Subtitle: 
Make sure you get what you pay for when you hire a consultant for your small business

Many small businesses use consultants or advisors, especially during start-up activities. Sometimes, entrepreneurs and consultants don't work well together and neither gets what she wants. When hiring a consultant, it is important to have a meaningful consulting agreement to set out the expectations between the small business and the consultant.

Important Tip The description of services should be clear enough so that someone independent can tell if the service was actually accomplished in a satisfactory manner or not. Often, it is good to include a detailed project plan with dates and descriptions as an exhibit to the consulting agreement.

The most important parts of a consulting agreement are the following:

Parties. When a small business is relying upon the services of a specific individual for consulting services, have that individual sign the agreement rather than the consultant's company.

Description of Services. Describe in as much detail as possible the services to be included — be specific about the actual deliverables from the consultant — for example, reports, actions, plans, etc.

Payments. Be clear about the timing and amounts of payments, and what actions need to be accomplished before payments are made.

Expense reimbursement. Clarify who is responsible for the expenses of the consultant.

Time Commitment. What type of time commitment are both parties expecting? This is often a good way to clear up differences between the small business and the consultant in advance.

The Status of the Consultant. In most cases, the small business will want the consultant to be treated as an independent contractor rather than an employee to avoid employment taxes and benefit payments and to reduce liability. The consulting agreement should state this clearly. If the consultant will be an independent contractor, it is also important that he is able to do his work independently.

Dispute resolution. In many cases, the relationship does not work as either party intended. We recommend having an easy dispute resolution provision included in consulting agreements so that disputes can be cleared up without excessive time or costs.

Additional Information
Important Tip: 
The description of services should be clear enough so that someone independent can tell if the service was actually accomplished in a satisfactory manner or not. Often, it is good to include a detailed project plan with dates and descriptions as an exhibit to the consulting agreement.
Marketing copy: 
Consulting Agreements