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50+ Sample Retainer Agreements
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Retainer Agreement: What Is It?
A retainer agreement is commonly associated with a work-for-hire agreement, may it be part-time or full-time. This legal agreement allows customers to pay early for professional services that will be specified afterward. Thus, clients retain the ongoing services from a business while the business receives stable payment. And that is where a retainer fee is at play since agencies can still serve their customers after a long time if they require services.
It was reported that around 56.7 million people in the US were part of freelance work.
Also, Forecast reported that the four major benefits of a retainer agreement are: (1) to observe consistent income, (2) to lessen time selling services, (3) to predict cash flow, and (4) to strengthen relationships between clients and businesses.
Why Is a Retainer Agreement Essential?
A retainer agreement grants businesses stable income while clients receive loyalty from these agencies with a continuing working relationship. For example, Forbes reported that 56.7 million people in the US joined freelance work. But the question is, did every freelancer get a stable amount of pay? Thus, it is better for businesses to promise their clients that services are available for them anytime in the future if needed. That is if customers paid ahead in a recurring payment per month. And this agreement plays well when businesses and clients handle long-term projects.
Also, retainer agreements apply to all sorts of professional services may you be a consultant, photographer, real estate agent, video production specialist, and so much more. So upon offering services on retainers, you can sell your work for future purposes to customers at a fixed cost. And the best part is that a binding agreement or contract is prepared to legalize the promise rather than just a verbal agreement.
The Anatomy of a Retainer Agreement
Before you head to drafting the retainer agreement, it is important to start recognizing the basic parts of such an agreement first. And each element is what makes up a complete retainer agreement. Without further ado, ensure that you add these parts of your retainer agreement:
How to Make a Retainer Agreement
Now that you are properly introduced to a retainer agreement’s definition, importance, and basic elements, apply your knowledge further by learning how to create the retainer agreement itself. You can even craft one shortly by using any of the sample retainer agreements above. Each template is ready to edit, download, and print. And to perfect the results, don’t forget to apply these steps:
Step 1: Identify Your Purpose and Intentions
What is your purpose behind needing a retainer agreement in the first place? Whether you are a recruitment manager, accounting specialist, photographer, or just a regular freelance employee wanting to build a steady income, your intentions matter first. That is because you will align your purpose and intentions upon making the retainer agreement afterward. Otherwise, it would be pointless to make an agreement that won’t meet your purpose and objectives.
Step 2: Get to Know Clients
Remember that clients will be the ones who get to pay you upfront or in a monthly plan while you get ready to serve them for the future. But, don’t be greedy too. The key is to get to know your clients from what they want to accomplish and what plans they have ahead with your help. That way, you can identify strategies on how to win them over that they would want to depend on your work continuously. And that part is where you open up about your plans for a retainer.
Step 3: Mention What You Can Provide
If customers should pay you consistently, then why should they? State what you can offer for them and write it down in the agreement document. These services must be relevant or helpful for clients that they would trust you continuously. And from every responsibility, service, or thing you could offer, enumerate them in your agreement. Thus, clients will expect those to be given when they finally sign the agreement.
Step 4: Complete the Anatomy of a Retainer Agreement
As you start filling the details into your retainer agreement, be sure you have added the significant parts. And those are what you already learned from the anatomy of a retainer agreement earlier. So down from the statement of authority down to termination, add them one by one. The key is to input the correct details and be direct to the point. Also, find a way for the agreement in being easily understood by each party. You can be creative but professional in dividing the elements of the agreement into sections.
Step 5: Value Your Clients and Let Them Know Your Value
Always remember that retainer agreements are about building relationships. Don’t simply think of the profits because even clients would see right through you if you are only after their money. Instead, value your clients wholeheartedly by ensuring their needs will be satisfied and that you can provide them the best services as much as possible. That way, you will also be able to show them your value. So how much is your worth? Prove it to them by writing carefully in the agreement.
What is a retainer fee?
A retainer fee refers to the advanced payment amount to be paid by a client to ensure that a business provides services for future purposes. It basically acts as an agency’s contingency fee to be consistently paid. Nonetheless, clients could pay it in full or through monthly payments, depending on the agreement between parties.
What are some challenges in a retainer agreement?
A retainer agreement can be challenging, especially for clients who will pay continuously. Not every person is up for continuous fees anyway. And that explains why some companies doubt asking customers for a monthly payment plan. However, businesses can win customers by reminding them of how valuable they are and how they benefit from the ongoing services for the future. Hence, retainer agreements should be a win-win situation where not only agencies benefit from the arrangement but most particularly the clients.
What are the common benefits of a retainer agreement?
It has been reported that retainer agreements have four main benefits. And they consist of providing steady income, lessening time in selling services, predicting cash flow, and strengthening the bond between customers and businesses.
The next time you want financial security for your professional service business, incorporate a retainer agreement into the picture. Indeed, earning profits and revenues feels good. But lack of steady income won’t mean your earnings will last long. Instead, protect your business by monitoring cash flow, befriending clients, observing continuous pay. And you can do that by constructing the said agreement using sample retainer agreements. Create one now!