Winning the deal feels like the finish line. For your margin, it is the starting line. The difference between a contract that funds your growth and one that quietly drains it is usually decided in a handful of clauses that most small businesses skim on signing day, because the celebration has already started and the buyer's paper looks standard. Here are the five we see cost SMEs the most, and what to look for in each.
1. Payment terms and the cash flow tax
Sixty-day payment terms on a contract where you carry staff and supplier costs monthly is not a detail. It is an interest-free loan from you to a larger organisation, funded by your overdraft. Model the working capital the term actually demands across the life of the contract. If the number frightens you, negotiate: staged invoicing, payment on milestones, or a shorter term for the first six months while trust builds. Buyers expect the conversation more often than sellers dare to start it.
2. Service credits that assume perfection
Service credit regimes are legitimate. The trap is the calibration: credits that trigger on minor misses, stack without caps, or are measured by definitions the buyer controls. Before signing, run last year's real performance data through the proposed regime and see what it would have cost you. If the answer is uncomfortable on your normal performance, the clause is not an incentive. It is a discount you have not priced.
3. Unlimited liability, or caps that do not cap
An uncapped indemnity on an SME balance sheet is an existential term, and it hides in friendly language. Check the cap number, then check what sits outside the cap, because carve-outs are where the real exposure lives. Then check whether your insurance actually responds to what you have accepted. This is one of the places where an hour of a solicitor's time is the best money the deal will ever spend.
4. Termination for convenience, one-way
If the buyer can exit on thirty days' notice but you are locked in for the term, every investment you make in the contract, from hires to equipment, is at risk on someone else's whim. Push for symmetry, for a minimum committed period that covers your mobilisation costs, or for an exit payment that does. The clause reads as boilerplate. Its consequences are anything but.
5. Scope language that never closes
Phrases like 'and any associated services' or 'as reasonably required' are unpriced promises. Every hour delivered under vague scope is margin leaving quietly, and because it leaves an hour at a time, nobody holds a meeting about it. Tie scope to a defined schedule, and tie anything beyond it to a change process with pricing attached. The best time to define the boundary is before the relationship depends on not discussing it.
Nobody loses money on signing day. They lose it slowly, on the terms they accepted that day.
The habit that protects you
None of this requires cynicism about buyers. It requires a standing discipline: before any significant signature, a structured pass over what you are actually committing to, what the realistic downside costs, and which clauses justify professional advice. That is exactly what the Sign or Renegotiate module in our Deal Desk platform produces, as a clear written verdict. Software or not, do the pass. Won deals should fund your business, not feed on it.