How to Negotiate or Write a Business Contract to Protect Your Company
Contracts are essential to your company’s success. They help to detail the specifics of a transaction or business relationship and could protect you and your company’s assets if you get sued when things go wrong. In this article from the Burke Chamber of Commerce, you’ll learn how to make or negotiate a contract to help avoid making financial mistakes.
Why Contracts Are Important
Whenever you enter a business relationship with a client or a customer, it’s a good idea to have a signed legal document to spell out the rights and obligations of all parties. Sometimes your company will be the buyer, such as renting commercial real estate space. Other times your company will be the seller, such as offering a product or service to the public or other businesses. Either way, a contract details protections for each party. It may specify an exact dollar amount for the consideration, how and where disputes are resolved, and a termination clause that spells out when anyone can end the contract or if it ends automatically, such as ending when a service has been completed.
How to Negotiate Contract
Sometimes you’ll enter contracts that have already been written by the other party. This doesn’t mean they’re set in stone, however. You can always try to negotiate the terms of the agreement to make it as favorable to your company as possible.
Make sure you’re dealing with the right person who can make decisions. Come to the table prepared with research. You’ll want to know what the other party wants most as well as any leverage you could use to get the best outcome. Use the tools below to help make it easier and to help avoid making any mistakes.
Tools for Making a Contract
Whether writing or negotiating a contract, you’ll want to use tools to prevent any financial mistakes. One of these tools is accounting software to help you fully understand your company’s financial health before you head to the negotiation table. A cloud bookkeeping system can show and manage all your finances on one platform and gives you real-time insights on cash flow, which can be used to help you negotiate.
There will be other times when you may want to write a contract first, such as when you’ll be providing a service. You’ll need the right tools to help you present, edit, and modify the document. Use an online tool to extract PDF pages, making PDF files easier to edit and compress as needed.
Always Use Contracts
Whether you’re negotiating a contract or writing one yourself, it’s always a good idea to have a signed contract spelling out your rights and the obligations of everyone involved.
For more tips on starting or running a small business, visit your local chamber of commerce.You can always stop by Zenbusiness.com to learn best practices on successfully running your S Corporation in North Carolina, contract negotiation, managing a remote team and so much more.