A lot can be said about doing the little and sometimes free things that will put yourself in a more positive and credible light. Vagueness aside, I’m talking about more than getting inexpensive but professional business cards or even an elegant and simple website. I’m talking about making sure that you’re fully ready to take on clients. I’d managed, since deciding to work for myself, to avoid doing a service agreement. If you’re wondering what or why you need one, you’re not alone.
Sure, you can put up a storefront and you can have a small or even concrete idea about what services you want to provide and at what price, however, you have to go beyond the basics if you want to grow your business and protect your interests. I am a full supporter of Elance. It is the first and only freelancer website I’ve used. I found almost immediate personal success there and in so doing I tailored what would have been some semblance of a service agreement into the fillable area of my profile. I have since grown from solely engaging Elance clients and with that growth comes changes. Sometimes those changes you’re prepared for while others you have to just figure out, albeit, not alone.
It you’re in the business of providing a service, in my case, as a virtual assistant, you have to make clear to your clients and sometimes, surprisingly, even to yourself what it is that you will and won’t do and for just how much. Don’t allow the idea of it to overwhelm you. In truth, there are plenty of free sources on the web where you can find sample text for the service industry and position that you need. When in doubt, Google it! I devoted 12 hours of my own personal time to take the next step in becoming a more polished business. I even feel more in control as a result of having done so.
Why a service agreement and why now? It has been over six months since taking on my home business full-time but I had not reached a point where I felt I needed to devote the time to coming up with my concrete and negotiable terms in writing. When using a service like Elance you can pretty much get away with using a generic altered form of a resumé when submitting proposals for jobs. After the first few that I did from scratch each time I took what I realize now were the first steps in creating a document that I could use in all my business engagements. And with time and more experience under my belt I have been able to craft a document that is a lot more in line with who I am, what I represent and what I want to be doing with my business face. In a document like this your ego can have a little time to flex but it is also your opportunity to show your professional self. Show your future client just why you’re worth your rate of pay and worth getting the job.
Service Agreements often use a lot of legal jargon and can be dry but you can infuse some of yourself into how it’s crafted and how it’s presented. The key thing to remember is that this singular document is one of the first pieces of yourself and your work that your client gets from you. It’s very much like a first impression. Having a document that is thorough but concise and fair but stern will often save you and your client a headache when the project you thought you signed up for changes in scope and you’re taking on more than you may have thought you bargained for. Please note that I am not a legal expert and thus, this information is provided solely as a guide with the intention being that you the reader will research and reach out for help as needed from a legal professional or legal source.
In writing the service agreement for myself and my administrative services business I included areas such as:
Engagement Terms – Be clear on what you expect from your client and what they can expect from being in business with you. This can, however, be more of an overview, as you’ll see, there are several areas where additional specificity is also key.
Administrative and Support Services – Identify the type of services you are providing and mention its scope. You basically want to make it clear what it is you will do and address what needs to be done or what necessitates a change in the agreement.
Mutual Support and Cooperation – Outline the behavior that is to be exhibited by you and your client. Just because you’re getting paid for a job does it mean that you or your client should be able do so in a discourteous and non-collaborative way. Make open communication and respect of each other and each other’s time a part of your agreement. It also doesn’t hurt to note in this section that you are working as an independent contractor and not as an employee. Legally speaking, there are big difference between these two designations.
Fees and Payment Terms – Be very clear on what your rate is, if there are instances where your rate may change, the frequency you will invoice your client, how the client will submit payment, when their payment is due as well as what happens if a payment is late. Be sure to also address the worst case scenario, what may happen if your client consistently fails to make timely payments.
Retainer – If you require a monthly retainer or additional terms regarding your engagement with your client, be sure to include it. This is the document that you lay out all of the specifics so there are no surprises later.
Time Tracking – Communicate to your client how you will track the time you work on their project. In many cases you’ll need to provide documentation of the time you spent working, a good rule of thumb is to track it electronically with low-cost or free time tracking software. Of course, if your work is project-based and doesn’t require you to track time, you can note that here as well.
Office Hours & Communication – Establish when it is that you and your business is “open” and what your client can expect if they are to reach out to you during that time. Silly as it may sound, you may want to also include details that protect you from being railroaded by your client. Set boundaries. Sure, it’s your job but you also need to make it clear that you don’t work 24/7. Having set hours of operation also provides structure for you and establishes consistency in your work ethic.
Holidays and Time Off – You may or may not need this section, but it is important to address extended periods that you may not be working. In my case, I am the sole proprietor and the only employee of my business and just like those who work in a traditional 9-5 job, you too are human and should communicate with your client when they should anticipate you taking some personal time off. Don’t fall into the trap of not taking care of your own mental health and wellbeing because you were so busy chasing a few bucks. Be sure not to forget about yourself, your family and your friends.
