6 Things Your Client Proposals Must Have

What are the 6 things your service-based business NEEDS to have in its contracts? Read this post to make sure you’ve got some solid contracts in place.

Contracts! Proposals! Ugh (or YAAAY) if you’re one of those people who really likes when things are completely outlined.

One of my favorite says about contracts is this:

Contracts ONLY matter if you have to enforce them.

Meaning, sometimes, you will work so well with clients that you won’t even need to reference your contract even ONE time.

And sometimes, you’ll be reading it every week to remind your client (and sometimes yourself) exactly what you each agreed to.

I remember the first time I put together a contract, I don’t honestly remember doing a ton of work on it.

At the time, I didn’t think I’d ever need it and I had no idea what it might even LOOK like for a client to challenge a contract. And then, when I finally figured out what it DID look like when a client challenges a contract, I realized I needed to get my contracts tighter.

Below are the things that are REALLY important to have in your contracts no matter what type of service-providing business you own.

Payment Terms

Of course I’m starting out with the money piece, but this wasn’t something I really put into my business until FAR too late. I sort of just told clients I’d invoice them, and then, when I needed cash, I would send them over a request.

WHAT TYPE OF HOT TRASH BUSINESS OWNERSHIP IS THAT?!

You need to let your clients know about your payment terms BEFORE you get your contract signed.

Why?

Because they may be the type of business that doesn’t pay invoices for 30 days or 60 days (called Net 30 or Net 60), which means you’ll be out of luck when you submit your invoice, ask for payment in two weeks, and are informed that you’ll need to wait at least a month or two to get your payment.

Businesses (especially bigger ones) can DIE due to these 30-60 day wait periods (if you can’t pay your people because you’re waiting to get paid, you’ll quickly have problems), so having agreed-upon payment terms in your contracts is important so that you can keep your business running, the money flowing, and your people (and yourself) PAID.

Personally, we’ve always had a 2-week payment term for our clients BUT we work with smaller businesses. When you work with large businesses (likely $10+ million) you’ll definitely be waiting for Net 30 or Net 60, since those businesses are also often waiting to be paid by their clients or after the release of a product.

Know your payment terms AND stick to them. It really sucks of you have a 2-week payment term, and then you forget to get the invoice out for two weeks, and then you’re waiting another two weeks…just create some payment terms.

Action: Outline your payment terms! We usually ask for 2-4 payments depending on how big the project is (if it’s a year long or more, 4 payments. If it’s less than 4 months, usually two payments). We always have a deposit due before the event launches and our final payment is due the week after the event.

Statement of Work

Most contracts that I’ve read don’t have a statement of work, but I really like having one because it’s basically a summary of the items that your company is delivering AND if it’s REALLY good, it also has the services that your company WON’T be delivering.

This is basically the exact language from one of my contracts:

We're looking forward to being a part of the team for YOUR EVENT to take place on YOUR DATE.

It is my understanding that you, The Client, will retain Lauren Caselli Enterprises, LLC as an overall project manager, attendee liaison, event planner, on-site event manager, on-site liaison with vendors and staff throughout the on-site delivery process. Our job will be to {execute all those things mentioned above in detail} on X date, during X hours.

Please note that this is different from {all the things the client is doing, like event marketing, graphic design, project management, etc.). If you’d like, we’re happy to recommend trusted vendors to fulfill any of these needs.

Why do we include this in our contract? So that, before we get too deep into our scope of work (aka the nitty gritty, that we often need to REVIEW with clients so that they understand what we’re doing), we’re all on the same page about what work will be done.

Usually, the Statement of Work is the high-level, and the Scope is some of the smaller stuff, the tasks, the WHAT of the project.

Action: Write down a 3-sentence “Statement of Work” that would work for MOST of your clients. Include the type of project you’re doing, when it ends, and what type of work you’ll be doing for them (branding, etc.).

Scope of Work (revisions, tasks, etc.)

Ahhhh, SCOPE OF WORK! This is what often gets crept into (called “Scope Creep” which is one of our favorite things to complain about as service providers) and is what happens when you don’t have a really great definition of all the tasks you’ll be completing for your client.

