Services
Services
Services
Services
Please note: This post contains affiliate links and we may receive a commission if you make a purchase using these links.
A s a small business owner, you might have entered an agreement or started work based on good faith as opposed to a signed contract. But what if there is a disagreement over product delivery or an issue with a contractor?
Not having a legally binding contract leaves your business vulnerable and susceptible to hearing, “You’re being sued.” Small businesses stand to lose anywhere between $3,000-$150,000 in litigation alone. The cost of running a business without contracts is not only financial — the stress and emotional hardships faced can forever change the nature and well-being of your business.
Get Unlimited Access to 25+ Ready-to-Use Contracts.
Order TodaySo how does a contract protect your business? It does so in multiple ways. Let’s look at a few ways contracts can protect and strengthen your business.
A study by the Small Business Administration reports at least 53 percent of small businesses are involved in a lawsuit at one point. Therefore, it’s best to have all your bases covered by creating bulletproof contracts from the get-go.
Here are a few key elements and hidden clauses in contracts you should watch out for to avoid a “gotcha” moment.
Now that we know how crucial contracts are and which hidden clauses to look out for, let’s discuss some of the most common contracts for small businesses .
Ownership/Partnership Agreement: Formulate a partnership agreement even if you are running a business with a friend or family member. This agreement includes details on a partner’s role, profit percentage and a contingency plan if a partner wants to split or passes away .
Employment Agreement: An employment agreement is one of the best ways to protect your business concerning any misunderstanding with an employee. It typically includes job title, responsibilities, payment and benefit terms and termination clauses.
Independent Contract Agreement: As a small business, you’ll likely be working with other businesses or vendors. A vendor contract can include rates, terms, project scope, deliverables, turnaround times and even liability clauses.
While running a business, unexpected things can always pop up. Signed contracts minimize risk, protect your assets and strengthen your working relationship. And, if by any chance, a matter does go to court, it ensures you have a strong case.
Seeking to get contracts in place for your business? Bizee’s Business Contract Library is the perfect place to start. The library has templates of several common small business contracts. Bizee's team can even help you write or review contracts that will keep your business protected.
Get Unlimited Access to 25+ Ready-to-Use Contracts.
Order TodaySwara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters. Read more
Get Bizee Podcast
Join us as we celebrate entrepreneurship and tackle the very real issues of failure, fear and the psychology of success. Each episode is an adventure.