As a startup, we’re always reading up on best practices and such. There are a million blog posts for every issue you face. From day one, one clear recommendation from the blogs was to get everything in writing.
Never start a job until you have a signed contract. Contracts protect both parties. The client knows what to expect and we know what we have to deliver.
We often hear about people who didn’t get what they paid for from a business. We have TV shows dedicated to outing bad contractors. News programs have segments dedicated to exposing bad businesses.
When your own, limited resources are on the line, there’s very little difference between a personal deal gone wrong and a business relationship gone wrong.
For small startups nailing down a legally binding contract can be a challenge. When you’re bootstrapping you’re often working on a wing and a prayer – i.e. without a lawyer.
What prompted this post?
We recently started working with a client who needed help increasing revenues. We knew them, had supported them in the past, and had a friendly relationship. So, we jumped in to lend a hand.
The thought of a contract didn’t even cross our minds. We were in it to help out. One month in, we were fired.
During that month, we ramped up. We did a lot of work, pushing ourselves to the limits for a few weeks. We hired two people to help.
We sunk a whole bunch of that precious – hard earned – money into getting this new project off the ground.
This particular project would have seen us working on a commission basis. It would have covered the cost of two people and started a regular revenue stream with great potential for growth.
Basically, without ever having shared any expectations – more importantly without ever having given us a cent – they said we hadn’t met their expectations.
So without crying over “spilled milk” for too much longer, back to the point: contracts. Had we taken the time to properly establish expectations we’d have been on the same page. Perhaps the client had unreasonable expectations, we’ll never know because we didn’t take the time to figure it out.
Either way, we got stuck with a big bill and the client walked away never having paid us a cent and we had no recourse but to send a strongly worded email.
We’re pretty good at establishing contracts with our clients, this is an exception, a very costly one. This is basic stuff but always create a clear contract that establishes clear expectations: sales targets, deadlines, a clear list of deliverables, etc. The best way to establish solid, professional working relationships is to be clear and organized up front.
When it comes down to it, in business there are no friends. Get it in writing and take it to court if you’re wronged.
Otherwise, you could re-write this blog post when it happens to you. I promise I won’t say I told you so. 😉