Three Essential Contracts for Creative Service Providers.

Good contracts are essential to running a successful business. No matter the type of business you are running, contracts will play an important part. Even if the contract is as simple as a return policy for your goods or privacy policy for your website, businesses run off of contracts. If you are a service provider, there are some very important contracts to use for your business from day one to be sure you are protecting yourself, your business, and even your clients.

If you’re a creative service provider - any graphic designers, web designers, creative directors, social media managers, photographers, or other creatives out there providing services for clients?? - these three contracts are going to be essential in running and growing your business.

1. Client Services Contract

A client services contract outlines the relationship between you and your client. So often people begin work without their client contract in order, because no one expects (or likes to think) their client relationships may sour. But, it happens more than you may think. A well drafted client services contract can make dealing with unexpected events easier, and can actually reduce the likelihood of a dispute or lawsuit.

Your client contract should be a clearly defined agreement, that is specific to your niche, and protects both your business and your clients. There are many standard terms that your client services contract should cover, including scope of work, payment terms, termination provisions, dispute provisions, and more.

One extremely important contract provision that creative service providers need to consider is the type of intellectual property ownership and use rights that you and your client have after the contract ends. Determining who owns what at the end of the agreement is key for creative services, as the entire purpose of the relationship is the creation of that creative asset. Since copyright laws in the US are essentially automatic for the creator, ownership and intellectual property rights need to be addressed.

Different creative services will need different types of intellectual property provisions. For instance, as a photographer, it can make sense to retain ownership rights of your photography. You may want to use the images however you want for your business (things like personal blog posts; submissions to vendor lists; submissions to online publications, like Junebug Weddings or Outdoor Photographer; creating prints for sale; etc.). But, your clients are hiring you to provide them with specific photos for their use. So, what do you do? You would provide your client with a “license” to use your photos for their own use, while you maintain ownership rights.

On the other end, consider a graphic designer. As a graphic designer, you generally will not be using the assets you create for your clients in your business other than in your portfolio and promotion of your work. Your client is the one that will be using the assets, so it makes sense for them to have ownership of the intellectual property after the contract ends. But, you most likely will want to be able to use the assets in the promotion of your business, right? So you it would be important to define your license and right to use those assets after the contract expires.

Different types of creative service providers will need different types of provisions within the client contract to be sure you are protecting your business in the best way possible.

2. Independent Contractor Agreement

It is so common for creative services providers to start their businesses as solo entrepreneurs, but at some point most hire additional help. If you’re a creative service provider looking to grow, you might be considering hiring an independent contractor. Maybe you’re looking to take on more clients, so you’re thinking about an assistant or an associate designer. Maybe you’re feeling like you’re spending too much time on admin business tasks so you’re thinking about hiring someone to help with the internal things like Pinterest or social media.

Hiring an independent contractor instead of an employee is easier on you as the business owner. Hiring employees requires additional work and considerations, as there are many rules, regulations, and responsibilities that you as the business owner have to follow (things like tax withholdings, setting up payroll, etc). On the other hand, when hiring an independent contractor, while there are still rules and regulations, you generally have less responsibilities as a business owner since independent contractors are technically self employed.

One important thing to know about hiring workers, is that how you treat your hire, determines if their worker status, not the line in the contract that states they are an independent contractor. The key with treating your independent contractor like an independent contractor and not an employee is control. You the business owner should have control over the result of the work done, but not the how, when, or where the work is being done. A clear understanding and detailed independent contractor agreement can help outline and clarify the working relationship, so you don’t run into problems down the line.

An independent contractor agreement should cover important terms, such as the work they are being hired to do, how they are being paid (it’s usually by invoices), and general terms like termination and confidentiality provisions. It is also beneficial to have a provision within the contract that outlines that the worker is an independent contractor, and what that means for the working relationship. There are other specific contract provisions that are important to consider for independent contractor relationships. These include terms that define who is responsible for expenses (usually the independent contractor), benefits (ie. that they don’t qualify), and the term of the agreement (indefinite agreements are more akin to an employee/employer relationship).

3. Non-Disclosure Agreement

To put it simply, a Non-Disclosure Agreement (NDA) is a confidentiality agreement. It’s a contract that is signed before any confidential information is shared, that outlines what the confidential information is, what can and can’t be shared, and how the information should be protected.

NDA's are important any time you are developing, presenting, or sharing confidential information of your business, and you want to make sure that information stays confidential. If you are going to be sending or sharing any confidential information, whether its internally (such as with your assistants, employees, etc.) or externally (through outsourcing, external contractors, or investors), a good NDA can help actually keep the information confidential. Confidential information can cover anything from client lists, to new products or content being created, to social media insights, and ROIs. The last thing you want is somebody using this information and sharing it with others. That’s where NDAs can be essential for protecting both your business as well as your clients, investors, contractors, etc.!

No matter if you’re dealing with internal or external needs of your business, there are many situations where having a NDA is beneficial. Some of these internal needs might include hiring new employees or independent contractors that are dealing with confidential business information. Another internal need of your business might include outsourcing work to help develop and grow your business. Are you are giving or receiving sensitive information for services being provided for your business, such as hiring a social media manager? They will need access to all passwords, email lists, intellectual property created and in development, etc, so you may want to have a NDA in place.

There are also many external business needs in which you might be sharing confidential information. Maybe your business is the one that provides services that require sensitive information (are your the social media manager)? Or maybe you’re discussing licensing a design or creative asset to another company? Or maybe you're presenting to potential partners or investors, or sharing business information with a prospective buyer for your business. With all of these external business needs, you will be sharing confidential information of your business, that you probably want to protect.

NDAs provide a level of trust and confidence as both sides can feel reassured than any confidential information and intellectual property shared is protected.

There are so many contracts that are important for small business owners to have and use, but these three are definite essentials if you are a creative service provider!

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