Define Your Business Terms

Define Your Business Terms

Every freelancing professional should have clearly defined business terms. You have to protect yourself and your business from unpleasant situations because any time you work with clients, there’s going to be a day where things go bad. You need to define your business terms so you can refer back to them and use them to mitigate any problems that arise.


Shelly is a very talented web professional who needed business advice regarding her pricing structure. She’s incredible at her niche and has a waiting list of people who want to work with her, but her pricing on projects is extremely unhealthy for her business health and personal goals. This is a common problem with freelancers and it’s detrimental to their business success. The good news is that it can be resolved.

I started evaluating a new project proposal that Shelly sent to a potential client, yet wasn’t accepted but still had the possibility of being closed on. The project included consulting, website design, website development, ecommerce solutions, and online marketing strategies – all for a price that should have just covered the cost of the design and development only! I knew that Shelly’s work was worth at least triple of what she was asking for and encouraged her to revise the quote with my assistance. We resent the proposal to the client at the new and substantially higher rate.


Because the terms in the original proposal stated that the quote was only good for thirty days, she had no obligation to do the work for the original quoted price. This is why it is critical to define your business terms in writing and then present them to your potential client in your invoices, your contracts, or your proposals. If Shelly had not defined those terms, and the potential client had accepted the bid, then the original price and terms would have to be honored.

You are in business to make money and a profit. You own your business and have the right to set business terms that benefit your company. You determine what it is you want to do and how you want to do it, not your client. So yes, as long as you clearly define your rules, guidelines, or expectations you can enforce them with potential or existing clients.

While it was clear the potential client was unhappy about the project rate tripling, it would have been a disaster if the original proposal had been accepted and expectations couldn’t be met. Shelly didn’t win that project but she avoided a situation that would have cost her money, time, and her reputation.


Your business model may be different from other freelancers or business owners, but as a general rule the following details at minimum, should be included in your proposals or estimates:

  • Payment terms and rates.
  • Refund or no refund policies.
  • What the deliverables are and how they will be delivered.
  • What the client can expect from you.
  • What you should expect from the client.
  • Starting date and estimated completion date. Don’t neglect setting timelines!
  • How long your estimate or quote is good for. I suggest 3o days or less.
  • Terms of Service, if applicable.

Of course there are many more business terms that you could include to protect yourself and your client. For example, I have a clause in my own proposals that states any project less than $2,000 requires full payment upfront because it’s too costly to chase down that money if a client disappears midway through a project (and it’s happened multiple times).

You must always  protect yourself and your business by defining and communicating your business terms. If you don’t, you are going to open yourself up to a lot of headaches and heartbreaks as a freelancing professional.

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