Here is a sample of some of the “scope” items that we include in all of our client contracts:

•Bi-weekly meetings (in-person or over the phone depending on travel schedule) to discuss project planning progress, next steps, and project plan creation.

•Budget oversight and management

•Bi-weekly updates sent to team members

•Creation and management of a project plan that keeps us on track and makes sure we're each hitting our deliverables each month/week

•Hotel contract and room block management for staff and attendees (ensure we hit attrition, etc.)

•Creation and maintenance of overall internal and public facing agenda (will work with internal teams to make sure our agenda is consistently updated and translated to app, website, etc.)

I will be VERY honest with you, our Scope of Work has been developed over the years and we definitely didn’t have a great scope of work built into our process at the beginning. However, with each additional client, I’d add a few new items that we needed to manage in order to get the process right, which helped us streamline our process and then, helped us deliver much higher quality client service.

Action: Take your last client project and write down all the things you did for that client. I usually do this by reviewing past client agendas and client To Do lists (we keep our To Do lists in Google Docs for easy access by client).

Communication Preferences

This is one that I just started implementing in our client contracts which includes WHEN, WHERE, AND HOW we communicate with our clients.

A lot of times, with events or high-touch clients, they will email or text at all hours of the day and night. This was starting to stress us out and never gave us a “break” from client work, so we started instituting a communication policy into our contracts. The short of it is this:

  1. We don’t answer phones or respond to email after 5pm MST on Fridays or before 9am MST on Mondays.

  2. We will respond within 24 hours to our primary email address.

  3. We don’t respond to texts AT ALL except for days when we are on-site at the site visit OR at the event.

  4. We only do in-person meetings twice (one for a site visit, one for the final meeting prior to the event).

Honestly, this saves our clients MONEY. If we’re always answering their questions, if we’re always meeting with them, we’d need to bump our fees up exponentially to provide that level of service. But if we’re consistently moving the needle forward on their events and communicating once per week like we normally do? Then we’re in GREAT shape to deliver incredible value at a price point that is great for them.

How to Resolve Problems

This is one that I didn’t come up with but that I think is extremely important to note: most people don’t have a way to resolve contract issues in their contracts.

Some contracts are really light and fluffy (which is fine! Flip a coin if you want!), but ours basically says that we go to arbitration in Montana if there is a dispute that can’t be resolved between us as the service-provider and the client via communication.

I’ll be honest…it’s NEVER come to this so I’m not even quite sure how this would play out, but I do think that this is an important conversation to have with your lawyer (or any lawyer) to discuss how problems are solved if you can’t solve them between the two of you.

Changes, Cancellations, and Project Derailments

This is another HUGE piece that I haven’t devoted a ton of attention to in the past, but something that is really important as a business that schedules their client projects to not overlap. I’ve been in a corporate environment when projects get pushed back and it can get really messy for the business if their projects all start running into each other.

Basically, our contract says that changes and cancellations are billed hourly and we’ll let you know before we bill. When we start assisting on tasks that aren’t in our scope (sponsorship work is one of these that clients CAN hire us for, but often don’t until later in the process), we always send an email that says “Thanks for reaching out! This isn’t in our scope, but we’re happy to help at $XX/hour. Does that work?” Then, the client is reminded about the contract and can either ask us to add it into the contract OR can do the work internally.

Also, if a client goes AWOL for a few weeks, a “Project Hold” clause is in our contracts so that we can make sure we receive payment AND so that we don’t continue work that a client isn’t planning on paying us for (or if our contact gets fired or something and they decide to scrap the project with a change in leadership).

Action: Decide on how you want to handle changes to your contract. Will it be a coin flip? Arbitration? Written changes? There are TONS of stock “cancellation clauses” online that you can research to find out what best practices are here.

Also, I’d like to remind everyone that I’m not a lawyer (couldn’t force myself to take the LSAT), so there are some other legal things that need to be in your contract based on your business. This blog post is really meant for you as a business owner to understand the things that need to be in your contracts if you’re just getting started with client work. Always, ALWAYS hire a lawyer to review contracts before you send them out. A few hundred dollars in legal fees is WAY better than a lawsuit.

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Your turn!

What are your contract non-negotiables? Did I forget anything? Let me know below.

Lauren CaselliComment