Think It’s Not a Big Deal? Why Even the Simplest Partnerships Need a Contract

Why Even the Simplest Partnerships Need a Contract

What I've Learned from Our One Woman Shop Partnership

We’re writers and consultants, designers and photographers, front-end developers and store owners. And despite our differences, if you’re anything like me, emails with some variation of “Hey! I have an idea we could tag-team” pop up in your inbox frequently.

Entering into even the most casual of partnerships begs us to pause and protect the business we’ve worked so hard to create. Sure, “partnership” conjures official, legal agreements, but in actuality, a partnership can be anything from an Instagram loop giveaway, styled shoot, affiliate link, co-hosted webinar or e-course, conference, breakfast panel, or even a guest blog.

But for something as small as these examples, do you need a contract? After all, you’ve got a budget to balance, receipts to file, proposals to draft, and deadlines to meet. Who has the time to comb through an email thread and delineate terms and conditions?

No contract? Here’s what could happen

Time and again as I wade the freelance waters, I turn to Christina Scalera, a lawyer for creatives. According to Christina, yes, you need a contract even for small partnerships: “Ninety percent of [creatives] can avoid lawyers -- the expense, heartache, and more -- by communicating upfront and honestly in a contract,” she says. “Lack of a contract can lead to problems down the road if you’re not careful.”

Without a contract in place, we could:

  • Finish up a styled shoot to find no photos of our 12 hours of calligraphy work were even submitted to the publication
  • Partner to form an Instagram community, only to find a sneaky cohort is slow to hand over the login
  • Trade headshot photos for copywriting with a writer who just can’t seem to ever get to your bio

But first: Is the collaboration worth your time?

Before I send you into a downward spiral of researching what goes into contracts (editor’s note: start here!), pull out a pen and paper to figure out whether this collaboration is truly worth your precious time. If your hourly rate isn’t already on a sticky-note on your screen, follow these steps to find a rough calculation:

  1. Take what you need your salary to be (after taxes), and divide it by 0.7. That dumps back in an estimated 30% in taxes.
  2. Add your monthly business expenses, times 12.
  3. Divide that number 52.
  4. Finally, divide that by the number of hours you’re willing to work each week.

Back to the sticky-note: It helps me so much to think back to my PR agency billable days every time a joint venture, guest blog, affiliate, or partnership opportunity flurries across my inbox. Picture yourself on the project -- for me, that means seeing the project fit into my ink-splattered world of calligraphy and copywriting projects. For you, that may mean thinking through the creative brief, wondering how many hours you’ll log in Photoshop and Illustrator, and how many rounds of edits might be needed. Consider exactly what this partnership project require from you, then ask yourself this:

Are both the partnership ROI and the time I’ll invest in the partnership worth my hourly rate?

In many times, yes! As Christina mentions, guest posting is a great example: Essentially you’re doubling your reach. Market research tells us that it takes anywhere from 3 to 12 touches to nab that customer, meaning leveraging your voice by getting in front of others’ communities can be a rock-solid business investment.

Reassuring you a bit more, don’t fret over “legal-ese” verbiage: Technically, if both parties understand the language, it can go in the contract. It’s your catch-all. At the end of the day, much like my desk holds my calligraphy pen, nib, inkwell, gouache tube, and sketchpad, a contract holds together all the little fragments of email threads and promises between collaborators, tying them neatly together.

Truly, while you could manage promises de facto through your email thread, I’m a fan of a drawing up a quick proposal within my Honeybook account and emailing it over. It takes under an hour -- totally within my budget considering my hourly rate and what lack of a contract could cost me.

What to include in your contract

Like any good millennial, I’m in a constant state of information overload, and need an actionable takeaway for an article to stick. So, here’s your simplified partnership checklist! As you send over that proposal partnership template, review these questions:

  • Am I clear on the profit split, if any?
  • Did I write out dates of deliverable deadlines -- and project termination? (And reminder, this doesn’t mean relationship termination!)
  • Have I addressed the exit strategy, and listed the means that could allow the contract to be terminated and how the assets would be divvied up if so?
  • Who will own assets -- both during the project and moving into the future post-partnership -- from email lists and social media accounts, to final copy and leftover swag bags?
  • Did we jot out a list of tasks, and who will be responsible for what?

There you have it! Simpler than it sounds, right? Let’s save the freelance world of lady boss friendships-gone-angsty, one kindly worded contract at a time.

