Reprinted from the Baton Rouge Advocate with permission.
WorkWise® by Mildred L. Culp
June 18, 2012
Small-business owners are always looking for ways to generate revenue. Most don’t enjoy spending their time selling and marketing. Making the most of contracts won at the cost of time and energy facilitates business development, according to Jerry Tatar of Jerome A. Tatar Attorney at Law in Northfield, Ill.
Attorneys can develop contracts encouraging the new customer or client to generate additional revenue. Bruce Waterhouse, of counsel to Nicola, Gudbranson & Cooper LLC in Cleveland, Ohio, observes that “contracts aren’t a changing area of the law, but they’re very important and often overlooked.” What business development provisions assist small-business owners?
Tatar started including some of the provisions actively about two years ago after noticing that with a sale, businesspeople and their customers reach a dynamic level that can stall.
“You’ve already built momentum,” he explains, “and someone sees value in what you have to offer; so why not use it to your advantage to make another sale?” These provisions might spare you from building momentum again. For example, he wrote a personal trainer’s contract as a work-out agreement alerting clients to supplements and exercise equipment his client sells. Capitalizing on the initial enthusiasm of a person who wants to lose weight, Tatar “included a check-off with the supplements and equipment, because it’s easier (to sell) now than later,” he says.
Similarly, he locked in terms for an estate sales contract to capture services beyond appraisal, such as property upkeep (maintenance) and the removal of remaining items for buyers, charitable organizations and trash facilities. After estate sales are over, these provisions are already in place and don’t need to be negotiated. “This makes the contract more vital – a living thing,” Tatar comments. “It also shows you have more to poffer.”
Attorney-CPA-entrepreneur Bradley Franc of Houston Harbaugh PC in Pittsburgh, Pa., began inserting these provisions as frequently as possible at least ten years ago to serve clients more as a business advisor. He speaks of the estate and financial planner whose upscale clients agree to introduce him to another person who might benefit from his services. In 15 years this provision has cost the planner one client while he’s gained many more.
Franc suggests including an agreement “to renew or extend the term of the agreement,” a “reseller” provision for you to pay a referral fee if a client refers another client to you and a placement fee if the client wants to hire one of your employees. If you’re a contractor, consider a clause stating that if a client receives bids from other subcontractors, you’ll be rebated upon submitting favorable competing bids.
Business owners with deep pockets may be able to enforce “a ‘right of first refusal’ as a revenue enhancement tool, because it gives you a competitive position in the marketplace,” Waterhouse states. It saves you work by bringing market information to you and helps you make an efficient decision about accepting an assignment for which you might have competitors. He also suggests a “requirements” clause to make certain your client buys a specified product from you alone.
Lay the groundwork for additional revenue by instructing your attorney to write all of your contracts with business development provisions. Make the very most of your very first sale.
(Dr. Mildred L. Culp is a nationally syndicated business writer. She welcomes your questions at firstname.lastname@example.org. © 2012 Passage Media. Reprinted with permission.)