In this time of tight wallets and cost-consciousness, the last thing you want is for a project to go over-budget.  Yet, entrepreneurs risk this all the time by not having a clear written agreement with their vendors.  Contracts aren’t just a way to siphon hard-earned cash out of your pocket and put it into your attorney’s.  No! They’re a vital communications tool that puts you and your vendor, literally, “on the same page.”

I ran into repeated problems when trying to get my original website up and running (have you ever heard of a website being done on time and under budget?).  First, the company that I hired closed its doors. Then, the designer who took over the project fed me one excuse after another for non-completion (including—can you believe it?—the dog got sick).  One year later, the site was useless. Search engines couldn’t read its programming language; the shopping cart and ezine signup were totally “user un-friendly”.  So I scrapped the site and started all over again, pretty much from scratch.  Ouch! went the strings of my purse.

Here’s what I learned from that situation:

1.  Have a written budget.

Because I had written contracts both times, I knew what it would cost me.  But I heard of a hair salon owner in Texas who got slapped with a $20,000 bill for her website – and for what? All she wanted was a brochure-type site with a modest shopping cart feature.  How did that happen?  She got dragged into meeting after meeting with the designer, all of which showed up on the bill. The result: A whopper (of a bill), with a cheesy site, to boot. Know your budget and stick to it!!

2. Know what you want.

What do you really want the vendor to do for you?  If it’s a website, do you need to get noticed? Capture visitors? Create a community?  And what do you really need now?  Give careful thought to the essentials versus the sexy extras (which can wait until your budget is more robust).

3. Ride herd on time frames.

With my original site, I fell down on the job here.  I had smartly negotiated the legal terms, but didn’t focus as carefully on the business terms. I should have (and did, the second time around) negotiated deadlines at various stages. If the designer failed to meet them (through no fault of mine), I could cancel the contract, or give the designer a modest time to shape up. An easy exit from a lousy situation can save you thousands of dollars!

4. Always have a “Plan B”.

When you have a contract with a corporate vendor, it’s hard to tell just how many people sit behind the “veil.”  What happens if the person performing the work gets sick?  Or get swamped with other projects?  What will the vendor do to get back on track? For that matter, what will you do if they don’t?  What’s your contingency plan?

5. Good enough is good enough.

The surest path to a leaky wallet is to demand absolute perfection.  Yes, you want the project (say, website), done competently, creatively, timely, and according to plan. But if you hold to the mythic ideal of the “perfect result,” you’ll find yourself spending vast amounts of needless time, money, and energy on tweaking something that really is “good enough.”  Like buying a $500 bottle of wine when you have a $50 palate: will you really appreciate the subtle differences between the two?  Is now really the time for that extra expense?  As the author John Updike wrote, “Perfectionism is the enemy of creation.”  Hanging on to achieving the perfect result can prevent you from moving forward with more important and productive areas of your business.