58 - The Importance of Contracts

Welcome back to the Scale Your Small Business Podcast with your host, Jillian Flodstrom. Today, Jillian is diving into an incredibly important subject for a business owner of any size, but especially one that’s looking to grow, scale, and thrive. We’re talking about contracts--why they’re important, how to make sure you’re going through the process properly, and what to look out for.    On a personal side, Jill has had a first-hand experience with the importance of contracts. She was in business with her former business partner for over 10 years. She’d invested her entire being into that business. There was a succession plan they had in place: he was going to retire, and she was going to take over that business. Then unbeknownst to Jill, she was notified along with others in the company that he was selling the business--but not to her. There was no courtesy of a personal conversation, just an email. Had there been a more formal, written contract and not just a verbal one, this would’ve been a completely different story.    Sometimes involving attorneys and your team in certain business dealings can be uncomfortable, but it is super important because if you don't, if you don't have anything in writing, if things are not spelled out, you could be left in the lurch. Right now, you may be getting along with the person that maybe you're in business with, or you want to get in business with, but things can change. The person can change. Their decisions can change. Sometimes mental health needs to take priority.    If these essential documents are written out, it becomes something the court could enforce.    Even with close friends, family, and loved ones--sometimes they don't have a choice. Sometimes you are collateral damage. By getting these contracts in place ahead of time, you set yourself up to feel much better. If something comes up, it's very easy to edit it now, while you're both still friends.   Consider everything--EVERYTHING--when writing out your contract. If it's something that you're going to take possession of a business on a certain day, what day is that? What is the plan once you've taken possession? Are you taking over clients? Are you starting over fresh? What about those systems that the current business might be using? Review, review, review before you sign.   Make sure you build a team around you that you can lean on, rely on, and look for guidance.    Finally, don’t do this under stress. Think carefully and do it with intention! Make sure you have your ducks in a row.    Key Takeaways   Involve attorneys and other legal help to ensure everything is clearly spelled out in every business dealing you’re involved in.  By writing out these contracts, you give the court something they can enforce. Don’t shy away from contracts with loved ones. Edit and review now, while things are smooth to lay a safe foundation for your business partnership.  Make sure you build a team around you that you can lean on, rely on, and look for guidance.  Don’t do this under stress. Think carefully and do it with intention! Make sure you have your ducks in a row.