The Negotiation Gap
Most agency founders are good at winning work. They are less skilled at structuring the commercial terms. The result: they win clients at prices and terms that erode margin over time.
The 5 Structural Mistakes
1. Pricing Without Scope Boundaries. A retainer fee without clearly defined scope boundaries is an invitation for scope creep.
2. Payment Terms That Favour the Client. Net-60 or Net-90 payment terms mean you are financing the client's operations.
3. No Retention or Renewal Mechanism. Contracts that auto-renew without a price escalation mechanism lose value every year.
4. Accepting Risk Transfer. Indemnification clauses, liability caps, or performance guarantees that transfer financial risk from the client to you have real financial value.
5. No Exit Clause. What happens when the engagement ends? If there is no transition fee, the client can walk away with all the value you have created.
The Fix
Before signing any new client agreement, review it against these five risk areas. If any area is unaddressed, negotiate it.
*Satyabrata Das provides CFO intelligence with commercial edge to agencies and consultancies. Book a free discovery call →*