Biz Bomb – The ONE Thing You Should Never Leave Out Of Your Client Contract
You absolutely need a contract with your clients to ensure your butt is covered when things come up. But what is the MOST important thing you should include?
The #1 thing you absolutely must have in your client contracts is the Absence Rule! In this Biz Bomb episode we blow your mind with WHY you need this rule in your contracts to make sure those clients that disappeared last year don’t reappear asking to restart their package.
An Absense Rule is when you set a period of time where if the client is gone for that period of time and decides to return later (no joke, Kendra has had clients appear 2 years after going MIA) that you have a rule that says in order to restart their package, they need to pay a percentage of their original package cost or an additional fee to get started.
An Absence Rule is going to save you time & money down the road. Let’s say you do have a client that shows up after two years of not being present. In those two years a lot may have changed – your schedule is more busy, your packages may have changed, or you may have increased your pricing. Without an Absence Rule, that client could come back and have the same package for the same price even though your new clients are all paying more and for a new package! Plus it’s extra admin work to get the old client back on track.
In order for your client to notice these sort of rules, we suggest making important rules like the Absence Rule a check box. That way down the road if they come back and say they didn’t know about it, you can show them that they checked off that they signed for it.
At the end of the day, YOU are the person that gets to run your business, your clients don’t get to do that. So YOU are the one that needs to put these rules in place. Don’t be afraid to go overboard and be a tyrant with rules. Of course you can make exceptions if you feel you need to. By having the rules in place on the contract, you avoid having to break all the rules for EVERYONE and can break the rules sometimes for EXCEPTIONS.
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Hey guys, welcome to another biz bomb for the 360 Help Biz podcast. I am your host Kendra Perry, and I'm hanging out with you today and we're going to be talking about the number one thing that you should never leave out of a client contract. This is going to be juicy, because it took me a while to figure out that I actually needed this in my contract when I was a health coach. It's really important, and if you don't have it in, then you could cause yourself a lot of headache and you could totally get taken advantage of.
Number one, why are client contracts so important? It's really important to set forth the expectations and the boundaries with your client, and make sure they sign off on them so that they know what they're getting, and they know how they need to interact with you, and how things are going to go with your coaching program. Your contract will definitely evolve over time. Mine started out as a one page thing and evolved into a five page contract, because as I came across certain situations, I would realize that I definitely needed that in my contract.
Don't be afraid to go overboard when making a contract, because the thing is, if something happens with a client and you want to make an exception, you can always make an exception. For example, if you say, I don't give refunds, but something crazy happens to this client and their house gets blown down by a hurricane, you can make an exception and give them a refund if you want. But, if it's not in your contract and they request a refund, you just have to do it for them. Your contract is really about covering your butt, setting forth expectations, and then you can make adjustments or make exceptions as you want.
Today, we're going to be talking about the number one thing that you absolutely need in your contract and that you should never leave out, and that is a absence rule. For example, let's say you have a six month coaching, a private coaching, program, for example. You want to run people through it in about six months, but some people are going to fall off track. Maybe they're supposed to be booking appointments with you every two or three weeks, or maybe you do that in advance with them. You book out all their appointments in advance, but then they end up canceling a bunch, and they go off the radar for a couple months, or maybe even a year.
I've had people come show up out of the woodworks after two years or even more. You need to have an absent rule that says, if you were absent for this amount of time, I always use three months, then in order to restart your package, you have to pay this fee, or this percentage of your original package, because, the thing is, is you're running a business. If people come out of the woodwork a year later, you might not actually have space for them. That might be a huge inconvenience to you, because your schedule is already booked up or you're working on other projects.
It's also going to cost you more money with your virtual assistant, or just cost you more time with admin to get this person reset up, to relook over their case, and then to start up their package again. Also, if they show up a year from now, you may have increased your package prices. You may have doubled them or tripled them, and now someone is getting your time for a fraction of the price that your current clients are getting your time. Plus, it's more work because you got to relook at their case.
I really suggest having an absence rule in your contract. That might say that you have a three month absent rule, absence, I don't know why I can't say that word today, absence rule that says, hey, if you go MIA for three months, in order to restart your package, you are going to have to pay 10% or 20% of your original package fee, or you're going to have to pay a $200 fee in order to restart your package. I suggest that people have to check that box. Usually, how I have it set up is, for every clause of my contract, they actually have to check a box that says, yes, that they understand.
That means when, a year later, they go off the radar, they go MIA, and they show up, and they're like, "Hey, I want to finish my package," and you're like, "Oh, you need to pay this 10% starter or restart fee," and they get upset, you can literally send them the contract and be like, "Hey, you signed for this in the contract. You were aware of this." Although, they probably didn't read it. Let's be honest, nobody fucking reads contracts these days, but they should, especially when you're working with someone in that capacity. You can literally show it to them and be like, "Look, you agreed to this. You knew this. You knew you weren't meant to go absent for longer than three months, and so that's why you have to pay this restart fee."
I recommend sticking to it. Sometimes you're going to feel like an asshole. You're going to be like, "Man, I feel like an asshole. This person, they're going to come up with their sob story. They're going to be like, 'Well I've got a divorce. I was really busy, and this happened, and this happened, and this happened.'" Sure, if you want to make an exception, go for it.
This is really important. You're running a business. When people sign on with you, you're taking them on based on the availability you have in your schedule and based off of what is currently going on in your schedule, and in your business. If you don't cover your butt, then people are just going to disappear and come out of the woodwork all over the place even several years later. Maybe they paid $200, and now you're charging $2000. Well, that's a pain in the butt. That is a clause that you 100% want to put in your contract.
I hope this video was helpful, guys. If you're hanging out on IGTV with me right now, in the comments, if you found this helpful, give me a heck yes. I would love to know. If you're on Instagram and you're listening to this episode on your smartphone, make sure to screenshot a photo of this episode and share it to your Instagram stories. Mention 360 Help Biz podcast. Let us know your take homes, and we'll share it to our stories. That is one of the greatest ways you can support the podcast, by letting us know that our episodes are helping you and that you want more content just like this one. Thanks so much guys. We will see you in a week from now, I'm tongue tied today, in a week from now with our next awesome full episode.