Hey there, what’s going on everybody? John Doherty, Founder and CEO right here at Credo.
So today I tweeted out something where basically I said, if you are sending proposals to clients without including a statement of work or you’re not sending a statement of work before you even send them a proposal, you are not going to sign nearly as many clients.
And if you do sign clients they’re going to be clients that are paying you less than they should be paying you and the project is likely going to go sideways.
Of all the projects we’ve had come through the Credo marketplace, the projects that have gone sideways the most are the ones where there is not a clear statement of work where the client understands what they’re getting for what they’re paying for.
So deliverables, monthly catch ups or weekly catch ups, reporting, all that sort of thing.
If you do not have that in a master service agreement or a statement of work, you should not be sending proposals to clients.
That said, someone responded to my tweet, and I haven’t verified this independently but it’s something to take into account.
They said, if you have business insurance and you have sent a contract or a proposal that was signed without a clear statement of work, your businesses insurance is likely not valid.
Now, you should look at that. I’m not a lawyer but I do have business insurance.
And I’m creating this video because I think all digital marketing agencies, all agencies, even solo consultants, need business insurance.
Business insurance is not that expensive and it can save you a lot of heartache.
I got it a few years ago because I was still living in San Francisco and getting the business off the ground.
I had a client, or a prospect really, they weren’t a client yet because they weren’t paying me, who wanted to work with me. But it was a startup that had been acquired by a publicly traded company.
They required me to have $1 million of insurance. Basically, this is insurance that if I did such and such a thing that harmed their business, that I would be covered.
So I went, and I researched it and I bought it.
I personally use Hiscox, H-I-S-C-O-X.
It’s around $130 to $140 per year for up to $1 million in liability insurance, liability coverage. I heard them on podcasts. They were advertising on podcasts, which is why I knew them and I went and I bought it.
I’ve never had to use it luckily, but basically this is insurance that if something happens and someone sues my company, this is for malfeasance or whatever, malpractice, then this is insurance that we can use to cover that because I’m already paying for it.
Obviously my premiums would go up if that happened, it’s obviously never happened.
Now if you don’t have it, I would definitely recommend doing your research.
Look at Hiscox, look at some of the others. It should be somewhere in the $100, probably not more than $300 or $400 a year sort of thing for up to a $1 million in liability coverage, somewhere around there. But it’s peace of mind.
It’s good to have as a business, especially if you have a business entity. If you don’t have a business entity, get a business entity. The sole prop LLC is great, it’s pass-through income. But you should have that. You should also, it just protects you as well, it protects your personal assets, and then also having liability insurance as well.
It’s best practice when it comes to business, and then also, it’ll help you not lose clients that require it and you don’t have it.
And if you don’t have it, normally of course the client will be like, “Okay, that’s fine. Just get it. Send it to us to prove to us and we can do it.” If you already have it, as I said, which is best practice, then you can just say, “Oh yeah, here’s our liability insurance.”
They might want you to get a little bit more depending on the business, but most of them don’t require more than a really $1 million in liability coverage, liability insurance.
So I hope that’s helpful to you. If you are a digital marketing agency or digital marketing consultant, I implore you, check out business insurance and check out what you need to have in your contracts, in your statements of work, master service agreements, et cetera, to make sure that you’re in line with that as well. And if you are not sending a statement of work, of what the client can expect while working with you and for what they are paying for, you are doing it wrong. And honestly, you need to add these in, just point blank. You need to add it in because it’ll help you close more work and it’ll also cover you. And you can point back to the document.
As my business coach Chris Lema says:
“you don’t need leverage, you need data.”
You need to be able to tell them like, “Look, we said we would do X, Y and Z for this amount of money, and now you’re asking for this other thing that was not included in the master service agreement that we agreed to. We can discuss this other thing that you need but it’s going to be an add-on.”
Aka, you’re going to charge them more money. And sometimes, they’ll be like, “Okay, that’s totally fine.” Great. You’ve made more money.
Now you’re actually getting compensated for the work that you’re doing, which is how it should be.
Otherwise, they’re like, “Ah, you know what? It’s not really a need.” Great. You didn’t do work that, what they didn’t really need. They shouldn’t have asked you for it anyways, but they did.
So I hope that’s helpful for you.
And thanks for tuning in.
I’m John Doherty from Credo.
And I’m out.