Do you use service agreements and contracts in your business? If you do, then you are doing things right!

For those of you not using contracts, you should reconsider. Without these contracts, your customers probably don’t feel 100% peace of mind. Really, in computer consulting, what are they paying you for? They are investing in you to keep their business running smoothly. They are, in essence, paying you for peace of mind.

Real companies…professional companies use contracts. Go try to get a “business” cell phone contract at any carrier and see if they don’t use contracts. If you want to get a deal one multiple lines and possibly bundle in an internet connection or other service, odds are, you are signing a contract.

Contracts help your business because you have a revenue stream you can count on. You have monthly bills and with contracts, you have monthly revenue that you can expect. You then have the luxury of forecasting, future planning, etc. It’s difficult to determine when you can hire your first, or next, employee when you can’t say, with certainty, how much revenue you will have next month or over the next six months.

To a small degree, contracts also help to protect your business. In many contracts is verbiage that indemnifies your business from liability due to losses not directly caused by your personnel. There is insurance for the latter, but if you are working on a clients system and catastrophic failure occurs, you may or may not be liable, depending on the situation, but you are much more protected if you have a contract for that client or project.

Many small startup computer consultants tend to ignore the necessity of contracts. How do you think a company of any size will perceive your organization if you run your business like this? They expect contracts. If you don’t use them, you will look very “small-time” to them. Is that what you want?

-Zachary M. Morvik