Congratulations! You have decided to form a consulting firm so that other business owners may access the wisdom you have accumulated in your career.
Here’s a tool to help you prepare a tightly-focused Consulting Agreement that won’t slow down your sales process.
The post Using a Sales Contract that Speeds up Getting to Yes, showed how you can create a concise sales contract that gives you a competitive advantage over companies that still insist on using a 20-page monstrosity.
You can use the same consultative approach with a business-loving lawyer to produce your Consulting Agreement.
Here’s how to adapt that approach for the idiosyncrasies of consulting:
- Decide now, before you start seeking consulting engagements, the limits of your business.
- What types of work will you do and (maybe more importantly) refuse to do?
- How much cash flow do you need each month in order to take care of yourself and your family?
- Do you need to own the intellectual property produced by your work?
- Identify the risks inherent in your type of consulting, and then think about what a fair way would be to allocate those risks between you and your client. In what ways do things typically go wrong, and who should bear the burden when they do?
- Performance risk – what things might prevent you from completing your defined tasks?
- Implementation risk – which party is responsible for implementing your work product? What happens if the client is responsible for implementation, but decides not to implement (or delays implementation)?
- Collection risk – how credit-worthy is your client? Consider asking for a partial payment before you start working.
- Evaluate the risks of bodily injury, reputational injury, and cyber injury. Consult with a risk and insurance professional who can help you identify and manage these risks before something goes wrong.
Let me know if you would like help creating your consulting agreement, and for referrals to excellent risk professionals.
Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.
© 2018 Michael S. Oswald