Journey of a Serial Entrepreneur

Icon

How to get from where you are to where you want to be

Clear Contracts

“A verbal contract isn’t worth the paper it’s written on.” Samuel Goldwyn

Contracts are a critical component in any business deal. It is the document which binds two or more parties to an agreement they have reached. In my first couple of startups we didn’t pay too much attention to the detail which goes into contract writing and suffered as a consequence. Ever since, I have always had a legal counsel advise the companies I work with on how the contract should be drafted. In essence the pattern I have seen is, that the most effective contracts are those which state clearly and concisely what has been agreed upon by both parties. If any level of ambiguity is left in this equation it could have serious ramifications in the future.

The question that arises is that since legal counsel is expensive, how is a startup supposed to pay for it on a limited budget? You should look into your network of friends and see whether anyone is studying or practicing company law and can help you out. If not then  look at the internet to find reliable sources where you can buy some ready made templates for specific deals. This website helped me when I was drafting  agreements and covered the things that need to be looked out for when writing contracts.

Whichever method you choose make sure that you research it well before signing any piece of paper. Signing is the easy part, it gets a lot more complicated when you want to exit the contract in a clean and quick fashion. In the near future I will have a couple of legal guests writers contribute some articles to help you out in writing  clear, concise and unambiguous contracts.

 

Advertisements

Filed under: Partnerships, , , , , , , , , , ,

2 Responses

  1. case says:

    Marketing Sales Promotion by Chet Holmes

    The carpet cleaner client of mine sent me recordings of some of their salespeople talking to customers. I’m listening to this salesperson talk to a 78-year-old woman who uses a walker to get around. She’s calling to have her rug cleaned. They set up the
    appointment for the rug to be picked up and taken back to their plant for a thorough cleaning. Wall-to-wall has to be cleaned in the home. For rugs, they can take them out of the home and really get them cleaned in
    their plant, where they have a giant
    washing-machine-like structure to completely submerge, clean and expertly dry your rug. So I’m listening to the conversation with the elderly woman and it goes like this:

    Woman: Well what about the pad under the rug? It’s kind of dirty, too.

    Salesperson: How old is the pad?

    Woman: It’s about 15 years old.

    Salesperson: Oh, that’s too old. If we tried to clean it, we’d obliterate it.

    Woman: Well I guess I’ll have to go get a new pad.

    Salesperson: Oh yeah. You’re definitely going to have to replace that.

    Since I’m the consultant and I know how expensive it is to get new clients, I think, “They should sell pads. Heck, they’ve got the rug right there in the plant. They can put the rug on the padding, cut it out, roll it up and send it right back with the rug. It’s a great up-sell.”

    So I get the owner on the phone: “I have a great idea for you. You should sell pads.” He says, “We do.” I tell him, “No you don’t, actually” and I play him the recording. The owner brings the salesperson in and
    asks her why she didn’t offer to sell this old woman a pad. The salesperson says, “I didn’t want to seem too pushy.”

    This carpet cleaning company actually had six excellent up-sell options. The problem was getting the salespeople to offer them. In addition to carpets, they can clean your couch or your bed. The same technology of using really hot steam to clean your
    carpet applies to the furniture you sit on (or your dog sits on) all day. Studies show that the average living room has five million dust mites in it. Our bodies are equipped to deal with those mites, but it’s
    their feces and the bacteria that feed on it that can cause bacterial infection. (As you can see here, and will learn in depth in the next chapter, market data can be very motivational.) Steaming that bed or couch
    kills germs.

    We gathered all of the salespeople in a workshop and asked them, “What would you say is the best method for offering every client every service every time? One of the salespeople suggested we put the six
    services they offer right on the order form. As they’re talking to the client, they would be able to check off all six things on the order form to show they offered them. This was a great suggestion so we decided to test it and implement it as a procedure for
    the company. We followed ten simple steps and, after several months of pigheaded discipline and hard work, we had it so that every salesperson offered every service to every customer every time.

    Chet Holmes has worked with over 60 of the Fortune 500 companies as America’s top marketing executive, trainer, and strategic consultant. Chet is the author of the best selling book, The Ultimate Sales Machine
    (#1 business book on Amazon, #1 Sales and Marketing book on Amazon, and also on NY Times best seller list). Chet has identified and developed the 12 core competencies that are proven to provide the main structure of truly great companies and he has developed more than fifty proprietary methods to
    implement them. To learn more about how to double the sales of your company, go to http://www.howtodoublesales.com

  2. […] 5. Clear Contracts: Contracts are a critical component in any business deal. It is the document which binds two or more parties to an agreement they have reached. these contracts have to be written clearly, concisely and in an unambiguous manner. To learn more about writing effective contracts please click here. […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: