For the next four weeks, we’ll be taking a look at 4 ways you can use the law to help you keep more money in your business.  We’ll start with the simplest and move to the most sophisticated of 4 strategies to keep more money.

So, here we go.  Keep More Money Strategy No. 1:  Craft a Cash Flow Positive Client Contract

Yep.  If you are a service provider, your client contract is THE single most important contract (and structural element) in your business.



1.  All the money your business earns flows through (you guessed it!) your clients.  Got leaks, gaps, stalls, miscommunications there, you’re going to have problems (and a stress headache).

2.  Cash is Queen in your business.  Without it flowing consistently and adequately, your business will struggle (and eventually go under).

So often service providers who hire me to work on their client contracts, start out with fee arrangements that benefit their clients, but take a toll on their businesses.  The way they charge and collect their fees creates cash flow problems or just plain old cash leaks.

(Believe me, I’ve made this mistake too.  Being a lawyer technically only goes so far.  I’ve had to live it too in order to provide the most strategic advice.)

A great example of this is a service provider who came to me to talk about a conflict with a client.  The relationship had terminated at that point. The service provider had completed and delivered over $40,000 of work and had only been paid a $10,000 deposit months ago.  Additionally, the scope of the project had well exceeded the initially agreed upon proposal and the client was now not paying the balance.

Every service provider’s nightmare right?  So, what can you do?

Craft a Cash Flow Positive Client Contract.


Make it easy for your clients to say yes.  Make it also benefit you.  (And stick to it.  This is part of your ideal client profile.)

To help you avoid cash leaks (and headaches), I recommend crafting a client contract that includes the following:

1.  Cash flow positive revenue model

My best tip:  Choose one of the following models that works best for your business:

  • 1316455063recurring revenue (a monthly retainer or a payment plan agreed to up front for a term)
  • upfront payment (optimally, for a package of services)
  • phased payments tied to deliverables (think a third, a third, a third, for example)

2.  Clear scope of work (and scope creep provision)

My best tip:  Define what is NOT included as well as what is.  Holding different assumptions about what is not stated clearly will get you every time.

3.  Missed appointment fees (or additional charges for client delay in providing information)

alarm-clock-icon-psd-mMy best tip:  Structure this so the client forfeits something rather than has to pay something additional.  And state your policy clearly at the outset.

4.  Stop work provision

My best tip:  State explicitly that work will stop for non-payment until payments resume as originally agreed.

5.  Delivery & transfer of work and its ownership (if you create deliverables) upon full payment

My best tip:  Creative service providers, make sure you own the work until you are paid in full, then transfer ownership.

It doesn’t have to be all legalese-y to do these things.  Really.  You can have a contract that sounds like your business and the tone of the relationship you want with your clients.

It’s not about a sprinkle of magic legal dust.  It’s about clear, honest, fair terms that really work for you (and your client).  It’s about walking through your entire client engagement and delivery process and rooting out the maddening things, the vulnerable points and the industry standards that just plain don’t work for solo and small businesses—and replacing them with terms that work to build your business and deliver to your clients.

Are you with me?

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© 2014 Rebecca Prien