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Protect Yourself: How to Structure Your Consulting Contracts

On the importance of contracts to your consulting business and what they should include and why.

Entrepreneur

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Consulting-contracts

Now that you’ve laid the foundation for your new consulting business, it’s time to think about two important tools you’ll need to be an effective consultant: the consulting contract and the client report.

A contract is a legal document between two or more parties that involves what attorneys call “an exchange of value.” That is, if something of value (money, goods, services) is provided in return for something else (in your case, consulting services), then the agreement is considered to be a contract. And it doesn’t matter if the task or service you’re performing is quick and easy, or complex and time-consuming.

Related: Why Your Business Needs Employment Contracts

You must always protect yourself by creating a contract the client will sign. After all, this is your livelihood at stake, and if something goes wrong, you’ll need solid legal documentation to make sure you get paid.

Contracts protect both the contractor and the client. To make sure there are no misunderstandings, you must be sure every contract you write is clear, specific and detailed enough to cover all the important points or clauses.

Your contracts should be written in plain language, which is clear and easily understood prose. This doesn’t mean, however, that you don’t need an attorney to look over your contracts or help you create a template you can reuse.

In addition to spelling out all the terms of your agreement, a contract can help you avoid what’s often referred to as “project creep,” in which you begin with a specific task that morphs into more work than you agreed to as the project proceeds.

Having a signed contract that details exactly what you’ve agreed to do will help you rein in projects before they take on a life of their own.

Contracts can be very simple one-page documents, or they can be 100 pages long, depending on the subject matter and how many complicated issues they cover and in how much depth.

They also can take the form of a letter of agreement, which is shorter and less formal but is just as binding as a formal contract.

Related: Readying Your Business for Big Contracts

Contract-ideas

Here’s a short list of what should be included in every consulting contract:

  1. Full names and titles of the people with whom you’re doing business. Be sure they’re all spelled correctly.
  2. Project objectives. Making a list will help you achieve the project goals and figure out when the job is done and you can stop. (“Project creep” can go both ways.)
  3. Detailed description of the project. Write a global description that specifies every aspect of the task you’ve been asked to do.
  4. List of responsibilities. Record exactly what you’ll be expected to do or the major steps you’ll take to complete the project. It can be helpful to create a list of checkpoints you can refer to as you work. You might also want to have the client sign off on each phase of the project to ensure his/her satisfaction with the work as it progresses. If so, the sign-off process should be included as an item on your list of responsibilities.
  5. Fees. In addition to mentioning the agreed-on fee, you can include a payment structure.
  6. Timeline. Specify the start and end date of the project, and indicate any pertinent dates in between (including those dates on which you wish to have the client sign off on your work in progress and/or payment dates).
  7. Page numbers. This might sound basic, but the idea is to keep the client – or you, for that matter – from adding pages to the contract that not everyone has agreed upon.

This is not an all-inclusive list. Your attorney may recommend including other information, such as legal definitions, legal recourse in the event of nonpayment, nonperformance clause (as in what will happen if either party reneges on his or her obligations), and so on.

This is just one more reason why it’s a good idea to have your legal eagle draw up your contracts or give the ones you write the once-over before they’re presented to clients.

In addition to the details discussed above, every contract has three key elements that must be present for the contract to be valid:

  • The contract must contain an offer. An offer is simply something proposed by a person or business. For example, an offer for one of John Riddle’s fundraising clients may include language like this: “. . . JR will act on behalf of the XYZ nonprofit organisation as a fundraising consultant to raise the necessary funds required for . . .”
  • Each contract must contain acceptance. Acceptance is when one party accepts the terms offered in the contract. It’s usually a good idea to put a time limit on any contract or letter of agreement you offer a client. For example, you might state that the offer will expire in a set number of days unless it is signed and accepted.
  • Each contract must contain consideration. This is the amount you’ll be paid. For example, the contract language could say something like “. . . in exchange for a monthly payment of R50 000.”

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How to Guides

(Podcast) Phone Calls Often Solve Email Problems

Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.

Nicholas Haralambous

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Emails solve problems – but they also create them. When a real problem arises in your business, is an email the best way to solve it, or should you pick up the phone and give your customer a more personal experience?

Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.

