What does it mean for something like business contracts to be labeled as luxuries?

When we’re talking about luxuries we’re talking about things that add pleasure or comfort that aren’t absolutely necessary. You want them, but maybe you don’t really need them.

Liiiiiike – maybe that second monitor you’ve been looking at for your home office, or those really cute shoes you’ve had your eye on for that big presentation coming up, or that espresso machine you’ve been dreaming about to fuel your caffeine addiction 😍.

Those are luxuries.

And yeah, they might make your work life a little more enjoyable.

Having two monitors might help you be able to close a couple of extra tabs.

And those adorable shoes might give you that little extra bout of confidence for your presentation.

And that espresso machine?

It might bring an extra little smile to your face when you take that first sip of coffee in the morning.

But will you and your business survive without all these things? Absolutely! Which is why they are all still in your online shopping cart 😉

What you and your business absolutely won’t survive without is contracts.

Business contracts are not a luxury.

Having your legal ish in order is not being extravagant…. it’s being responsible. It’s a first step, not something you start thinking about once your business is up and running. By then, it could even be way too late.

You might have heard someone say, “Investing in all that legal stuff is extra. 😩”

But let’s bust this myth once and for all by looking at the three most important reasons why business contracts are not a luxury, but an absolute essential for any business owner. 👇🏽

1. Boundaries Are Important

Boundaries are key in any relationship but are critical when it comes to the relationships you have with your clients and team members. They are what set the tone for how the working relationship and communicate how you expect to be treated.

And you deserve to be treated like a freakin’ ✨queen✨, so don’t skimp out on the chance to make that known! 

Having business contracts is your opportunity as a business owner to set the boundaries and expectations for you and your clients or team members. 

When everyone involved in the exchange signs off on the boundaries outlined in your contract, you protect yourself and your business from running into legal trouble.

What happens when you exchange services without setting clear boundaries?

Let Shelly be an example so that you never have to find out for yourself. 

Here’s Shelly’s story:

Shelly is a social media manager who doesn’t have a solid client contract in place 😬

She has a vague, brief agreement/proposal that barely describes the extent of the services she provides and informs the client how much they owe her every month.

Lately, Shelly has been running into payment problems. And payment problems are the absolute worst.

Some of her clients are weeks late on payments. This means that Shelly spends a ton of her valuable time following up with them and reminding them to send their payments. Not only that, but she is always answering questions about how clients are supposed to pay her, and even then people still forget.

Shelly is stressed.

Listen – If you’ve ever been in Shelly’s shoes, you know that this situation is upsetting, annoying, stressful, and wastes a ton of your time and energy.

You might even be feeling a little sorry for Shelly — but to be completely honest — Shelly low-key brought this upon herself.

#TruthHurts 😬

The reason that Shelly is finding herself in all kinds of draining situations is in part because of that sketchy contract we mentioned earlier. In that contract, she didn’t clearly outline her payment process, late payment policy, refund policy, and chargeback policy and now that’s coming back to bite her.

She has nothing to refer to when it comes to setting that boundary around how and when she wants to be paid for her services.

Here’s where things get super messy…

When your boundaries are not clearly stated and signed off on by all parties, the default is applied.

In a situation like this, the default within your jurisdiction is probably not going to favor the business owner.

Wanna know why?

Because you had the chance to prevent this from happening, but you thought investing in a proper contract was “too extra”.

That’s why.

This means that whatever financial institution is dealing with your chargeback policy are gonna take one look at you and say: “sucks to suck, girl”

Need we say more?

Set those boundaries. Set your standards high for how you expect to treat and be treated by your clients, and most importantly have everyone agree to these standards in writing.

If you are thinking “Ok, me and Shelly have little too much in common,” then go get a proper contract, girl!

2. The Proof Is in the Pudding (AKA the Business Contracts)

Having solid business contracts means you have solid proof of your client agreement. 

That way, you have something to point to that proves what type of services you and your client have agreed to. 

