3 Key Items To Include in Your Business Agreements

Before owning my company, I worked in a corporate environment. While I have not always been a fan of how certain things were executed by the companies I have worked for – I find myself syphoning some of those “big business” practices now that I own my own business. I like having systems and protocols in place. Protocols provide clarity and guidance around the who, what, when, how and why of what you do in business. If you don’t establish some foundational precepts in your business- you are likely to have your people haphazardly and unproductively prancing around your organization.

Early on in my business, I developed a document that allows me to outline the scope of my services to my clients. My “scope of work” allows me to make prospective clients aware of my expectations and terms of engagement. In the beginning, one of my SMB clients was presented with my “scope of work” and felt strongly that a document with equal parts project detail, pricing and legal jargon was not needed when working with small business. It was said that this document was intimidating. To which my reply was: “I’m sorry you feel that way, but this is how I conduct business.”

In my humble opinion, running a small business does not mean that your business is a free-for-all. There are certain checks and balances that must be accounted for regardless of whether you run a corporation or a local store. If you don’t explicitly outline your approach to the job or tasks at hand – who else is going to do it for you? We teach our clients how to treat us by the way we conduct ourselves in business. I would love to trust that every client I take on will pay on time or have the better sense to reschedule conflicting appointments in advance. The reality is: someone along the way is going to be “the one”. That is, “the one” to not pay you as discussed or to forget that you couldn’t promise certain outcomes without them providing timely information or access to systems.

I haven’t figured out all there is to know in business. However, there is one thing I know for sure. If you do not start your business on solid ground with systems, protocols, contracts, scopes of work etc. – you will likely be out of business pretty quickly. Should misunderstandings or conflicts arise, you need to be able to refer to an agreement, contract, or scope of work to reestablish order and refocus all parties involved on the client’s specified needs against the proposed services.

It doesn’t matter what kind of systems and protocols you choose to use. Nevertheless, you should include the following information in your business agreements:

1. Cancellation Policy
If someone fails to keep your scheduled appointment you lose time and money. Clients should be well-informed about what they need to do should they miss an appointment and any applicable fees associated to cancelling your services.

2. Pricing Terms
If you don’t establish these early on, people will take advantage. People need to know upfront what your services cost, how you prefer to be paid and when you expect to be paid for services rendered. Do you prefer Net 10 or Net 30 for payment scheduling? Assuming that people will pay on time or at all is not a strategy. Ensuring that clients are made aware of your expectations and any legal ramifications is smart.

3. Scope of Proposed Services  
It is very easy to get off track during a project or job. Your scope of work will act as your base camp. It will become your go-to document anytime a concern,question or complaint arises. I have had clients who abandoned the purpose of our scope weekly to pursue more immediate interests. When changing focus regularly gets tired- it is your scope of proposed services that will serve as a reminder of what you initially agreed upon.

Many will tell you that there is no need with such formalities or that you should do business with people on a “handshake” or “good faith”. As a business owner, you have to remain diligent in making sure you establish and enforce the systems, rules and/or protocols you put in place for your business. You will thank yourself later.