how to protect yourself as business owner

As most of y’all know, I’ve been in business for a little over three years now! Up until last month I’d worked without any serious issue with my clients, so when things started getting bumpy with a client I’d been working with since January I sort of freaked out. The crazy thing about the situation is that when it happened to me, I reached out for support in The Shelancers Club on Facebook, and I found out that what was happening to me had happened to several other creative business owners in the group. To top that off, just this last week I logged into a different group, and I saw that the same thing was happening to someone else.

Luckily for me, I have a pretty robust contract in place for all of my clients that cover several different topics in case things are unclear on my website or in my emails or if things just go wrong during the project. Since I know a lot of y’all are also running creative small businesses, I wanted to share a few key contract terms to help you protect yourself in case (heaven forbid) anything go wrong for you!

Payments + Refunds

First up: how do you accept payments and how do you handle refunds. For most small business owners, like myself, you’re probably taking 1/2 of the payment up front with the final 1/2 due prior to the design being installed or files being delivered. Make sure that is clear in your contract. It’s also important to state here how exactly you take payments. Is it via PayPal? Check?

Of course, make sure you also mention refunds. For creative businesses, after you’ve put so many hours in, it’s really uncomfortable to think about not getting paid for the work you’ve done, so how do you want to handle that? Make sure your statements here are super clear!

Term + Termination

This section of your contract doesn’t have to be super confusing. First, state how long the contract is in effect. For example, if you’re creating an affiliate agreement make sure the other party knows how long it’ll last and what will happen when it’s over. This is super important if you’re working on retainer instead of a one-off project.

Things may get more awkward around the idea of terminating the agreement, but it’s so very important to include this in your contract. I’ve only had to cancel with two clients, and this portion comes into play just as much as the refunds section. Be very clear of what your client will be responsible for regardless of who cancels the project. Don’t forget about what you’ll do. I like to mention that any confidential information that has been provided (think: logins) will be destroyed if the project is cancelled.

Rights

This section is tricky for some freelancers and small business owners. When you’re just getting started you never really know who should have the rights to the work created. I went back and forth on this for a while until someone made a really valid point that if you (as the creator of the work) retains rights, the client might be able to expect you handle copyright and trademark paperwork. Gross. No one wants to have to deal with that for someone else.

If you sign over all rights to the client, be sure to mention what they’re allowed to do within those rights. For example, I don’t allow manipulation of my work. It’s also good to let your clients know what rights you’ll retain. For all of my work, my clients know that I retain the right to post about their project here on this blog, in my portfolio, and use it for promotional materials as long as it’s not in direct competition with them!

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The Legal Stuff

This section is usually the big lawyer terms that can be difficult to read. If you’re just getting started, you might not have this in your contract, but it’s still important to put in – just in case. Things that would fall into this section would be whether or not you can be held liable if something goes wrong with their brand or website, if the contract can be transferred to someone else, and if (heaven forbid) things went to court – where that would take place plus whether or not the client would be required to pay attorney’s fees.

Writing a contract can be tricky, so if you’re not sure what exactly you need in yours and how to phrase things, definitely consider hiring a local lawyer or at least chatting with someone on Legal Zoom to get things in order. When it comes down to it, you’re not just protecting yourself by using these terms in your contract, you’re also protecting your client.

Note: It should go without saying that I’m not a lawyer, and I’m not dishing out legal advice here. Contracts are super tricky, as I stated, which is why I’m not suppling my exact phrasing or even my contract. If you’re at all unsure about what I’ve mentioned, what you have in your contract, or what you should add – consult with a lawyer.