Your IT Contract Could Cost You a Big Client

When it comes to IT services, knowing the difference between small clients and big businesses is key.

The contract that worked well for smaller clients might end up being a problem when you're trying to land larger accounts.

If you don't make the right changes, you could miss out on some serious business.

The Realization

I figured this out early in my career, and it's shaped how I approach things ever since.

What worked perfectly for smaller clients can fall short when dealing with the complexities of larger organizations.

Once you start working with bigger clients, everything changes. For example:

- Legal Issues: Their legal teams will go through your contract with a fine-tooth comb, wanting specific clauses that protect their interests before they even think about signing.

- Financial Concerns: CFOs of large companies will demand clear safeguards against financial risks, making sure every possible liability is covered in your agreement.

- Compliance Needs: Compliance teams will be looking for strong security terms to ensure that their data and operations are safe and sound.

While doing great work is important, building trust through a solid contract is the first step. Unfortunately, many IT founders overlook this crucial part.

They get so excited about grabbing a high-profile client that they forget to check if their contract is set up to meet that client’s needs.

This slip-up can cause deals to fall apart at the worst times.

What Large Organizations Look For

In larger organizations, the decision-making process includes a bunch of stakeholders:

- Legal Teams: They’re there to protect the organization’s interests.

- Finance Teams: They want to make sure the financial side of things is solid.

- Stakeholders: These are the folks who need to be sure their company’s safety and reliability are guaranteed before giving the green light to any partnership.

To successfully navigate these challenges, here’s what I recommend you should do:

1. Anticipate Client Concerns: Get a handle on common worries large clients might have. This includes things like:

   - Payment Terms: Clearly lay out terms that are fair and easy to understand.

   - Liability Clauses: Define what you’re responsible for and limit potential liabilities.

   - Intellectual Property Rights: Make sure it's clear who owns what and how it can be used.

Plus, set up clear Service Level Agreements (SLAs) with measurable performance indicators - such as response times and resolution periods.

It might even be worth including credits for failing to meet those standards.

2. Know What They Want to See: Be ready to show that you take security seriously, which is a big deal for larger companies. You can do this by:

   - Conducting regular security audits.

   - Running penetration tests to spot any vulnerabilities.

   - Offering ongoing employee training to ensure everyone is following best practices.

Specify acceptance criteria for thorough testing before final acceptance of your services to make sure you're meeting their quality standards.

3. Simplify the Negotiation Process: Make it easy for potential clients to work with you.

Show that you're open to negotiating and willing to make reasonable changes to your contract.

Testing your agreements with smaller clients can help you pinpoint gaps and improve your contracts.

Do The Homework

If you skip these steps, larger clients will likely choose vendors who are better equipped to meet their needs.

Before you pitch your next big client, take a good look at your contract with these questions in mind:

- Would their legal team approve your contract without a second thought?

- Does your contract cover all the questions and concerns they might have?

- Or will they spot risks and decide to walk away?

Remember, while outstanding work can help you get your foot in the door, having the right contract is what really seals the deal and builds a lasting partnership.