Listening time: 3 minutes

Related: (Podcast) Being An Entrepreneur Is Painful

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Company Posts

Why Choose ISO 90012015 As A Starting Point For Your Business

Implementing all elements of the standard can help your business, but what parts of the ISO 9001:2015 standard in particular should prove to be of most beneficial for yours? We’ve listed a few below.

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Ask for any Entrepreneur’s to-do-list, ISO Implementation and certification may not always be at the top of it. Businesses are constantly faced with financial, operational and socio-economic pressures, while business owners must make decisions on projects related to “cost vs the benefits”. But here’s why ISO 9001:2015 is a reasonable investment.

If your businesses is certified under ISO 9001:2008 you had three years to transition to ISO 9001:2015, if you don’t transition, your certification will become redundant. The three‑year period started on the date the new standard was published in September 2015. Don’t wait, your Day 1 of 365 days starts now.

Related: How ISO Certification Can Help You Access Market Tenders

Implementing all elements of the standard can help your business, but what parts of the ISO 9001:2015 standard in particular should prove to be of most beneficial for yours? We’ve listed a few below. It may also protect your business (against big business)

How can ISO 9001 make the difference for my business?

Start by viewing the costs as an investment that allows you to better assure your clients, improve your productivity and raise your ability to compete.

Your certification to the standard, can attract reputational benefits and establish a ticket to levels of business that non-certified companies certainly cannot obtain. This may be the most practical time to implement ISO 9001 for your business.

As the full process can take up to 6 months, you need time to plan and execute your transition to the new standard and it will require work, commitment and changes to the habit of doing things.

This is why it’s vital to begin early and hire consultants with a 100% certification record with any SANAS (South African National Accreditation System) or International Accreditation Body. It gives the guarantee and expertise you need.

iso-process

Your 6 steps to getting ready for ISO 9001:2015

1Establish Processes

  • Documenting and Implementing processes in your business can yield great benefits as your business grows. Setting common processes in the beginning will result in consistency in the products and services, this sets a sound foundation for expansion and future growth.
  • Save time, cost, and ensure delivery. This takes place when you have new employees and point them to processes that are well established and well documented.
  • It allows your staff to feel confident in doing their job, knowing there is a process to follow and with the help of the Document Control Process, you can always re-engineer the process to adapt to change, this results in Continual Improvement.

2Formulate PDCA cycle (Plan-Do-Check-Act)

  • The fundamental basis of the ISO 9001 standard is based on Edward Deming’s PDCA Model. If implemented effectively it can benefit any type of business however large or small you are, it’s practical. The Method is also used by fighter pilots.
  • You build a culture of “careful planning, monitoring, and adjustment of actions” this speaks volumes to your employees, and your clients benefit in return.

3Increase your sales by using ISO 9001

  • By using valuable customer feedback, you build up information to monitor and review your client’s perception of your products and services, this feeds into a corrective action process, which results in a continual improvement to create relationships with existing clients and attracting new clients.
  • Most Tender Requirements from Government, Local and International Companies require ISO 9001 as a qualifier to their procurement process. This gives them the assurance that a Third Party Auditor is auditing an effective Quality Management System aligned to International Standard that has effective process control and will measure client satisfaction.

4Develop an attentive mindset to risk and opportunities

  • Risk and opportunities is the latest introduction to the ISO 9001:2015. This allows businesses to identify potential and current risks in their process and mitigate them before it’s too late, the fundamentals of a successful business.
  • By cultivating a culture where your team have a sharp eye for risk and opportunities will serve your business well.
  • Profits will be maximised while risks are spotted early and can be minimised.

5Take control of change management

  • As the saying goes, “Change is the only constant in the 21st century”. The inability to handle change and adapt accordingly is one of the main reasons that many businesses do not survive through the first two years of existence.

Related: 7 Steps To Achieving Our Higher-Level Goals

6Setting goals and objectives

  • Goals and objectives are key fundamentals of the ISO 9001:2015 standard, these are tools to assist in attaining your companies Vision.
  • When you get into the habit of setting, reviewing, and taking action against objectives, the end results is growth and driving improvement.

