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When I started selling crochet back in 2007, contract agreements were the last thing on my mind. I was pretty green and not very business savvy. Neglecting this step opened me up to being taken advantage of, cheated, and lied to by customers and contractors. The lessons I learned from those experiences are what help me with my current clients. Yes, I do use contracts even for small tasks.
It’s sad when people are not honest, but thank goodness that is a very small percentage compared to people who are upfront with you. All the same though, a contract, especially for those who do custom work, is a wise investment in your business.
Why do you need a contract? Isn’t email communication enough?
1. Customer Verification and Trust
A contract puts into writing what the customer wants designed or made. Every detail of your consult is included down to the yarn color, yarn brand, and agreed upon pattern. It helps build the trust necessary for a long lasting customer and business relationship. You want repeat customers, not just one-time buyers.
2. Clearly Stated Project Expectations for You
The contract will clarify what you will be doing, the time it will take you to do it, and the fee you will charge. This helps you know what is expected of you and also helps you check off various tasks in the project as you complete them. There won’t be any questions as to when payment is due, how much the project will cost, additional fees, shipping options, and any additional requirements.
3. All Terms, Copyrights, and Privacy Clauses
You know what your customer wants; your customer knows what they can expect from you so now you need to layout the legalities. This will finalize the payment due, shipping method, materials used, colors, design, timeline of project, and anything else you and your customer discussed. If you have a return policy you need to include that as well as any fees like a restocking fee or cancellation fee.
Are you using your own pattern? Are you using someone else’s pattern? State this in your contract and clearly note permissions granted and copyrights and trademarks. Both parties should sign privacy clauses and/or non-disclosure policies if needed.
An additional statement about electronic signatures might be helpful unless you actually mail the paper document to the customer.
Make sure to include your customer’s name, your business name, the date the contract was created, the date it is to be completed and signature lines.
Final Thoughts
Email communication, Skype, Telephone, or Video chat conversations can be used as legal documentation of your custom project but a contract will add an extra safety net.
It also helps you transfer your thinking from hobbyist to business professional. Remember this is a legally binding document which protects you and your customer’s interests.
You can download a sample contract and proposal here.
What other tools have you used to make sure you’re protecting your business?
By Sara Duggan from Crochet Business
Sara Duggan loves crochet and writing. She joined the crochet blogging community in 2007 as Momwithahook and is now the editor of Crochet Business.com.
CreativeIncome
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This is also useful for doing work for consignment… I am about to send a large order to a lady with a consignment shop, and this made me think that I should at least have our “terms” in an email before I send them off…. I don’t think she is going to cheat me, but I’ve never met her… As you stated, it is for BOTH of our protection. 🙂 That way I don’t get cheated out of my product, and she can prove that she is entitled to her commission.
Christeen, exactly. Selling your work via consignment is another use for contracts. When doing craft fairs you will be asked to sign a contract. You are a business so protecting both parties is important even amoung trusted connections.
When a client collected bespoke hat from my shop, I always fitted it on for her, asked her if she was happy with it and photographed her wearing it. This saved me no end of hassle with people bringing hats back after the wedding saying they didn’t like it and wanted a refund.
Zena, fitting hats works for in-person sales as you can fit your customer. Contracts still come in handy though just so everyone knows what’s going to happen.