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4 Tips for Revamping Your Contracts and Protecting Your Business as a Solopreneur

Setting Up Shop

I despise the me-versus-you mindset that colors some client relationships. This mentality creates an unhealthy situation where the creative is just trying to get paid, and the client is grasping for the most bang for their buck. Of course, clients can be forgiven for wanting the best possible product for their lives and businesses, and creatives gotta eat. We’re all human. But still, this dynamic isn’t pleasant and I strive to avoid it wherever possible.

I’ve found that a clear, concise and no-nonsense contract is one of the best ways to keep a working relationship on the rails and über-friendly. It removes the stress of wondering what’s included or expected, reduces the possibility of anyone taking advantage, and provides a third-party enforcer of the terms so no one has to be the bad guy. It’s a nonpartisan ally we can all call to our aid, but only if we’re careful in its design and construction.

The beauty of a client-based business is that it evolves as time goes on -- and so must your contracts. Here are some of the crucial tips I’ve learned over the years about crafting a contract, that you can take into account when creating yours:

1. Make financial commitments and timeframes clear

I’ve never actually had a problem getting paid, but I have had to wait longer than I’d like. And you hear about fellow solopreneurs getting stiffed all the time. Truthfully, there’s no iron-clad way to prevent this, because no creative worth her salt is going to demand full payment before beginning a project. It’s unprofessional, it’s mistrustful and it’s just not done.

I do, however, take steps to try and streamline the payment process and increase the chances of getting that final check. For one thing, I always include in my contract the number of revisions I provide for the stated price. That way, if a client asks for more (than two, in my case), I can point to the contract. I also include what additional revisions cost, so that we have an already-agreed-upon way to proceed if necessary.

Furthermore, I clarify timeframes for various steps of the process -- i.e. deposits due at the beginning and final delivery of materials. Some clients are impatient, or will “forget” what you agreed to, so it’s great to have this in writing. Plus, it covers your derriere. While I’ve never gotten litigious with a client, you best believe I want the ability if I need it.

2. Remember that contracts are not intuitive to clients

With the explosion of the digital age, we sign contracts all the time. Every time you check that little box for another app or website sign up, it’s a contract. Because of this, many of us are used to breezing through and signing on the dotted line. Don’t let your clients do that, or you might be sorry.

I’ve learned the hard way that a contract is only as clear as the words you put right up top. For instance, I sometimes do design work, and once worked with one client while I was still in launch stage and working at quarter-priced rates in order to fill out my portfolio. Despite this, she thought she was getting top-quality pro work, the kind she’d receive from a 10-year veteran. When I requested understanding for my newbie status, she did not grant it.

In this case, it needed to be in my contract that I was starting my business, streamlining my process and not promising the same quality she would have gotten from an established creative charging four times as much (if not more). And once you put the terms in your contract, be sure to discuss them verbally.

3. Limit scope creep like a boss

Scope creep happens. All the time. Recently, another one of my clients sent me a job for 1,000 words. When I returned it to them, they told me they were happy with my work, and went on to insert it into a larger piece they were working on. They then emailed me all 11,000 words of their full project and asked me to edit for consistency… you know, since I’d been the one to write a small piece of it.

Um, no.

Even if you dutifully note the number of revisions you offer, as suggested above, clients will still try to take advantage by asking for “small fixes” or “just one more thing,” forgetting to include vital information up front and wanting you to include it later on. Or -- as my client did -- just wildly overestimating your willingness to help for free.

This is why it’s important to have a line in your contract stating how much you charge for continuation of work. Something along the lines of, “for revisions past two rounds, or additional work beyond the scope of the project, I charge $XYZ.”

4. Clarify incentives up front

Let’s be real about incentives: they’re not necessarily that great for you. If they bring in more business? Well, awesome. But sometimes all they are is a discount for work you would have gotten anyway, without benefiting you or your business in any real way. So... be careful.

If you offer incentives, stick to the terms. Honor them if a client is really buying two things for a 2-for-1 deal, and tell them to stick it if they ask for half-off one thing. Don’t play ball with old clients who want the new client sign-up discounts; it’s not for them. If you really like someone, you can consider it, but respectfully request that they don’t tell others. This goes for working at reduced rates for friends and family, who need to understand that as a businesswoman your goal is to charge much more than that when you work for others.

Use your contract as your new best friend

Working with clients can be a challenge. We’re all set in our own ways, opinionated, and looking out for Number One. A good contract, though, can create a team out of what might in other scenarios become two opposed parties. I believe strongly in its power to bind and build a bond through mutual understanding, and I hope you can one day feel the same.

What other situations have come up that have taught you important lessons about what to include in your contracts, fellow solopreneurs?

P.S. Want more information on effective contracts? Check out Small Business Bodyguard for the legal perspective and Stress Less & Impress for the process/workflow side of things!