By Dina Eisenberg, JD, Founder, SpeakupPowerfully.com

Are you a newbie who is just starting your business? You probably realize that you need a written contract for your small business.  After all, businesses have contracts.  What you might not know is why you need a contract and what to include inside of yours.  It can be confusing so let’s take a minute to walk through those questions.

Understanding what your contract can do.

Understanding what a thoughtfully conceived and well written contract can do for your business is the first step to becoming a successful, fearless entrepreneur.

Most small business owners think they need a contract to legally protect their business.  That’s true.  A contract can protect you, but it can do better than that.  Your contract is a tool that shapes your working relationship so you prevent issues if you write it that way.  How stress-free and happy could your business be?

Why you need a contract?

The number one answer I get from independent workers like virtual assistants when I ask why do you need a contract is: to legally protect myself.

Fair enough.  Hopefully, you won’t be in a lawsuit and have to rely on it.  Small claims court is a waste of time and money for small businesses and definitely not a good look for you.

Your contract can do more than be a shield.  Your contract is a tool that…

1. Signals your professionalism

2. Records the details of your agreement

3. Explains how you work with clients

4. Explains how best to communicate together

5. Shares your payment terms

6. Sets out your expectations and rules

7. Sets a collaborative tone

8. Explains your dispute resolution process

9. Builds trust and understanding

10. Connects you emotionally with clients to increase satisfaction

11. Reminds everyone of their individual and mutual responsibilities

12. Explores who you are as a businessperson

Your contract is your tool so you can use it to accomplish what’s important to you in your business.  For instance, you can set boundaries for your client inside your contract if you know you can’t say no to taking on ‘one more small thing’.

Next time the topic comes up you simply reference the agreement you have with your client.  Not in a mean way.  You can say something like-Remember we agreed that any additional items would need a change order?  Do you want to send me one or should I continue?  That’s a kind yet firm way to reset the boundary for your client.

What to put inside your contract?

Guess what?  You can put what you want inside your contract.  Your contract is a tool that connects you with your client and shapes your working relationship.  It represents you so own it!

Write you contract in a conversational style that feels and sounds like you.  Being a business person doesn’t mean you have to sound stuffy, formal or emotionless.  Bring that same passion and enthusiasm to your contract that you do to your work.  Be you.

How you write your contract matters for two important reasons.  Consistency and Trust.  You’re building a brand new relationship with a new client.  It’s almost like dating.  While you’re in the midst of figuring out how great you’re going to be together, surprises aren’t good.  Clients who meet a warm, friendly you then read a cold contract filled with legalese are faced with a confusing question.  Which one is the real you?

Consistency builds trust.  Trust builds connection.  Connection and understanding are what drive clients and referrals to emotionally smart entrepreneurs.  Your contract is a tool that creates an irresistible experience clients love to rave about and grows your business.

Try writing your contract with a light-hearted tone.  You can always go back and make it more formal later if you want.  You want to include the basic elements.  The best way to think of those elements is to think like a detective.  Or maybe a journalist.  You want to include:

• What are you promising to do, you and your client (the offer)
• When and how is the offer accepted and when it expires
• An indication you desire to be legally bound by you and your client
• What’s the exchange of value (the consideration)
• What are the essential details, i.e. Who, What, by When

Your goal is to make sure that anyone else who reads your agreement could understand what you and your client intended to do and all the relevant details.

Right about now you might be thinking that a template or borrowing a contract from a friend sounds like a great idea.  Totally understandable.  The process of writing your own contracts seems daunting, and there’s the worry about the consequences if you screw things up, I know.  Let’s look at that for a minute.

Your contract is a tool for your personal, as well as business growth.  The process of thinking about what you want to include and figuring out your language stretches you as a person and businessperson.  It’s an exercise that builds your resilience and confidence muscles, which are so critical for you as someone who works for yourself.

Your contract is a tool that helps you build the business you want, the one you dreamed of.  It’s a springboard that allows you to lead a conversation with your new and potential clients about how you can meet your mutual goal, to get the best result possible, and have fun doing it.

I so appreciate you for reading, and I’d love to hear what you think in the comments below.

What resonated with you?