There are numerous tasks to complete as a new business owner, from incorporating your business and setting up your accounting systems to building your team and acquiring clients. To name a few of these crucial tasks, you must select a legal structure that best protects your business, hire an HR manager to interview and recruit new staff, and choose between in-house or outsourced accounting and HR services. The list goes on and on.
When starting a new business, there are also several types of business contracts that should be drafted. The most common types of business contracts include sales-related contracts, general business contracts, employment-related contracts, and leases. Review this guide from the Fulton Montgomery Regional Chamber of Commerce to learn how to create solid contracts that protect your organization, mitigate risk and conflicts, and create consistent revenue for your business.
As a type of legally binding agreement, business contracts are crucial. Most importantly, they serve as a visual representation of your relationship with a client, employee, contractor, vendor, or any other party — helping to hold each party accountable over an agreed period of time. And because business contracts clearly outline each party’s responsibilities and legal duties, they also help to increase business efficiency; prevent conflicts, legal problems, and misunderstandings; and maintain compliance in the workplace.
When getting a business off the ground, you’ll need to learn how to create solid contracts before hiring your employees and contractors, buying and selling products and services, and setting up new business partnerships. And depending on the type of contract you’re drafting, your business contracts might include the following types of information:
Names of all parties involved.
Payment amounts and due dates.
Deliverables (e.g. the products and services).
How and when the services will be delivered and accepted.
Expiration date of the contract.
Dispute resolution details.
Termination clause that details how and when a contract can be terminated.
Before creating your business contracts, however, there’s one crucial step that should be taken: Hiring an outsourced accounting firm to set up and manage your bookkeeping systems.
Finalizing a business contract takes time, and negotiations are very common. Here are a few negotiation tips and strategies to keep in mind as you navigate this lengthy process:
Research the other party. Before presenting the contract to the other party, make sure you’ve thoroughly researched them and/or the company they represent. Google them to learn a bit about their motives, and connect with industry colleagues to gather information about the counterparty’s goals and interests. The more you know about the other party, the more you can talk about how they’ll benefit from your products or services.
Focus on facts. Do your best to keep your personal feelings out of the negotiations. Present research and facts and avoid making statements that begin with “I feel” or “I think.” If you’re not comfortable asserting yourself, however, be sure to consult with your fractional CFO or HR manager. These professionals can play bad cop so you don’t have to.
Take it one step at a time. Start by writing a draft that serves the interests of both parties involved. Keep things positive and light, focus on the key objectives, and add the more complex issues further down the road. Both parties will be invested at this point, and your discussions should go much more smoothly.
After writing your business contract, you’ll need to present it to the other party. This could be an HR manager, independent contractor, fractional CFO, business partner, or client. The important thing is that you’re presenting the contract to the right decision-maker and that both parties have signed and dated the document.
As we mentioned above, contract negotiations are common. Your contracts will be modified and edited many times before they’re finalized, and contract management tools can help to keep everything neat and organized. A few contract management tools, for instance, include Avokaado, PandaDoc, and Gatekeeper.
While the above tools can be used to manage your business contracts, other tools can also be used to edit and extract pages in a PDF. As one example, you can use a PDF rotator to turn pages from landscape to portrait or vice versa with the click of your mouse. That way you’ll never send over a document with documents that face opposite directions. And if you find that you left documents out of an existing PDF document, there’s a quick way to add a page. Use an Adobe service that lets you add new pages in a few steps: log in, select, organize, and save!
Business contract attorneys can assist you with drafting contracts for your new business, but accounting professionals are also key players. Your finance team knows how to read, understand, and reconcile your contracts and balance sheets — and collect payments from clients and customers — helping you to run your company more smoothly and profitably.