I come from a culture that honors your word as your bond. For me, a contract was very simple: you make a promise and you keep it.
For the first few years of being in business, I was very loose about contracts. My strategy was this: whatever I promised my clients, I always made sure to give them that and a bit more. Actually, this worked for many years because my clients mostly walked away feeling like they received excellent service and also got more than they bargained for–until I got slammed.
I’ll never forget this. 18 years ago, a client owed me $25,000 and simply refused to pay it. My contracts were so loose that there was nothing I could do legally. This was a very expensive life lesson (one that I’ll never make again). If you are starting your business or if you have a growing business, get a lawyer. Yes, I understand choosing the right lawyer who understands your business is not an easy task, not to mention costly, but this is too important to protect yourself and your business not to do it.
Here are a few suggestions to keep in mind when setting up your contracts (of course these suggestions will change depending on your services):
- Always get a retainer for your services. You never actually have a job until the client commits to giving you a deposit to confirm your services. It is up to you how much time and energy you’ll invest before this commitment.
- Your contract should be extremely clear in what the clients should expect of your services and when. Always keep in mind that no client (including ourselves) likes a contract that is mostly in your favor.
- Payment schedules should be very clear. My suggestion is to break it up into three different payment deadlines: First Payment: To retain your services, once you both agree on all the terms.Second Payment: If you are a designer, you should have a full presentation where the client understands and approve all the designs they want to choose. (Client might even sign papers stating they understand and love your design). At that moment, you should get half of the cost of the job.
Third Payment: This should be non-negotiable. Balance of payment should be made one or two weeks before the event. However, if for some reason you are not able to deliver what you promise, you should always be willing and open to compensate your client.
- You might also want to put a clause in your contract stating that the client is responsible for any unforeseen additional expenses.
As you are constructing your contracts, always remember that the only way to have a happy client is for them to understand the value of what they are getting. And no matter what, your goal is to give it to them.
Tell me, have you ever had any trouble receiving payment from a client? Were you able to get the payment?
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George Bernard Shaw once said: “You see things and say, ‘Why?’ But I dream things that never were and say, ‘Why not?’” That quote embodies how Preston Bailey approaches every event.
kendra
May 27, 2010
so far no problem *knocking on wood*
Emily Tolve
May 27, 2010
We, too, have learned that over the years. Even if you don’t have a lawyer, but hire one to draft up a contract that you use and update it every few years… makes all the difference in the world! We did take one client to small claims a few years ago, and won. It’s never a comfortable situation to have to do that though! It’s probably one of the most awkward situations to be in, for sure. Especially after having developed a relationship with that couple.
If nothing else, for those just starting out- I think it’s ridiculously important to understand the good ol’ signature! Those are as close to someone’s fingerprint you can get.
Martine Chery
May 28, 2010
I never had any trouble receiving payment from a client, but at the beginning, I had trouble having people from my community signing a contract. I’m from the Caribbean and like you, ”you word is everything” and it was an adaptation for them to accept the fact that I have a business and it’s important that we have a written agreement. I could say it’s much better now, but you are right, it’s crucial to have a good clear written contract to protect us from people with bad intentions. Thanks for sharing!
A.J.
May 28, 2010
Preston -
Would you share an example of your contract with us ?
emt training
May 28, 2010
My cousin recommended this blog and she was totally right keep up the fantastic work!
LoriD
May 29, 2010
A few years ago I was very loose with contracts. A week before the wedding, the bride sent me several nasty emails stating I was overcharging her. I had already agreed (against my better judgement) to use flowers SHE purchased off the internet from a BIG BOX store (you know which one), so basically I was just charging for my time… well, I got scared and ended up backing down my fee. My reasoning was she would give me a bunch of referrals. The day of the wedding, as I was handing her the bouquet she bragged to her maid of honor how “cheaply” she had gotten off on her florals! I was crushed and of course, NO REFERRALS ever came from her. After that day, I drastically changed the way I ran my business!
Renita Hamilton
June 1, 2010
Well Preston let me share with you, the people who have cost me the most money are people who are my friends. I have in the past produced an event for my friends and they do not pay even after they have signed a contract. It would cost me more to litigate than the actual cost of contract. I have since then too learned the extreme hard way. I don’t budge an inch after the initial consult if I do not receive the retainer as contracted and promised initially. Thank you for allowing this topic. This helps a great deal.
M
December 17, 2010
I have just recently learned a hard lesson! There are people out there that are out to get things for free no matter what! The client said the floral was not what she had wanted yet there was a preview & contract stating it was. She then threatened to take our company to court after we had bent over backwards for them. It was definitely
heart breaking since we had worked so hard and been slapped in the face basically.
It hurt but taught the company a hard lesson! There are just really bad people out there and its unfortunate.
Gloria Buckman Yankson
February 8, 2011
Spot on! We worked for a South African company in May of last year and even underpriced just to get the job. We’re yet to see a cent from that job. We never do anything without a contract and full payment before the event day now. Lesson learnt!
ErikGreed
October 5, 2011
Nice blog!! keep up the nice style, it’s nice to see writer’s like you these days
Aqua
October 26, 2011
Hello Preston!
I’m a Bride and I find your website a wonderful, dynamic resource, thanks! Do you have a comment on how to express to clients the value of what they’re getting, as you noted above is so important to do well!
AC