Why Contracts Are Necessary
Never Start A Project without a Signed Contract
Sometimes I don’t like business. I think I was just born in the wrong time really. I would prefer to do business based on simple good faith and a handshake. That is where business started at one point, right? We didn’t need anything other than the person’s word. Someone had a need, another had a solution, and magic: a working relationship was created and agreed upon in a matter of seconds. Today, however, business relationships are a bit more complex and complicated, especially with the ability to do business online. In my business, for example, I have never met some of my clients because it hasn’t been necessary. In today’s competitive economy, doing business online and via email, Skye, or by phone saves valuable time — time that can be allocated and better served by promoting your business, selling your goods and/or marketing your product. In the age of social media marketing and online business, competition is high and much attention needs to be spent in other areas. Cultivating business relationships has evolved and expanded from a local to global level in just a few years.
When I first started my business, I avoided contracts because I felt they were impersonal and created a sense of mistrust right away by saying, “here are the rules and what happens if they are broken . . . not that I don’t trust you . . .” Meh . . .
However, adapting to a new digital and global way of doing business (in which face-to-face communication is limited based on need, commitments, and geography) has allowed me the opportunity to create trust in a distance-based working relationship. I have accepted that contracts are a necessity in protecting our business and our clients, while they also clearly define a working relationship and outline a plan for project success. In the end, everyone is happier.
Here are the top reasons why a contract is essential for your working relationships as independent website design contractors and small business owners:
DeadlinesWe all work better with clearly outlined and agreed-upon deadlines. As a small business, we can only handle a few projects at a time and we can’t afford to have multiple projects drag out for months or years. We try to schedule all our website projects in clear time frames, knowing that we can give those clients 100% of our time and attention. If those deadlines pass and clients come back whenever it is convenient for them, then it is possible to get overwhelmed and more importantly, it isn’t fair to the clients to whom I am currently committed. Of course, life happens and things come up, so being flexible is important too, but respecting the deadlines you have to your clients and making sure they respect the deadlines they have committed to you is just as important. In the end, everyone is happier.Clearly Defined RelationshipsAs a website developer working for myself, I offer a variety of services and wear a few different hats. In the contract, I make sure the client understands what I am doing, how I am doing it, and the projected results, whether it’s website design, coding, video editing, website hosting, SEO assistance, etc. If a client doesn’t understand exactly what I am doing, then it is easy to assume I am doing everything that is needed based on my varied skills, when in reality, each skill requires varied time commitments and costs. Contracts clearly establish the expectations of both parties. I know exactly what is expected of me and the client knows what is expected of them and the end product is agreed upon before we even begin. In the end, everyone is happier.Ending the Working RelationshipJust because the project ends doesn’t mean the client won’t have future needs, which is why this needs to be addressed in the contract. We provide website training, maintenance, and administration to our clients at a cost, but we must determine to what extent with the client and outline it in the contract. We certainly don’t want to abandon our clients and we love continuing working relationships with them whenever needs come up, but we also don’t want them to assume that we are available to maintain their site at no cost forever. It’s happened. Addressing how the project will end and what happens next is our responsibility. It gives our clients reasonable expectations and gives them plenty of time to make an informed decision for after their site launch. In the end, everyone is happier.Content OwnershipYou are producing a creative, “original” product, so who has the rights to the content after the project is completed? Where does the ownership reside? With you (who created it) or your client (who paid for it)? And more importantly, how is that content to be used in the future — portfolios, marketing material, etc? Make sure you’re clear. As the website designer, you probably want to use the site in your portfolio and marketing materials, while the client may want a copy of all the site files and original content you created, like Photoshop templates for example. Determining how the content will be used and accessed after project completion is important for both parties to have peace of mind. In the end, everyone is happier.Protecting Your BusinessIf you don’t have a defined contract with all contractors working for you, then technically, in the eyes of the law (California specifically), your contractors canbe considered partial owners of your business. Contracts protect you and your business!
There are many free or inexpensive resources where you can find information, speak with lawyers, and even look at templates for sample contracts. Check out LegalZoom for more detailed information.
Contracts clearly define relationships while protecting both the website designer and the client simultaneously. Contracts also remove any assumptions or false expectations by providing a clear end result in a timely manner so both the client and the contractor are happy. In today’s digital age, contracts offer protection and establish instant trusted relationships between parties who don’t necessarily have the opportunity to build a relationship in the old fashioned way — with a handshake and a smile. So, do yourself and your clients a favor by providing a contract — with a virtual handshake and a smile. 🙂
Until Next Time,