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Do I need a contract

by 9999
6 replies
I am a new member here so please bare with my question.

I will be contacting potential clients, that dont know me, via email. I will be offering them a service say that costs $500.00(it can be lower or higher).

I will be outsourcing this service, say the outsourcer cost is $250.00 and they want to be paid right away.

I am not sure how to handle this situation because I cold called/emailed this potential client but really they dont know me and if I ask for a deposit for the work they may think it is a scam.

I am worried if I dont get a deposit, then pay this outsourcer out of my pocket, this potential client can just walk away from the deal and I am out the $250.

How would you handle this situation?

Thanks.
#contract
  • Profile picture of the author 9999
    I posted in the wrong forum. Sorry.
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  • Profile picture of the author Warrior Ben
    Short answer, YES you need a contract. This is both for you and the business. Businesses will be more skeptical of you if you try to get money from them without a contract.

    As for payment, I recommend getting half up front and then half upon completion, but depending on the business they may just want to pay all up front. Offer them a 10% discount if they pay in full right away.

    Another suggestion, is don't call the contract a "contract"... rather, call it in a "Service Agreement", and label it as such. This has a much softer tone to it and people don't feel like they are getting caught up in some legal agreement. The reality is that a service agreement is a contract, but it just has a nicer tone to it.

    Also, one last suggestion... you might want to follow up your e-mails with actual calls. My experience has been that response rates are EXTREMELY low for e-mails. Most people want to talk to the person who is selling them something and quite a few will want to meet you face to face. Obviously if you are selling to people who don't live close to you, this is out of the question, but still doing an online powerpoint presentation will help increase conversions. There are many different options for doing online presentations, but I prefer GoToMeeting.com. If you are looking for a free version, use http://join.me

    I hope this helps!

    -Ben
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  • Profile picture of the author Mac the Knife
    I never use a contract, and have never had a problem, but based on the language I use, I am confident with my approach. Charging set up fees is common though, so you should be able to get 50% upfront.

    Just to reiterate, I have quite a few clients, contracts are not a requirement...most of my clients have been with me for 6-12 months as well. If you deliver, and you know more than they do, it is not likely they are just going to walk away from your services...good luck!

    Mac the Knife
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    • Profile picture of the author kenmichaels
      Also a thing to consider is your form of payment, for instance,

      You can have a 10 page contract, in 30 type set, in the clearest of terms
      and if your client pays with a CC, they can charge back upto a YEAR later.
      The contract means absolute squat. your only remedy is court, or fight the charge back which is a long drawn out process, and you can even win it, just for them to renig on the charge back again ... and then have to start the whole process over.

      This is true for any form of payment that is not cash.

      Think of the contract as a warm and fuzzy, or a closing tool. do not for one second think of the contract as a means of protection for either party.

      The above post suggesting to use the term Service Agreement instead the word contract is pure gold.
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      Selling Ain't for Sissies!
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  • Profile picture of the author Morphius
    Must have a contract
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  • Profile picture of the author Robert Jackson Jr
    I use a one-page Letter of Agreement (I know, a rose by any other name . . .). But my LOA's are really short and to-the-point. It let's them know what they are getting. And, aside from my hosting clients, they can walk away whenever they want.

    I have six-month and annual terms for hosting because I learned a long time ago that it just doesn't make sense to do month-to-month terms for hosting. At least not for me.
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