work you do, it could be wise to perform a background check on your customers before you accept them. Smart businesses do this to check the ability of customers to pay. You can then ask for a portion for the project up front, so that you can feel confident this person is serious about working with you and the services you provide.

Offer a Small Discount for Prompt Payment

Really encourage your customers to pay by offering a small discount for prompt payment, say within around seven (7) days. However, always be sure to first show them the overall cost of the service or product. This guarantees that your value is communicated above a discount. It’ll be in their best interests to pay you quickly then, and you won’t become something at the bottom of somebody’s to do list.  

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Create a Contract and Ask Them to Sign It

A contract protects the both of you, so make sure you create one and ask them to sign it. There’s no obligation to pay without a contract! There are templates you can use online, but it could be in your best interests to have the contract written up by a professional. Any wrong wording could be the undoing of your contract.

Bill and Invoice Your Customers in a Consistent Manner

Make sure you bill and invoice your customers in a consistent manner. Don’t do it in a way that allows them to forget, like most companies. Online invoicing is the future and will help to cut down time and hassle for you. Avoid waiting 30 days followed by sending out a reminder then extending to another 60 days and a reminder. This approach just doesn’t work.

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Make It Simple for Customers to Pay You

Present several options to customers to facilitate payment after you’ve delivered a product or service or both. There’s no reason they can give not to pay you quickly. You can accept payment using PayPal, direct bank deposit, wire transfer, cheque, cash, and so on. Any business that only has one way to pay is only holding themselves back from growth. 

A Last Resort: Sell Them on to Collections

If you’re seriously not having any luck with a customer, you can’t be afraid to take action. Just bear in mind that this is always a last resort. Consider how valuable this customer is to you by asking the following questions:

  • How long have they been a customer of mine?
  • How much have they spent with me over the years?
  • What could this customer be going through?

You could potentially try to see things from their point of view and arrange something that suits them better if you don’t want to lose them completely. However, it may have to come to selling on to collections if they still avoid you. You are running a business, not a charity.

The Biggest Risk to Your Business Is Doing Nothing

There is not a business on the planet that enjoys a risk-free existence. There are just far too many external variables that could upset the applecart, so to speak. But even though accepting risk is part and parcel of running a business, the most pressing risks also tend to be the most preventable ones, and that is exactly what we are going to address in this article.

Read on to learn about the most basic ways you can reduce the amount of risk your small business is exposed to.

Be Careful With Insurers

The whole point in using an insurance company is to mitigate the amount of risk you face. You pay a small premium in return for their assistance should an event unfold whereby you need their financial backing. It is the most obvious form of risk management.

Nonetheless, more and more businesses are learning that there are massive problems with their insurance contracts, leaving them exposed to big losses should anything happen, which is why we recommend you learn more about insurance here. With that said, there is one form of insurance that every business must absolutely get and that is general liability insurance, which will protect you from a wide range of potential lawsuits.

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Use Better Contract Processes

In the same way, you get what you pay for with copywriting, you get what you pay for when it comes to legal advice. Basically, cheap is not the best idea. This means having a professional assist you with your contract procedures to make sure your contracts are tight and reliable. Additionally, both parties will know exactly what is covered in the contract, what the limitations are and what is expected.

So, whenever you are required to handover or sign a contract, make sure a lawyer reads through them too. What’s more, get someone who has experience working with small businesses and someone who can explain what the contract says in layman’s terms.

Options Are the Best Option

The biggest risk a small business has to contend with is their financial situation. That is why it is so important that you have options on the table. By allowing yourself this, you will be much more adaptable should a financial crisis arise. In an ideal world, having enough cash on hand to keep operating for at least three months would be best.

However, achieving this level of security is as unrealistic as scooping up the lottery. But that doesn’t mean there aren’t other options to explore. It could be that you reduce the risk by bringing on a partner that can add some capital, or it could be you overhaul your business structure so that your personal assets are not tied up in your business — a business failing is a tough pill to swallow, but it is far better than losing your business and your home. So consider your financial options and expand.

Yes, a small business is open to risk. But there are a lot of positives that shroud these waters, such as the money-saving insurance packages that you can now get, an improved level of awareness surrounding the risks, access to tried and tested procedures and advanced tools that can better control risk. Your job is to just adopt the right one for you.