By Richard A.C. Alton, Esq.
With the start of the new year, it is a good time to think about how you plan to stabilize your business for the months ahead. If you are an independent contractor or small business owner, your priorities for the new year likely center around building client base. However, high on your list of priorities should be making sure you have an adequate and updated set of business contracts at your disposal.
Whether you are running your business from home, or providing independent contracting services to various clients on the road, your business should be equipped with your own collection of contracts. Large businesses have their own set standard contracts they prefer to use when dealing with vendors, suppliers, clients, contractors, and employees, so the same should be true of your business, regardless of its size. Although your business may not have vendors or employees yet, you should set your sights on the future of your business and how it will grow in the coming months and years, when it will most likely have clients, suppliers, and other third party relationships. It is important that you control these relationships, and not the other way around. The best way to set yourself up for that control is to have a healthy set of contracts of your own that you can use and edit based on your needs. Here are the Top Five Crucial Business Contracts every business owner should have in their back pocket.
1. Service Agreement – The How, What, When, and Where
Many small businesses are in the services industry. Some examples of these are a graphic designer or landscape artist. Although many of these small businesses are accustomed to providing their services after a simple hand shake or completion of a client intake form , this is not enough to protect you as a business owner should things go wrong with a client. A Service Agreement adds a level of protection and gravitas to your operation, and allows you to dictate the items that are most important to your business, i.e. description of the exact services to be provided, payment terms, dispute resolution, and representations of both parties. It allows both you and your client to formalize the service relationship and outline exactly how both of you want the business relationship to proceed. If you want to take it a step further, you can also develop a Master Service Agreement (“MSA”). If you feel there is the potential to perform more than one job or project, an MSA allows for a foundation agreement to be set with modifications based on specific orders to be developed later.
2. Confidentiality Agreements – Keep it secret, Keep it safe
Every business has secrets, ideas, or documents they wish to protect. A Confidentiality Agreement puts a good foot forward in ensuring that the items you consider crucial for your business are protected. We would love to live in a world where we could simply count on the honesty of others, but the reality is that making money sometimes trumps honest behavior, especially in the world of business. As such, a Confidentiality Agreement that outlines what is important to your business and should not be released by those gaining access to it is key.
4. Independent Contractor Agreement – Those Who Help, Can Sometimes Hurt
Anytime you engage someone to actively assist you in your business, you should think about formalizing an Independent Contractor Agreement. This type of agreement can lay out the exact relationship you wish to establish, the payment terms, and a host of other important provisions you will need. A confidentiality clause can also be among those important provisions, which is extremely useful as mentioned earlier. We all need help growing our businesses, but we also want to prevent that help turning into hurt in the event someone does something negative, destructive or harmful while working for or with you.
5. Employee Documents – Do This, Not That
If you are already employing a team to help your business, it is important to have a collection of Employee Documents to assist you in dealing with your growing business. These include an Employee Handbook, Employment Agreements, and potentially even Non-Compete Agreements. These documents help you build the framework of your employer-employee relationship, and once everything is memorialized, written down, and agreed to by you and your employees, they can help diminish potential liability upon you and your business.
The Alton Road
There are many more agreements that can play a vital role in your business, however these Top Five Crucial Business Contracts will prove valuable in your stable of business contracts. Alton Law is available to assist you when you are ready to start making the proactive decision to take your business to the next level.