It is clear that implementing ISO 9001 can take your business to the next level that benefits startups to established corporates. We stress again the vital importance to begin early and hire consultants with a 100% certification record with any SANAS (South African National Accreditation System) or International Accreditation Body.

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Company Posts

How ISO Certification Can Help You Access Market Tenders

Want to leap-frog your competitors by building your business credibility?

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ISO Certification

2017 has been a challenging year thus far. A decline in exports, slower growth in private consumption and fixed investment has caused the economy to contract in Q1 and enter into its second technical recession since 2009. This means that it is now more crucial than ever to break away from your competition to survive in this economy.

The question we as businesses are all asking, is how can we become more competitive during these tough times?

The answer is ISO Management systems and certification.  The implementation process allows organisations to streamline their processes and benchmark to international standards that have worked for the likes of Toyota, Coca Cola, MTN SA and many more.

The ISO Certification gives your clients the national and international credibility that they are looking for, in you as a business.

What are ISO Standards?

ISO is not an acronym, it is derived from the Greek word ISOS, which means equal and is interpreted as The International Organization for Standardization, which comprises of various National Standards being superimposed into one International Standard. There are approximately 21500 ISO Standards, from Quality, Health and Safety, Information Security, Environmental, Energy and many more. (The International Organization for Standardization)

The ISO standards set a precedence for companies to create a Management System which comprises of Policies, Objectives, Processes, Risk Assessments and Procedures with the aim of being able to provide a consistent service.

The standards requirements can assist a one-man tuck shop to large corporates such as Google.

Think about it this way, when you buy a house, does your insurance company grant you a policy without an Electrical Certificate of Compliance? Do you buy a brand new laptop, mobile device or any other electrical device without a warranty or guarantee? Will you send your child to a hospital that does not have standards in place? Will you buy vegetables that have not undergone the necessary food safety controls?

We, as consumers, have all become cautious, hence the birth of ISO Certification. An independent body (Watchdog) such as the SABS, BSI, TUV, and Bureau Veritas conduct regular audits against your processes and the International Standard to create the assurance you are looking. How ISO Standards And Quality Management affects SMMEs

That is why your company must invest the time and money to implement the value adding systems with the right consultant. This in turn will provide your current and potential clients the assurance that you have the relevant processes in place to deliver what is required and will provide you with the competitive edge. You are not too small to become ISO certified.

Where do I start if I want to become ISO Certified?

where-do-i-start-if-i-want-to-become-iso-certified

ISO Management systems work on a four-phase approach to develop, implement, train and assist organisations through certification.

The following will give you an overview of how the process works:

Phase 1: GAP analysis & Identification of processes

  • GAP Analysis Audit on the choice of your ISO Standard
  • All Staff to undergo awareness training on the ISO Standard (Requirements)
  • Analyse & identify current systems (Policies, Objectives, Risks, Processes and Procedures) within the company and gather information.

Phase 2:  ISO Management System Development

  • ISO Management systems manual (Policies, Objectives and Mandatory Procedures)
  • Process documentation and Standard Operating Procedures
  • Risk assessments and tools to assist in Monitoring, Measuring and Analysing. 

Phase 3: Implementation

  • Coaching and change management of Top Management and attaining Leadership Values.
  • On the job training with all staff and workshops on the ISO Management Systems
  • Internal Auditor & Maintenance Training
  • Internal Audit, non-conformances, corrective actions and reviewing of risks
  • Management Review Meeting and Review of all Statistical Analysis.

Phase 4: Certification

  • Stage 1 Desk Study Audit with the Certification Body
  • Stage 2 Certification Audit, Non-conformances and Corrective Actions completed
  • Annual Surveillance Audits to justify continuous improvement.

ISO standards aren’t rigid rules, but rather a set of generic requirements and guidelines to what we as a business should be following.

It’s the basics of business, we tend to overlook the basics and focus on profits, which jeopardies our quality and service.

Your clients are becoming more advanced, better informed and their expectations are growing. Having ISO Management Systems provides organisations with the competitive edge over their competition, by gaining National/International recognition.

In fact, any organisation, whatever their size or industry sector can give themselves a secure future by introducing ISO Management Systems. Remember to look for management systems that can guarantee 100% certification with any certification body such as SABS, TUV, BSI, Bureau Veritas, DEKRA etc.

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