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Business Agreement

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.”

Business Agreement

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)

                P: Price

                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. 

Financial Tips For Writers

Let me start by saying that writers don’t have to be starving artists to be successful. Today, in this blog, we’ll be talking about financial tips for writers.

financial tips for writers

 

The fact is, you’re a business owner, you are self-employed, and you’re actually running the business of you. To run a business, you must have some money. When people say they just want to write and not worry about the money, what they’re saying is, I’m not interested in, protecting, growing, and developing the business of me, which is the income and revenue-generating source of my business.

 

 

With that in mind, here are some financial tips for writers

 

 

Have a monthly budget and put away enough of your advance or royalties to cover 3-6 months of expenses

 

In the book writing world, your royalty checks are held anywhere from 2-6 months after books are sold. That’s a long time to wait to get paid. I know that many writers have a feast and famine cycle in their financial lives for this reason. One of the best ways to break that cycle is to make sure your personal expenses are covered every month and the money is in the bank. This will bring some security and can support your ability to create by removing financial stress. Calculate the costs of your food, utilities, rent or mortgage and transportation every month and squirrel away the amount you need to pay a few months of your expenses.

 

If you are freelancing or writing for a magazine or other organization that pays regularly, know what you need to bring in every month, and price your articles and projects accordingly. Make sure you can cover your monthly expenses. As soon as possible create an emergency fund and squirrel away a few months of income to prevent the feast and famine of the publishing world.

 

 

Think of your labor in a book as a sunk cost  

 

It is very hard sometimes to imagine recovering some financial benefit to all the hours you put into developing your work. It is much more difficult than somebody who, say, a jewelry designer, who knows that it takes an hour and a half to make a certain piece, and we can put a direct dollar figure to what they want to recover. So, I’m going to start by saying I understand that writing is hours and hours and hours and having an hourly rate that you recover actually could be very difficult to calculate. This may give people a little bit of a pause about using a formula because it may seem more complicated.

 

But just pricing a book and hoping to sell a bunch of copies isn’t necessarily the best business model, because you don’t know whether or not you’re actually making back what you’re putting in to generating the work. It’s smart to have a sales goal; a financial goal, for the work.

 

think about pricing accordingly

 

There are two considerations you can use for this. The first one is you need to know how much you need to recover for your personal money. During the time you spent writing, on average, what do you need each month for food for your rent or mortgage for your transportation for all your utilities? Having that as a base as an operating figure that you would use?

 

Then, how many months did it take you to write this particular piece of work? How many months of operating expenses? Did you basically put out during the time that this was in development and being written, so having that number there gives us a place to start for you to recover money for your personal needs. If you were to consider your operating costs, let’s say that it took you five months to develop this particular piece of work, and your operating costs every month are $3,000, you’re looking at $15,000 as the minimum that you need to make back in order to cover your own time. Time that in reality you “loaned” the book to write it.

 

The second consideration is to come up with a number or percentage of costs that are profits. Adding a little bit of extra money to the cost of a book for profit is important, but in all honesty I get a lot of pushback from creatives on generating profits.

 

 

Don’t let your love of writing overshadow your need for profits

It isn’t just writers. For some reason, many creatives want to be the altruistic entrepreneur.  The fact is that the more profit you make the more impact you can have. Price your books and services and deals for profitability.

 

If you’re not making a profit, you can’t have a level of impact above anybody else. How can I say this? Well, how can you be insanely generous and donate to the causes that mean something to you?

 

How can you create opportunities or hire people? Whether it’s a cleaner for your home, or an editor, or an assistant? You can’t do those things without making a profit. In some ways, profit is your duty. As a business owner, you really are the only engine that is going to generate additional money in the marketplace; support other people and causes, or allow you to do volunteer work. When you look at profit as an impact you can see that it’s okay to make a profit.

 

Writers have unique gifts and storylines to bring to the world. But the vision of the starving artist does a huge disservice to craft. Follow the tips I had discussed to make sure you make money while doing what you love. 

 

 

Author’s Note: 

Did you enjoy reading Financial Tips for Writers? If this is something that resonates with you and you need further assistance to take your business on to the next stage, visit my RESOURCE CENTER