The other day I was going through our nighttime routine with my daughter. As usual, she was using every stalling technique she could find in her box of magic tricks – “I want a drink of water”…”I left something really important downstairs”…”Can you read me one more story?” I tried to redirect her by talking about some of the fun things we have planned over the next few weeks and explained that if she goes to sleep right now, then the time goes by much faster. One phrase describes my well-intentioned attempt – “Epic Fail.” My daughter started jumping up and down and screaming in excitement about her friend’s upcoming birthday party that I mentioned. Just like that, her energy burst had her all but ready for bed.
I think this incident was a great tale of “unintended consequences.” I thought that bringing up the fun events and explaining that sleep would make them happen faster (or at least appear that way) would encourage my daughter to go right to sleep, but really my efforts only discouraged sleep. I walked right into the trap.
Unfortunately, we do not experience unintended consequences in parenthood alone. We often see them in business as well, only they tend to hit us in our wallets instead of delaying our coveted evening adult time by another fifteen minutes. While some unintended consequences cannot be avoided, others can easily be prevented by implementing certain business practices.
If you have been following my work, it should come as no surprise that I tend to favor a certain entity type for photography businesses – the Limited Liability Company. Forming a LLC requires a little more effort on the front end, but it allows you to eliminate risk and personal exposure. A critical step towards avoiding those unintended consequences I mentioned. However, there is more that goes into it than formal structure. Effective contracting practices is another area that can prevent the preventable.
How you sign your business contracts is extremely important because you need to show your clients and the world that your personal life and business operations are entirely separate things. Regardless of who you are photographing – a new client you acquired through a cold call, a repeat client, or your best friend – you will need to sign a contract in the official capacity you hold in your business, such as President or Manager.
How do you do this and what does it look like?
First, you always want to make sure that you are using the formal legal name you have registered or formalized in your state through your articles or certificate of organization. For example, if you registered your company as “Ultimate Photography, LLC” with your state, then where you define your business as a party to the contract it should say “Ultimate Photography, LLC”.
Second, you should never deviate from the name, even in seemingly minor ways. In the example above, using “Ultimate Photography Company” instead of “Ultimate Photography, LLC” may create enough ambiguity to open you up to personal liability. One way to avoid deviating from the formal name is to create a template contract that has your company name pre-set.
Of course, there is an exception to this. Isn’t there always an exception in matters of the law! If you create a formal “Doing Business As” or “DBA” with your state, such as “Ultimate Photography, LLC dba Ultimate Photography,” then you can use “Ultimate Photography” without the same risk.
Finally, you need to make sure that there is a signature block at the conclusion of your contract. The signature block should list your entity’s legal name above the signature line. You sign your own name on the signature line, but must include your business title with that signature. You can do that in a couple of ways, such as listing your title immediately after your signature:
Ultimate Photography, LLC
Ima Photographer, President
Or by using a full signature block:
Ultimate Photography, LLC
Name of Signer: Ima Photographer
Title of Signer: President
Date: October 1, 2016
Either option shows that you are signing your name in your official capacity for the business.
Should you ever deviate from a formal process?
You may often provide photography services for good friends and family. Having formal contract processes feels a bit impersonal and unnecessary in these situations, but lawsuits happen even among family and friends.
I also recommend that you have all clients sign a new contract for each transaction, even repeat customers. Just because you have history with a client does not mean that future sessions won’t hit speedbumps.
All in all, I believe you should never make exceptions to signing a contract using your formal business name. Even though it may feel impersonal and unnecessary to you, your clients probably don’t see anything unusual about it. This is, after all, business and almost every time money passes from hand to hand these days a contract is involved.
In the end, running a successful business is not always easy and it requires you to have a good balance of personal touch and necessary formality. This does not mean that you cannot treat your clients as more than clients, it means that you should not allow your personal relationships to cause you to avoid necessary business practices. Do what you love, let your passion shine through, and protect your hard work.