What Did You Learn the Hard Way?
Reflecting on the evolution of my client contracts over the years has been insightful. However, it also brings to mind a costly lesson from when I didn’t use a formal contract with a client several years back, resulting in a $7,000 loss. It got me thinking—many of us have probably learned valuable lessons the hard way, particularly ones that hit our wallets.
Here’s mine: I undertook a major clean-up project for a client, with an agreement via email for a specific fee per account over a one-year period. As the project progressed, the client continually added more accounts. I assumed these were included under our ‘per account’ email agreement. When it came time to invoice, the client vanished. It became painfully clear that we had different interpretations of ‘per account.’ Without a contract, I was out $7,000. To add salt to the wound, I had declined several other projects because this client promised ongoing Bookkeeping work, which never came to fruition. An expensive lesson learned.
One response
Learning experiences that cost us financially (or in other ways) can be both painful and valuable. Your story about developing your client contract is a testament to how crucial clear communication and documentation are when it comes to client work. Here’s a key lesson I’ve learned the hard way, broken down into a narrative that might resonate with you and anyone who’s faced similar challenges:
The Cost of Underestimating Scope Creep
The Situation:
A few years back, early in my freelancing career, I landed a project with a client that I was particularly excited about. It was a comprehensive marketing strategy overhaul for a startup, which was exactly the type of work I wanted to be doing. We discussed the project extensively over a series of calls and emails. I thought I was being thorough by saving our email exchanges and summarizing call notes, but I did not formalize any of our discussions in a contract. I was eager to begin and assumed a “gentleman’s agreement” would suffice.
The Misstep:
The project started smoothly, but as we proceeded, the client frequently added new tasks and requested revisions that were outside the initial scope. They’d say things like “Since you’re working on this, can you also handle that?” I wanted to keep them happy and saw potential for further work, so I didn’t push back. As you can guess, these add-ons piled up, consuming more time and resources than I’d accounted for.
The Fallout:
When I sent my invoice, including additional work hours, the client was taken aback by the cost and unwilling to pay beyond our “agreed” amount. They referred to our email discussions, where I had vaguely acknowledged their additional requests, as a basis for sticking to the initial estimate. Without a written contract specifying the scope and potential for extra charges, I had no footing. The financial hit was substantial enough to strain my business for months.
The Lesson Learned:
Always Use a Contract: No matter how casual the job may seem or how well you know the client, always draft a contract. It should clearly outline the scope of work, payment terms, and a process for managing changes and additional requests.
Define Scope and Stick to It: Be explicit about what is included in the project scope. Offer a system (like change orders) for handling additional work, so expectations and costs are clear from the outset.
Communication is Key: Don’t assume the client shares your understanding