This is the second in an ongoing series covering the value legal agreements bring to your business beyond the surface. From boosting your bottom line and expanding your business to hiring the most talented team and improving every relationship, you enter into; this series offers a comprehensive look at how effective legal agreements can enhance just about every aspect of your operation.
When it comes to onboarding a new team member, whether an employee or an independent contractor, it’s fairly common to have the relationship not turn out quite the way you had hoped it would. This occurs because the individual either doesn’t provide the services you thought they would, or they fail to live up to your expectations in some other way.
One Common Cause is A Failure of Process
The cost of team turnover can be among the biggest expenses for your business, not just financially, but in terms of time and energy, too. In many cases, changing your agreement process can ensure you hire the right people who will be with you for a long time and grow alongside your business.
Most small business owners have a standard employment agreement signed by all team members or no agreement at all. In either case, you are setting yourself up for the loss.
Every person you hire—contractors and employees— should sign an agreement. Doing so will save you from big losses down the road.
Your agreement should specify your expectations for the relationship, establish metrics for success, and include time frames for objectives to be achieved. When you share these expectations, you are setting the new hire up to succeed from the start. And you are giving them an opportunity to clarify whether the expectations are clear and can be met.
Rather than using a generic online agreement, you should work with a business lawyer like us, who can create agreements that are specific to your business. Then, you should have a solid agreement template all ready to go whenever you onboard someone new.
To get the most out of your relationship with legal agreements, you must first understand the boilerplate terms and basic facts about legal agreements and how they can affect your business.
Clarifying Your Expectations Is Essential To A Healthy Business Relationship.
Experienced employment or business lawyer can customize your agreements to make them cater to your needs, style, and way of doing business. Having customizable agreements helps you make better hires because it forces you to think through your expectations for the relationship ahead of time.
The more important the hire is, the more time you should take to negotiate the terms of the relationship. You can provide the template or base agreement and then give the new hire time to review it and ask questions.
Every Long Term Business Relationship Will Have Its Challenging Moments.
For example, if you are bringing on a business partner or high-level team member, I can promise you this: There will be times when you do NOT want to be in business with that person. I can’t tell you exactly what will happen or when, but inevitably something will come up.
And if you don’t have a sound agreement that provides you with a reason to not just run away, you might do just that. But running away is not good for you or your business. You must deal with change and conflict in a clear and healthy way.
It’s vital to create agreements when you love each other and have high hopes for the relationship. You can tailor the agreements to address future outcomes that may be off the charts bad or even just less than ideal, and that’s what’s going to keep you invested in the relationship when it reaches the breaking point. Conversely, there may be times when the right call is to run, and a good agreement can provide you with a way out.
Here’s The Key To Getting A Good Agreement: It’s First About The Process, Not The Paper. Use Your Lawyer Early So That You Don’t Need Them When It’s Too Late.
As your Family Business Lawyer™, I have been creating comprehensive employment agreements and partnership agreements for small businesses like yours for more than 25 years. So if you need help with a new business relationship, please contact me now.
This article is a service of Greg Gordillo, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Schedule your LIFT Session today!