By Charly Leetham

As a small business, working with Freelancers or a Virtual Team often means finding a way to contract with an online supplier, and setting up a way to ensure that you receive the contracted services. This protection potentially means setting up an escrow account, and
requesting milestone payments.

When you’re new to the world of virtual business all of these concepts can make your head spin. How do you find suppliers you can trust, and even then how do you protect yourself, your clients and be fair to your suppliers contractually and financially? The first good piece of news is that there are many fantastic resources at your disposal in the Virtual world. These resources offer contract signing, escrow and milestone payment
services and help you ensure the quality of the work you contract for is suitable (if not, the provider doesn’t get paid).

Even without an escrow service many online banking systems like PayPal offer ways of getting back funds when you’re unhappy with a supplier, or in offering refunds to clients who may have a problem with goods or services. However, you should consider having your businesses Terms of Trade created or build in the fees for these services into every quote you provide.

Generally speaking, paying in full for services upfront is not good business practice unless you know your provider very well and have come to trust their deliverables and consistency (in any situration).

Creating a Contract:
Most newcomers to business know very little about contracts. Once again the Internet can provide you with sample contracts suited to your situation with but minor revisions as can a fast trip to your local library.

Small businesses aren’t always able to afford lawyer, so a little research on your part will certainly help you. I’ve recently found an agency that will create a series of Terms of Trade and other documents that will go a long way to protect your interests, at a fraction of the cost of a lawyer. Some organisations (like EC Credit Control) will not only create your Terms Of Trade, which include the recovery of debt collection fees, they will also provide pro-forma forms for your business (quotes, invoices and the like) – for a reasonable fee. The big thing to remember is that you need to be diligent – this is your vision, your clients and your potential success or failure here.

There are some excellent resources that allow you to have contracts signed electronically by all parties and stored online.

Engaging An Online Supplier

Generally speaking, when engaging an online supplier, you should gather the following information:

– Legal Name, Address and Company Number or Social Security Number for tax reporting  purposes
– The scope of the work and all relationships
– Rate of pay (or overall agreements on how the provider gets informed of rates and assignments)
– Rights to goods / services provided (limited, proprietary, etc.)
– Duration of contract (most are at-will)
– Non-disclosure agreement
– Non-compete agreement (if applicable)

As good practice, a business person shouldn’t begin working with an online supplier until you’ve received the correct documents. Remember these are intended to protect everyone associated with your online business venture.

Charly Leetham is a Small Business Coach and Online Business Implementation Expert and I help small businesses take their business online. Charly provide services to solopreneurs and small business who wish to sell or promote their products and services online. Visit for more information.

Do you have an article about doing business online you would like to share with Women in Ecommerce™? Women in Ecommerce™ is always on the lookout for quality content for our website and blog. If you have articles about doing business online, internet marketing, SEO, SEM, social media and anything internet related, send a message to heidi (at) with “WECAI article Submission” in the subject line and either an outline of the article or the article itself for review.