In my coffee shop podcast with YourBFG they asked me for my ‘mantra’ that kept me going… I remembered my mother’s words to create confidence about ‘great things coming in small packages’, which is what I do when I create short and simple contracts to help project teams do great things.
Like learning to drive, we get into bad habits with contracts quite quickly (at best forgetting to read them, at worst ignoring them altogether). Perhaps that’s because no-one goes into construction because they like paperwork, which is why we have lots of projects starting without contracts, or we copy & paste bad contracts from the internet. But it’s also because they are embarrassed by their terrible contracts…
Mike said that many SMBs do not have strong contracts, because business owners focus on what they like to do, and that doesn’t include the legal side! After discussing whether it is desirable to have a watertight contract (read my view) or a foolproof one (more here) we agreed that:
The more your contract says, the more you will be looking for your contract to provide a silver bullet and not talk when there are disputes
There’s no amount of information in a contract that will keep you out of the courts if you end in disputes.
My most painful lesson was when I learnt was that it’s often better to walk away from work if you cannot get a contract than to keep your fingers crossed that it will all work out in the end (ie work with not for your clients). My greatest success was when someone who heard me speak said that my advice to use contracts to build trust had changed her life (as she had to agree to restructure her family business).
As David says (1) a contract can be very good thing and (2) a contract can build relationships. They can be part of your brand, and describe what’s great about working together, rather than, as Mike says, just the ‘serious bit’.
My tips to anyone running a SMB business are:
- Single espresso: Read your existing contracts and read them objectively (ie what would your client think?). Ask do the elements mostly build or break trust?
- Doppio: Start challenging the clauses that you do not understand, by saying “what does this clause do?“
- Cappucino: What you wrote is what you meant… so write your own contract and keep control of the meaning of your contracts (don’t delegate the running of your business to a lawyer to turn into something bog standard).
How often do you agree to work together but the contract halts the process? If your contract is becoming a business prevention mechanism, my tip is to remember that a contract is just a tool to help you do business, and you should fix your contracts and use a great tool. Don’t be scared of your contracts!
Mike wasn’t convinced that business owners can write their own contract, so how did I persuade him? If you want to hear David’s 5-word contract for a door on a submarine then listen to the podcast here.