5 reasons why you need to start using consultancy contracts right now

You’re just getting started with your new business, you’ve got a few clients and are thinking about expanding your business. Now you wonder, what do I do next? Here’s a solution that you might consider as a side step now, but will definitely save you plenty of time and headache later on: use a professional consultancy contract.
Why do I need professional work contracts? You might ask. Well, for one, many entrepreneurs have learnt it the hard way about what happens when they don’t have a professional work contract. Web designer Russell Lee had this story to share:

“2 years ago, I had a web design client who was referred to me. I met her at her business address and began showing her my web design portfolio. As she liked my work, she hired me to design her a custom website. Back then, I only used a simple contract covering the basics, but it didn’t actually describe the service plan properly nor cover the process in details.
When I finished building the site, she emailed me that “loved the new site”, but then she requested minor changes to the website. At first, this wasn’t an issue, so I went ahead and fulfilled the additional requests. However, she started requesting more and more changes that were also becoming difficult to implement without redesigning the entire website. Eventually, after she deleted everything to install an unmodified $20 WordPress template I contacted her and told her that I was no longer going to work on the website.
After this event, I revised all of my contracts to be more specific than they were before to prevent another issue like that one from happening again, and since then I’ve had very few issues with my clients.”

As you can see, having professional work contracts can save you an incredible amount of time, agony and even money! Here are the top 5 reasons to start using them today:

1 – A consultancy contract will prevent issues of nonpayment

It is wise to specify an upfront fee in your contract. However, for long projects, you don’t want your hard work to go unrewarded simply because the client changed his mind and doesn’t need your services anymore. A contract will have legally enforceable grounds and a contractual engagement of both parties. It will have clear conditions of termination and any party which does not fulfill those conditions will be considered to have breached the contract. As a contractor, it increases tremendously the chances you have to be paid.

free consulting contract template

                   Not getting paid is even worse than not working.

2 – Even if you know your client, they might betray your trust

Like with Russell Lee, the fact that your client is the friend of your cousin or the niece of the foodcourt uncle doesn’t mean that they won’t cheat you. Oftentimes, people think they will get a heavy discount or even a service free of charge thanks to their “special” relationship with you. Maybe that’s something you want, but if not, it’s best to make it very clear since the beginning of the engagement by having a legally binding contract.

3 – It will prevent many complicated legal problems

This may be the most obvious reason of all, but it is also the most important one. Whenever there is money involved, people act in dubious ways. If you work without a contract and your client decides to sue you, it may as well mean the end of your business. Lawyer fees are so unaffordable that you will probably go bankrupt initiating any kind of lawsuit. A contract will prevent the client from becoming unscrupulous.

4 – It protects both parties

A well-written contract will establish responsibilities and rights of both your client and yourself. Unfortunately, there are bad contractors and bad clients. The client doesn’t want to see his money vanish, and the contractor doesn’t want to work for free because he was never paid. Having a contract that precisely explains the service, the timeline, payment schedule and all other aspects of the service provided will make both parties feel at ease, as they know what to expect.

5 – You look more professional

Maybe your client is hesitant to trust you, or he doubts how serious you are. A professional contract will show that you know what you are doing and you have experience, because having a contract will make your client assume that you’ve already done dozens of deals before. You may even use it as a pre-sell technic. Think from the perspective of the business owner: in his place, would you pay upfront fees to someone you don’t know, just because he claims he can help you? Probably not.

Get your professional consultancy contract here.

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