Contract or No Contract

Discussion in 'Growing and Managing a Business' started by falconator, Jul 6, 2012.

  1. falconator

    falconator
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    I started a website design company that builds your site, pays for hosting, buys the domain, offers unlimited updates, does SEO, basically builds your site and keeps it running and updated for as long as you want for a monthly fee. Originally my thought was to have the client sign a 6 month auto renew contract before I start building the site and then the first payment would be do when the site is finished. This way I know I will receive payment for the site I build. But now I'm second guessing the contract. So I'm taking a poll, what do you guys think, contract or no contract?
     
    #1 falconator, Jul 6, 2012
    Last edited: Jul 6, 2012
  2. Joseph.Shivell

    Joseph.Shivell
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    Is there s separate charge for building the website, and then a monthly charge for hosting, or do you amortize the cost of building the website through the first 6 months? This would be a factor when determining the length of the contract. A possible alternative would be to charge for the website first, and then auto-charge for the monthly hosting on a month-to-month basis, giving the client the option of stopping whenever they wish - with sufficient notice of course. This would address any concern the client would have about a long term contract, and would give you an incentive to give them the best service you can, so they have a reason to stay with you.
     
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  3. falconator

    falconator
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    I don't charge anything to build the website, I just charge a monthly fee to keep the site running and updated.
     
  4. falconator

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    Sorry, I was a little contradicting. I should have wrote, the contract is so I know I will receive enough payment over the 6 months to make building a site for free worth my time. Not "This way I know I will receive payment for the site I build."
     
  5. Fergal

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    Maybe you could offer your clients two options along the lines of the following;


    1. Charge an upfront payment for the design of the site and then a smaller monthly fee for hosting and maintenance. As you are paid for the design up front you wouldn't need to tie the client into a contract.
    2. Don't charge anything up front and charge a higher monthly fee to cover the design, hosting and maintenance. With this option, tie the client into a six month contract, to ensure that you get the full payment for the site design.
     
  6. Business Attorney

    Business Attorney
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    You DEFINITELY should have a contract that spells out the basic terms. It doesn't need to be long or contain a lot of legalese, but it needs to set out the essential terms of your agreement with your clients.

    By the way, I think you'll be sorry if you really offer unlimited updates. You would be amazed at how unreasonable some people can be. There should be some reasonable limit that no sane client would expect to exceed, to protect you from the crazy ones.
     
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  7. falconator

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    Initially I had thought of putting a limit on the updates but I changed my mind to be competitive with other companies but I think you may be right.
     
  8. Fergal

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    In any business there are some clients not worth having, because they take up so much of your time with their demands, that they will never be profitable and they take your focus away from your profitable clients. I agree with Business Attorney that you need to try and avoid taking on and servicing those types of customers.
     
  9. falconator

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    Great advice, I think I will keep the contract. Thanks all
     
  10. Mark T

    Mark T
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    They are right.

    In many ways, some clients tend to be very demanding, and tend to ask too much of what you can only do.
    You should make a contract of your own, and should also know what it takes to render those kind of services. Simply, those services ain't easy for you in the long run, and you do not want your own interest be compromised.

    Also know your clients well for you to be able to protect your business and its credibility. Weigh things first and stay on a level where you think you can do it. After you get into it, then step up into the next level until you grab what it takes to render more services and even unlimited ones.


    Thanks,
    Mark T.
     

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