If you are a freelancer or a social media manager, you need to have a service agreement before you start working with clients.
Many new social media managers often forget to implement this important step within their business when they take on a new client.
Before you work with any new client, you need to make sure that they sign a service agreement to protect your business.
What is a service agreement?
It is a legal contract which outlines the terms agreed upon as part of a professional relationship.
It’s usually used by freelancers, consultants and service providers when working with new clients.
A service agreement outlines the terms of service and the relationship between the client and the service provider during a project or for ongoing work.
It helps to cement the expectations of each party's duties and responsibilities and ensures the parties are on the same page when it comes to the project.
Plus, because it's a legally enforceable document, that means each party has legal remedies in the event the other side breaches the agreement.
For social media managers, freelancers and consultants, these agreements can ensure your protection.
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Why should you have a Service Agreement for Your Business?
A signed contract provides a solid foundation that will help create certainty and stability in any business relationship.
It will minimize the potential for disputes. Many freelancers can be discouraged by the costs of having a thorough agreement drafted, but it can be a key investment to avoid much more expensive problems in the future.
If your terms are comprehensive and clear, and your client confirms their agreement, this can save a lot of headaches down the road if a project goes off the rails.
The best way to create a service agreement is to get it done by a lawyer.
The problem is that many small businesses and startups can't always afford a lawyer when they are just starting out.
If you can't afford a lawyer there are plenty of templates that you can purchase online written by legal professionals.
(At the end of this article, there's a list of websites where you can purchase templates).
What should be included in a service agreement?
Who’s and What’s
First, you should include a brief description of your business and the business of the other party should be included, to give context to the business relationship.
Also, each party should be clearly identified throughout the agreement.
Next, you should include clear terms about payment and billing. Do you bill by the hour, or by the project?
How often will send your invoices? How long does a client have to pay the invoice, and how should they pay? Will there be any late fees?
You should also consider including a ‘charge’ cap, which limits the amount of outstanding debt the client carries. You’ll be able to stop work on the project until they’re paid in full.
Consider putting in terms regarding your schedule. Will you be available for set hours during the week? Do you want to work on the weekends?
As a freelancer, it can be tempting to want to work 24/7, but you need boundaries.
By including them in your service agreement, your clients are clear about when they can reach you, and when they can't.
You should include terms that describe how either party can terminate the relationship. For example, suppose you are a web designer.
What if you send an initial design submission to a client, and they state they are dissatisfied and want to terminate the relationship?
You want to protect your ideas and ensure you’re compensated for the work you’ve done.
You should set a minimum rate you’ll receive should the project be terminated early by the client, and that they cannot use any work done by you if they terminate the relationship.
You should also set clear grounds for when you can terminate.
If they do not pay you, or if they are uncommunicative to your requests, you should be able to terminate the relationship.
By making sure these are clearly spelled out, you and the other party will be on notice as to your expectations.
In any business relationship, it is inevitable that the parties will disagree on something. Hopefully, by acting in good faith, it can be resolved.
But, if the parties reach an impasse, or there is a breach of contract, you should consider whether you want to take initial steps before proceeding straight to court.
You can include an agreement to go through mediation, where a neutral third party will help you and the client reach an agreement.
This is often much cheaper and quicker than resorting to litigation.
While it is always a good idea to get a legal professional to review and draft your agreements, the cost can be prohibitive for individuals just starting out.
A simple web search will reveal multiple sources for templates. In fact, some states actually offer templates through their secretary of state.
City Halls and other municipalities might have forms available to encourage small business ownership in the area.
If you draft an agreement yourself, the best strategy is to review templates from multiple sources and include language you like from all of them.
But even if your agreement is simple, just having one can go a long way in ensuring you and your clients are protected.
Resources for Service Agreements:
There are a number of websites that have service agreements and contracts written by legal professionals.
Below is a list of sites where you can purchase an affordable template for your service agreement.
About the Author:
Danielle Prado is a licensed attorney who specializes in civil and family law.