What are *exactly* are they expecting you to deliver? Your contract should reflect that.

Your contract does not have to be fancy. All it needs to be is a written agreement between two parties.

While you don’t need to worry about your contract having all the bells and whistles, one of the clauses you absolutely *must* have is a detailed explanation of the scope of your services.

You need to clearly state and sign off on the limits to the support that you will provide your client. You can’t do it all and that’s ok, but don’t make promises you can’t keep.

Without this being properly outlined, you could end up in a situation like Courtney.

Courtney is a health and wellness professional and a new coach. But — she is coaching her clients without a contract in place.

There is no written agreement between her and her clients where she has detailed the limit of the scope of her services. Because of this, she is facing a ton of potential liability.

A coach’s worst nightmare comes true, and one of Courtney’s clients has misinterpreted her coaching sessions for a medical advice or diagnosis.

Eeeeek 😬

This client is seeking damages from Courtney and her business.

The client asks to receive a full refund. Thousands of dollars that they had been paying Courtney over the past few months of their coaching journey.

This part is honestly tragic y’all… 😩

Courtney may actually have to refund this client. Thousands of dollars.

You guessed it… 

This is because she did not have a written agreement stating that she was not entering into a physician-to-patient relationship with this client. 

So this client has come to seek damages from her, and Courtney has nothing to point to that says: “We both agree that this is a strictly coaching relationship for educational purposes.” She has no proof that her client understood this from the get-go.

In this case, her client now has grounds to seek damages from her.

Stories like this are the most brutal because they are so preventable.

All Courtney had to do was to state the limitations and scope of her coaching services clearly in a written and signed contract, and she would have been protected from this kind of misunderstanding.

And, friends, these kinds of legal dilemmas happen all the time.

If your clients aren’t aware of the limits of your services, then you are at risk of being held liable for some serious damage. 

3. People Prefer Professionals

If you’re still not sold on the absolute necessity of having proper business contracts, then here’s what you need to remember: 👇🏽

You are not playing games. Coaching isn’t just a fun little hobby that you do on the weekends for some extra change. 

This is a business and a life you’re building for yourself. As the business owner, you are the only person in a position to do anything about your legal protection. 

You have a duty to yourself, your team, and your clients to make sure that you are taking action where necessary to ensure the complete legal protection of anyone involved in your biz.

You’ve gotta take this legal stuff seriously, and that has to be clear to your potential clients.

Soooooo many coaches lose out on clients because the “contract” they have is not thorough, or is straight-up non-existent.

And that, my friends, screams “unprofessional.” 

You’re about to sign with a client, seal the deal, fill up your roster, and boom — you lose that sale because your messy legal affairs send that potential client running for the hills.

Having a contract in place not only protects your business but also protects your clients. 

They know with total confidence that you’ll treat their information and investment with the utmost respect and care. You are making a promise that you will maintain strict confidentiality. So they feel like they can be open with you.

You need to show your clients that you take your business and therefore their transformation seriously. 

A polished legal foundation is an excellent way to show your clients that you know what’s up because you are a true pro. 

You’re Worthy of Legal Protection

The most important thing you need to take away from all of this is that you and your business are worth investing in business contracts. 

Putting your boundaries first and protecting everything you’ve built from the ground up is not frivolous or a waste of time or money. It’s simply being the best, most responsible business owner you can be.

Check out our ready-to-use, lawyer-approved, plug-and-play legal contract templates, so you can upgrade your client contract while staying Protected & Profitable™✨

Not sure where to begin? We’ve got you. Grab our FREE Legally Launch Guide to get the legal lowdown on everything in entrepreneurship, without the confusing mumbo jumbo. We’re serving it up straight and to the point. (Heads up: It’ll forever transform the way you view your client relationships!) Grab your copy now!

*The information presented in this blog post is for educational & informational purposes only. This should not be a substitute for customized legal advice from a licensed professional in a private setting. If you need legal advice, please consult with an attorney. This is not a law firm.

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