Term and Termination – Make it very clear the length of time that the service agreement is in effect and how either of you can walk away from the relationship. You can make this section of the agreement as painful or as painless as you want it. Some choose to have a long list of things that must occur before the business arrangement will end. However, think about the discomfort of these situations for both yourself and your client and be sure to craft this section in a way that is respectful and considerate of you both. Breakups, terminations and the sort are never easy but they can be done tastefully and with respect.
Materials and Information – If the type of services you provide are dependent on your client providing you with information and materials, be sure you note that its accuracy is important. Alternately, if you provide the material and information, be sure to state that. Additionally, it wouldn’t hurt to mention what recourse you may have if the information you were provided with and that you worked with is less than clear or accurate.
Intellectual Property – Now this can be a really juicy area. Intellectual Property is far more important than some people think. Imagine the last idea you had that improved your business’s ability to be more productive. How would you feel if your client essentially owned that idea as a result of you working for them when you had the idea. Sure, that’s a really rudimentary way of putting it, but you want to protect yourself, your client and the things you create.
Ownership of Prepared Materials – Similar to, and can be included in, the Intellectual Property section, you may want to also specifically address if you will be able to retain any ownership of the work that you have done while working with and for the client or if, when the agreement has ended, you’ll be saying goodbye to that as well. Don’t be alarmed if this is a sticking point for your client. Depending on the industry or even the person you work for, they may require that you include the transfer of ownership of your work in what they’re paying you for.
Lien – Basically you’ll want to say that you reserve the right to retain materials in the event there is any issue such as a breach of contract or the lack of payment. This is a very common clause.
Assignment of Duties – Define who is covered under the agreement, if you will have your employees assisting with the work or if it’s just you, note it here.
Force Majeure – Oh yes, here’s where that legalese really rears its head. This section simply says that it’s not a breach of contract if your failure to work is a result of something unforeseeable and uncontrollable like an act of God, wars (yes, wars) and the like.
Indemnification – This section is your opportunity to state who will be responsible for such things like lawsuits and proceedings and things of that nature. In a nutshell you can say that your client will be wholly responsible for costs and so forth.
Confidentiality/Non-Disclosure – Respect goes both ways. You and your client should be able to expect that theirs or your confidential information is not made public, what happens if it does and in what instances where you would have to break this clause such as when compelled by a court of law.
Non-Disparagement/Anti-Defamation – This goes hand-in-hand with confidentiality. You and your client should not do anything that will publicly show either of you in a negative light. If you thought that your client was difficult to work with, it’s not your job to make your opinion the gospel on the subject. Similarly, if you weren’t at your best while working with that client, you don’t want one bad experience to ruin your good name.
Entire Agreement – This section simply states that the agreement supersedes any other previous written or verbal agreement. I’m sure you can see why this may be important. For example, if you quoted the client one price and then wrote it down as something else, you want to make clear what agreement is the governing and final one.
Warranty of Services – Who doesn’t love a warranty? Depending on your business type this can be as simple as you saying that you stand by your work and that you are legally able to enter into the agreement you will both be signing. No lemons here.
Governing Law – In this section you identify the county and state that you are conducting your business and that you expressly state that you fall under those laws, even the ones you may not have mentioned or know about. This is also an opportunity to state that if any legal action is taken that it must be done in your jurisdiction regardless of where your client is headquartered.
So, those are the sections that I included in my service agreement. I’m sure you can see how this can take a great deal of time even if you are taking bits and pieces from samples. Your service agreement can and most likely will have “fillable” or blank placeholder areas that include your rate of pay, the amount of your retainer and so on. Each clients’ needs are different but your service agreement doesn’t need to be recreated each time. So, if you’re not charging a particular client your retainer, it’s a good idea to have that area be fillable so you can put in $0. And for the amounts that don’t change, like for a deposit, they can be typed directly into the document.
And when you think you’re done, you’re not quite. If you provide a number of services or even just one, it’s a great idea to make your service agreement fairly static and include a required job addendum. This way, if you are, for example, offering one client your proofreading services but not offering those services to another, this can be expressly stated in a document that is meant to be tweaked. For me, I am a full service virtual assistant and so while I could’ve gotten away with simply incorporating it all into the service agreement, this gives me a degree of flexibility to tailor make the specifics of my job duties in a different document.
It should go without saying that you’ll want to sign (and initial if you want) the documents and if the service agreement can’t exist without the job addendum and vice versa, be sure you note that in both documents. With all of this done you’re in a far more solid and professional position to do what you do best, provide the services you enjoy to your client. Protect yourself on the backend. Any great relationship can go from great to sour and while many of them don’t, it’s best to be safe than it is to be very sorry. Your best intentions can sometimes not be met or received as you intended them to be.
And lastly, when it comes to delivering these documents, creating it using word processing software like Microsoft Word or Google Docs is great but when you don’t want to send an editable file to your client. You can use services like HelloSign or even EchoSign to convert it into a PDF that the software can then apply text, signatures and dates to within the software. I have experience with both HelloSign and EchoSign but personally use HelloSign as a result of having already used their sister product, HelloFax. Both HelloSign and EchoSign are legally binding and secure. And in the case of HelloSign, for my purposes I use its free version.