Not all businesses need contracts, but some do. How do you know if your home business is one where you should be using contracts and who should provide them–you or your client? Here are some suggestions for when and why to use contracts as part of your business operations, and what makes a good contract:
My standard rule is, when in doubt, it is a good idea to have a contract (actually, I’m a big believer in contracts no matter what)–if you are a freelance writer, or are providing a service to someone as part of your business (consultant, day care, house cleaning, gardening, etc.) it certainly doesn’t hurt to have a contract–a written agreement stating exactly what services you will provide, when, and the payment details. Additionally contracts give you a document where you can state what you are and are not responsible for. This way, you can make sure that everything is in writing and you have structure for your relationship with a customer or client.
It helps to have a standard contract created specific to your business that exists as a computer file–that way you can add to or subtract from it to make it specific to each client’s needs. Sample contracts are available online, or at your local library. You can also get ideas and mentoring about contracts from your local small business center or administration or even from a community college small business department (if you have one in your area) It is a good idea to run one by your attorney or see if there is a legal aid or legal advice for small businesses (sometimes available through chamber of commerce) to make sure everything is covered and done legally and properly.
Sometimes, clients will want to provide their own contracts. You’ll need to evaluate the contract closely to make sure it is something you can abide by and agree to before signing. Contracts are not a place where the parties try to “pull something over” on one another–they’re really a tool to make sure that the working relationship is structures and everything pertinent has been disclosed and agreed upon.
Once you are working with contracts, they should be reviewed periodically. I set time parameters in my contracts to force a review in 6 months to a year. This way you don’t get into a situation where a contract no longer fits the business relationship, or you are working with an obsolete or expired contract. Make contract changes as your service provision or client relationship changes just to make sure things are staying aboveboard and well-defined.