The Lowdown on Why Contracts Aren’t Enough

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After nearly a decade at a prestigious global law firm, I said goodbye to the cold corporate hallways and set out on a mission to breakdown barriers and equip women-led creative businesses like yours with premium legal tools and quality resources to help take your business to the NEXT LEVEL. 


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Contracts are legal gold. But that value applies to expertly crafted contracts. And goodness knows there are plenty of non-expertly-crafted contracts out there. 

Entrepreneurs, solopreneurs, boss babes, and more fall for this every day — and we get it. You’re not a lawyer. How could you possibly know everything you need to legally protect your business? You can’t know it all, which is why we’re here to help.

Read on to learn more about the beauty of a solid contract, but also what else you need to safeguard your unicorn business.

First, What Does a ‘Great’ Contract Even Look Like?

If Google is your source for business contracts, we’ll stop you right there.

Here’s what you need to know: Contracts should be legally enforceable and cover all of the bases of who does what, who owns what, and terms for an engagement. Some of that may actually be found for free online, but a contract is capable of doing much more. 

Pitch-perfect contracts contain relationship-building elements. For instance, the ability to co-create a shared vision and objectives, guiding principles that align everyone’s expectations and interests, boundary-setting, and additional details that relate to your unique situation.

As you launch a consulting engagement, design project, or any professional services relationship, a contract sets the ground rules and even the tone for your work. 

We would urge you to open this link right now in a new tab to visit when you’re done with this article. Well worth your time to review what a professionally designed contract looks like.

Second, Let’s Talk Contracts and Lawsuits

A great contract will protect you from conflict that could escalate into legal action. One of the most common things entrepreneurs of all kinds face early on is non-payment issues. So, let’s use that as an illustration. To safeguard against clients not paying (or paying late), you have plenty of options: 

  • Screen clients in advance.
  • Require a deposit.
  • Promptly send non-payment notices.

Your contract should clearly delineate what happens if clients pay late — or don’t pay at all. A court of law should never be your first option, and you want to make a good-faith effort to exhaust all other options, which may include mediation or a demand letter from a business attorney. 

Are you in the throes of this … now? Check out this article: So Your Client Hasn’t Paid — Now What?

Non-payment is pretty common, and you should have a plan in place to deal with it. If non-payment or some other breach of contract does lead to small claims court, you need to know your rights and options. Want to know how you get the best possible outcome? A legally enforceable contract.

To recap: Contracts are essential, but some related processes (screening, deposits, non-payment notices) help a lot. This is a good picture of how contracts, though important, aren’t enough.

You need a dotted-i, crossed-t, A-to-Z plan to build your business — not just a handful of contracts.

Third, Contracts Are Part of a Comprehensive Plan

Contracts are just one tool in a comprehensive business structure and strategy. They’re not the whole tool box, and if they’re designed to be, they are likely to fail you.

You need a comprehensive plan surrounding any business contract, no matter how great that contract is. In addition to creating bulletproof contracts, you create momentum for sustainable growth in your business in the following ways:

  • Creating the right structure
  • Setting expectations and securing follow-through
  • Having a plan to handle conflict and manage risk
  • Investing in customer service
  • Managing your workforce
  • Finding your flow

Let’s look at each of these in a bit more detail.

Creating the Right Structure

Your business will need to be structured right to support the growth you want and deserve. Here are some of the key parts of that structure:

  • LLC – Forming a business entity probably means forming an LLC, along with systems and operations to support a full-blown company.
  • Documentation – If you do it, record it. Having documentation for the steps you take in building and running your business ensures you can prove what you’ve done or not done.
  • Insurance – You also need to obtain quality business insurance. It won’t solve every problem, but it can go a long way in reducing the out-of-pocket expenses you’d incur if you ran into legal trouble. 

These steps aren’t super sexy, but getting the right structure in place sets you up to take over the world.

Setting Expectations and Securing Follow-Through

Contracts come into play early on, but they aren’t just cold, lifeless docs you send out. They should be part of a holistic onboarding process that sets the stage for you to deliver all of your big ideas and promises — and win the hearts of your clients and customers. This is how you set precedents for how everyone will behave and what’s expected. You’re also covering yourself if anything goes south.

Plan to Handle Conflict and Manage Risk

Every client relationship should start in an environment of trust, typified by reciprocity, transparency, authenticity, equity, and integrity. These are important foundational values in resolving potential misalignments. With the right mindset, you and your clients work together in joint problem-solving, rather than getting combative. 

A contract is the black and white, and the relationship is the color in between that will get brighter the longer you work together. Having an objective, written guide for what will happen “if” is key to staying above the fray even if things become contentious.

Investing in Customer Service

You know *we* think it’s all about Y-O-U, but your clients need to think it’s all about T-H-E-M.

A customer-centric business model is key to succeeding in a modern business environment. This means you need to go above and beyond to create systems that answer every question, smooth out every process, and anticipate customer needs. Perfectly content clients are far less likely to initiate disputes or create conflict.

Managing Your Workforce

Clients aren’t the only ones who should be under contract and need to be served.

As you grow, so will your team. Whether you’re hiring independent contractors or W-2 employees, it’s important that they catch your vision for excellence and uphold your standards for operations.

Growth is full of risk: you can strategically manage that by honing your leadership skills so you stay on top of things, in the know, and in control.

Finding Your Flow

As a small business owner, you need to set yourself up for success by starting out right, building systems, leveraging tech-based automations, and having a plan for even the unthinkable. The goal is to invest the time in building, then finding the freedom to live in the flow. In other words, you don’t have to worry about what you’ve already taken care of. 

There are plenty of complexities to running a virtual business, but with reliable contracts AND meticulously designed systems, you are well on your way to domination.

Legal Resources: Contracts & Beyond

Here at The Legal Godfairy, we don’t just offer contracts. That’s because we know you’re in this to win it. Our secure, strong contracts are essential tools, but they’re just part of the bigger picture of what it will take to grow your brand. And we’re here for that, too. 

If you’re curious about what it looks like to amplify your impact, learning and growing with other like-minded business owners, The Legal Legacy Lounge™ may be right for you. Learn more here.

*Disclaimer: This blog post has been prepared solely for general information and educational purposes. It is not intended to provide, nor should it be relied on for, legal advice. Should you require advice regarding a specific matter, appropriate legal or other professional advice should be obtained.

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Imagine what's possible when you don't have to worry about getting paid.

Hi, I'm Neesa.

I traded stuffy suits, corner offices, and corporate boardrooms to serve small business owners and other freedom-seeking entrepreneurs like you from a tiny island in the Caribbean Sea.

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