Running a business without written business agreements puts you and your clients at risk for misunderstandings. It puts you at risk of not getting paid. And further puts you at risk for chargebacks, where the client goes directly to the credit card company and claims fraud after receiving services. Without a written agreement, you will likely have to refund any money you’ve received, even if your policy is “no refunds.”
All About Business Agreeements
The truth is that contracts, or as I call them business agreements, do not have to be complicated, written in legalese, or 20 pages long to be enforceable. What they need to be is yours, not someone else’s copy/paste, clearly written, including all terms, and signed. When I say do not “copy/paste” someone else’s, I mean do not copy/ paste. There are formats online you can follow, but don’t include things you don’t understand and just change terms just because they have it in theirs.
Here are the main things to include in your business agreements.
Business agreements: Be Clear and keep it simple.
Nobody likes legalese. Nobody. Drop the “whereas” please. Just say it clearly and keep it simple. If the program lasts six months, it lasts 6 months. If there are 4 monthly payments, say that. People want to know what they are signing up for. It doesn’t have to be fancy, lengthy, or in legalese to be enforceable. You can have a legally binding agreement written on a napkin in a bar (there’s a law case on this!), not that I’m suggesting that approach.
Business agreements: Include QTIPS
The specific terms need to be spelled out. You can use QTIPS to remind you to include these things:
Q: Quantity (6 sessions, 2 bracelets, 5 massages, etc.)
T: Time of Performance (15 days, 6 months, 1 hour)
I: Identity of the Parties (You and the name of the client/ customer)
S: Subject Matter (what are they specifically buying? Coffee? Coaching? Copywriting?)
When you include the above terms of your agreement, there isn’t much room for misunderstanding. Just make sure you are specific. Don’t say “fruit” if you mean “orange.” It can be a single sentence, “This agreement between Me and You is for Six 30-minute life coaching sessions over 6 weeks for $350.00.” All the terms are there. You know what you are giving, and they clearly know what they are getting.
Business agreements: Spell out the policies
This is where people often leave out things that come back to bite them. If you have a no refunds policy, you must put it in writing, in the agreement with the terms, and have it signed. If you offer refunds or replacements within 30 days, it must be in there as well. The policies are the actual guidelines within which you run your business. If you require a deposit, if you require pay in full before a VIP day, if the customer pays shipping, you must let your people know this BEFORE they complete the purchase.
Many times, I see entrepreneurs who have policies develop only after an incident. You must be more intentional than that. Walk through the customer journey in your mind and find the sticky spots where they may have a question or an issue about your product or service, and how you want to resolve it. If someone doesn’t like your policies and chooses not to do business with you, trust me, it is far better than the bitter dispute with the credit card company over the chargeback later.
Business agreements: Get any changes in writing
If you make changes, and they do happen, just put them in writing and sign and date them. “You and I agree to change our agreement to include XYZ. This change is effective immediately.” Do not rely on the memory of what you said on the phone, and the out of context email isn’t any better. Take a minute and “memorialize” the change.
Business agreements: Be prepared to enforce the agreement
This is the part of business nobody really likes, but this is the reason you have written and signed agreements. You must be prepared to enforce them. In my own business I allow people to pause coaching for a month or two if life happens, because I understand that life happens, but we don’t just “cancel” the agreement because life happens. We pick back up and finish out the terms of the agreement. I’ve never had to actually go out and enforce anything, because I have great clients, but if that day ever came, I will. This is business. My livelihood depends on my clients keeping their word, and their own business growth and development relies on it too. You must view this from an objective place and understand that if your clients don’t keep the agreements, your business could go under. Be stronger than that.
Finally, Having an attorney look over your agreements is a wise decision. I don’t just say that because I have a law degree. Attorneys went to school to spot gaps and look for language that is written in a way that can be interpreted differently than you think it means or is ambiguous. If you are skipping the attorney for now, but don’t have written agreements, set aside time to follow the above steps and get your agreements together now.