You have made the decision to start your business. There is a growing trend in modern times for people to create their own businesses or work for themselves. Along with traditional shopkeepers and tradesmen, there is an increasing number of people who are using the internet, their personal computers, laptops, and tablets to start a business. Working for yourself is an excellent alternative to working in an office, factory, or commuter car.
While you’ve carefully thought about your products and customers, your business plan, how much profit your company intends to make, what investment you are making, have you ever considered the importance of ensuring that you have contracts with your customers? Are you someone who thinks?
Contracts are not for small businesses but only large corporations.
“Contracts are complicated and require lawyers.”
– “Contracts will deter customers from purchasing my products/services.”
– “I don’t need a contract if I’m working with family or friends.”
These misconceptions are common among small business owners. They are also understandable since very few people have a legal education. Let’s take a look at each of these issues.
Contracts are not for large organizations.
This excuse is most commonly used by small business owners. It is a common excuse for small business owners. However, if you take a step back, you will see that your business should be treated the same as a CEO of large companies with hundreds of employees and millions of revenue. In protecting your business, why should you take on more risk than the organization? Even though you operate on a smaller scale, your principles and risks are similar. Both of you want to sell products or services. You want your customers to pay you promptly for your products and services. This will minimize the impact on cash flow, increase your profit, and likely grow your business.
It is likely that these large companies have grown and become successful because they realized early on that formalizing the relationship with customers through written contracts was an essential part of their business.
If written correctly, written contracts can actually be used to protect your business and you. Written agreements will give you and your customer assurance on issues such as payment, product sales, delivery, and services. This will prevent any miscommunications and makes it less likely that you’ll end up in a dispute.
While disagreements are possible and likely to arise in your business, they are much more likely to be resolved and cost-effectively priced if you have a written agreement that clearly outlines the rights and obligations for both of you. Even if there is a verbal agreement, there are more chances of misinterpretations or lack of clarity that could lead to a dispute that may need to be settled by expensive lawyers and the courts.
As a small business owner, you must treat writing contracts as an integral part of your day-to-day operations. They will ensure the viability of your business over time and help you to protect your livelihood.
Contracts require lawyers and are full of legal jargon.
Search engines make it easy to find standard contract templates online that you can use in your business. You can often find free templates for contract writing in many cases. While you may need to choose a suitable template for your business to make it work, it is not essential to hire a lawyer to create a custom contract. If you are unsure whether a template contract is suitable for you and need legal advice, it will cost less to have the lawyer amend the agreement than create one.
The templates for contract templates can vary depending on where you live in the world and what the laws are in your country. These contract templates can be used for international business.
Best of all, it is possible to read contracts in plain English without requiring a Latin or law degree.
Customers will be discouraged from purchasing my products/services if they are subject to contracts.
In fact, the reverse should be accurate. Written contracts allow you and your customer to clearly understand what is being offered and the obligations. The contract can be used as a selling tool. You can tell your customer that the contract exists to protect his rights and give him assurance that he will receive what he expects. This shows that you are professional and will act as such. It should also resolve any doubts your customer might have.
If you provide a service to someone, is it clear that both parties understand the full scope of the service, when it is considered complete (and your obligations end), and when you will be paid?
You have significantly reduced the chance of either having one or both because you took the time to create a contract.
An unhappy customer who doesn’t believe he received what he ordered. This is a loss for future business. ;
– To perform additional work at your expense in order to receive payment;
To spend time and money to go to court to enforce payment. In the knowledge that if there is no written contract, then there is uncertainty about how the judge will rule.
A written contract can show customers that your business is serious and professional. This will make it easier for them to treat you similarly. If you deliver what you promised, you will be much more likely to get paid on time. It should also be much easier to do repeat business once the initial contract has been signed. Customers may have the
option of buying additional products and services.
A written contract is an essential requirement, especially as your business grows. This will help you avoid any potential problems. A potential customer who refuses to sign a contract is an indication that they don’t want to be taken seriously. Even if you have little cash or are desperate to get new customers, you should not do business with them. Sticking to your principles will save you much frustration, expense, and headache.
I don’t need to sign a contract with my friends or family.
It is tempting to make friends and family connections when you’re just starting your business. They may offer to help you with your first customers or even invest in your industry. While such support is based on good intentions, you shouldn’t be too confident and assume that your business relationships with family members or friends will not face any problems in the future.
A written contract can be used to protect family and friendship relationships and to make it easier to solve any issues without emotional pain.