Don’t Let Inflation Strangle Your Service Business

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service business contract and inflation

When you’re a professional services provider (e.g., copywriter, software developer, website designer, business consultant, etc.), you’ve got a few options for dealing with inflation.

First, you can ignore it exists…which means that every $1,000 you earn may have the same buying power as $850 or less did a year ago. Even if your gross revenues remain the same during a recession, you’ll be struggling because the dollar just isn’t worth as much.

Or you can guesstimate how inflation is going to eat away at your business and quote your services based on the rough estimate and hope at you’re right. Of course, you’ve got to weigh the risk of losing business by overestimating future inflationary costs versus winning new business that becomes unprofitable because your estimate was too low.

In the alternative, you could tie the prices of your services to some inflationary indicator, such as the Consumer Price Index (CPI), and provide for your pricing to change based on this indicator…either by a calculation or through pricing renegotiation at the time a trigger point is hit (e.g., 20% annual inflation calculated over the past 12 months).

You could even include contract provisions that let you walk away if inflation turns a profitable contract into a money-loser because of inflation.

No matter what you decide, it’s important to get it in writing signed by the parties (e.g., a professional services contract).

If you need help with a new services agreement or revising an existing one, it’s probably time to schedule a phone consultation with Business Lawyer Mike Young.

How To Avoid One Of The Biggest Consulting Agreement Mistakes

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consulting agreement mistakesWhen putting together a consulting agreement for your services, it’s common to focus on scope of work, milestones, payments, and other important issues that are essential to having a good working relationship with your client.

Intellectual Property

However, consultants frequently forget to address intellectual property (IP) ownership. And this can be a disaster.

Here’s why…

Most clients will assume that because they pay for your services, they own any intellectual property created by you when performing your services.

On the other hand, as part of systemizing your business, you’ll want to retain ownership of essential intellectual property so that you can recycle it on projects for other clients. After all, it’s inefficient to reinvent the wheel every time you consult for a new client.

So, what’s the solution?

The answer to that question depends upon a few factors.

Essential IP

If the intellectual property is vital to you providing services to other clients, then you’ll want to retain ownership of it and grant a limited license to the client to use it. The scope of that license will depend upon what you’re comfortable with. For example, will the license be transferable if the client’s business is acquired by a third party?

Non-Essential IP

What if the IP isn’t essential to you rendering services to other clients but you want to keep it anyway because it makes your work easier? You can insist upon ownership or craft a consulting agreement that transfers ownership to the client but also grants you a broad license to use the intellectual property in the future.

Now if you’re going to relinquish ownership of important IP, it’s common to charge a premium to the client for that. For example, it’s not unusual to charge 3x what a license would cost the client instead of ownership.

Hybrid Option

Of course, in a few cases, it makes sense for each party to own some of the intellectual property created as part of the consulting while licensing rights to each other.

Help Preparing a Consulting Agreement

An experienced business contracts lawyer can craft a consulting agreement template that’s right for you to use with your clients, including options for ownership and licensing intellectual property. If you need help with a consulting agreement, it’s probably time to set up a phone consultation with Business Attorney Mike Young.

Does Your Consulting Agreement Fully Protect You?

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consulting contract for business consultants

When you’re advising business clients, are you fully protected by a professional written consulting agreement?

Because many consultants live dangerously by cutting corners.

And they risk not getting paid or even being sued by clients because their consulting contracts are defective.

Unfortunately, it’s common for a new consultant to “borrow” someone else’s agreement found online…or try to patch something together from multiple business contracts.

What’s “borrowed” is frequently copyright infringement. Not a good way to start off any legitimate venture.

And the contract’s language probably doesn’t fit the consultant’s particular needs.

Even worse, some of the provisions are written to favor the other side.

If you’re using a contract that wasn’t prepared specifically to protect your consulting business, it’s time to get one that meets your needs.

Of course, some consultants simply work off of acceptance of a written quote…a simple document that doesn’t address many essential issues.

And a simple quote may work…until it doesn’t, i.e. a problem comes up during consulting but the quote doesn’t address how things will be handled.

Now the easiest way to prevent problems with a client is at the beginning of the relationship by establishing the rights and responsibilities of each party in a binding written contract that’s signed.

So if (when) things go bad with a particularl consulting gig, you’ve already agreed on how to sort things out.

If you need a consulting agreement revised or a a new professional consulting contract prepared, it’s time to schedule a phone consultation with Business Lawyer Mike Young to discuss your needs.

How To License Your Business System For Profit

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business system licensing agreement

Whether you’re solely online, offline, or a combination of the two, if you’ve developed a profitable business system, it may make sense to license it to others to create extra streams of income.

It’s easiest to do with a business that’s primarily offline in the “real” world. Because entrepreneurs in other geographic locations that don’t compete with you would be interested in learning how to replicate your success in their hometowns.

However, you can also license proven e-commerce business systems to others, even though the Web is global, without creating direct competitors.

For example, your venture may focus on English-speaking customers. If so, there’s opportunity to license your system to entrepreneurs targeting those who primarily speak Mandarin Chinese, Hindi, Spanish, etc. Yes, there will be some overlap with multilingual customers but chances are it won’t outweigh the upside potential of licensing your system.

Of course, it’s important to distinguish licensing a business system from franchising. Because franchising laws and regulations are onerous and often expensive to comply with.

And you don’t want to get categorized as someone selling business opportunities, particularly to newbies, unemployed, the elderly, and other demographics that consumer protection laws are designed to protect from being preyed upon.

If you’d like Business & Technology Lawyer Mike Young’s help in preparing a business system licensing agreement that’s right for your venture, the first step is to set up a phone consultation with him.

How To License Your Digital Info Products For Extra Income

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info product licensingIf you have an ebook, online course, or other information product to sell, it’s often more profitable to license the products for resale than it is to have an affiliate product where you pay others a commission on each sale made via their affiliate links.

What Is An Info Product License?

To be clear, a license is granting someone permission to do something.

The question you must ask yourself is…

“What type of permissions do I want to give the wholesaler who buys a license to resell my info product?”

The simplest would be a resale license with no extra rights.

Resale License Options

Of course, the price of your license can increase with the more rights you give.

For example, you may grant “master resale rights.” This typically would allow your wholesale licensee to both sell your info product to retail customers as end users but also to sell resale rights to new resellers.

Another option to consider is “private label” a.k.a. “white label” rights. In most instances, this would permit your licensee to retitle/rebrand your product (and even put a new author on it) before selling to others.

And these rights can be combined. For example, you could charge a higher price for someone who wanted to buy private label master resale rights.

Of course, one of the down sides to selling more rights is that you lose control of the product being sold by these licensees, particularly when a master resale licensee is selling resale licenses to others, who in turn sell the product to end users.

Pricing Your Info Product Licenses

Regardless of which permissions you decide to want to sell, you also need to consider pricing and how it’s structured so that you can get paid what you’re owed under each licensing deal.

How To Get Licensing Help

An experienced online business lawyer can help walk you through the options and set up a plan for generating extra income by resale licensing your info products. If you want help from Internet Business Lawyer Mike Young with your information product licensing, whether it’s resale or end user license agreements (EULAs), the first step is to set up a phone consultation with him.