What my First Consulting Gig Taught Me About Small Business Risk

Disclaimer: This post is a personal reflection on a project I worked on. It is not legal advice. I did not provide legal advice to the business described below. If you need legal advice, speak to a qualified lawyer.

A meal and a glowing review! I jumped at the chance. Yes I didn't get paid, but it was a valuable lesson for my first attempt at "going it alone".

A friend was helping out a small, consumer-facing service business. They needed someone to look through their scope of work and terms and conditions.

I'm an ex-partner who used to work on multibillion-dollar deals with complex structures. This should have been a walk in the park — or so I thought.

The job itself was relatively straightforward, but I learnt a lot during the process. I was used to "big ticket" transactions. This was the opposite: a scrappy start-up who needed someone to help them out.

What I found wasn't unusual. Documents that don't reflect reality. Risk completely out of proportion to the fee being charged. Boundaries that were never set.

This post is a case study — anonymised, no names, no industry details. But the lessons apply to almost any small service business.

The Setup

The business offered a service helping families solve a specific problem. They charged a modest fixed fee for what was typically a one-off visit.

They had two documents:

• A Scope of Work (SOW) full of lofty promises
• Terms and Conditions (T&Cs) which, to be fair, were well drafted — but not fit for purpose

The problem? The SOW read like marketing material, and the T&Cs were the document clients actually signed. That's the wrong way round.

They wanted a sanity check. I agreed to do a limited pro bono review — one pass, one round of comments — in exchange for a testimonial, a lunch and the possibility of future referrals.

What I found gave me enough material for this post.

The Scope of Work Promised the Earth

Their Scope of Work was beautifully written. It listed:

• Initial assessment
• Education and training
• Implementation
• Detailed reports
• Ongoing follow-up support

The problem? Their fee was tiny. And in practice, most clients got a single visit.

The SOW read like a guaranteed checklist. If a client ever complained that they didn't receive "ongoing follow-up support", the business would have a hard time arguing otherwise. The document said they'd provide it.

The Fix (In Principle)

Separate marketing language from contractual commitments.

• Your pitch deck and marketing material can be aspirational
• Your signed engagement must be specific: what's included, what's not and for what fee
• If your SOW lists services, make clear which are illustrative and which are actually included in the price

The rule is simple: if it's in writing and looks like a promise, an angry client will treat it as one.

The Structural Change

The original setup had clients signing the T&Cs, with the SOW floating as a separate document.

We flipped it.

The SOW became the document clients sign — specific to each customer, with a clear scope and fee. The T&Cs were attached as a schedule, incorporated by reference but not the main event.

This means:

• Each client knows exactly what they're paying for
• The business isn't accidentally bound by aspirational language
• The T&Cs do their job (limit liability, set ground rules) without pretending to define the scope

If you're a small service business, this structure is worth considering. Your signed engagement should describe the work. Your T&Cs should handle everything else and shouldn't be bespoke.

Liability Completely Out of Proportion to Fee

This business was charging a low fixed fee to work in a high-emotion, high-stakes area. If something went wrong after their visit — even if it wasn't their fault — they'd be the first call.

Their Terms and Conditions didn't cap liability at all. And buried in the small print was an indemnity clause that could have obliged them to fund a client's legal costs in a dispute.

If you're charging hundreds for a job and your contract says you could be liable for tens of thousands in legal costs, something is wrong.

The Fix (In Principle)

Make your exposure proportionate to your fee.

• Cap liability at the fees actually paid (or a sensible multiple)
• Be explicit that you provide risk reduction, not a guarantee of perfection
• Never casually give away indemnities — they can cost multiples of the original fee

Small businesses should not take on enterprise-level contractual risk for pocket-money fees simply because they copied terms from somewhere else without understanding what they were agreeing to.

The Brand and the Legal Entity Weren't Connected

The company was registered under one name. But all their marketing, website and client communications used a completely different trading name.

Nowhere in their paperwork did it say: "ABC Limited, trading as Friendly Brand".

This matters for two reasons:

1. Clients don't know who they're contracting with. If there's ever a dispute, the first question is: who's the other party? If your documents don't answer that clearly, you're already on the back foot.

2. Limited liability protection gets blurry. The whole point of a limited company is that the company — not you personally — bears the risk. If clients don't know they're dealing with a limited company, that protection is weaker than you think.

The Fix (In Principle)

State the connection clearly.

Somewhere prominent in your Terms and Conditions (and ideally your signed engagement), include a line like:

> "XYZ Limited (company number 12345678), trading as [Brand Name]"

It's not complicated. But I'm amazed how often it's missing.

The Underrated Bit: Client Responsibilities

Here's something that doesn't get enough attention.

In this business, the client's own behaviour after the visit was the biggest variable. If the client ignored the guidance, did nothing or actively undid the work, the business would still be blamed when things went wrong.

The original T&Cs had a vague "client obligations" clause. It said something like: "The client agrees to cooperate and provide accurate information."

That's not good enough.

The Fix (In Principle)

Spell out exactly what the client must do — and what happens if they don't.

• They must provide accurate, complete information before the work starts
• They must follow the guidance given
• If they ignore the guidance, they can't hold you responsible for the outcome

This isn't just about legal protection. It reframes the relationship. The client becomes a partner in the outcome, not a passive passenger who blames you when things go sideways.

The Pro Bono Boundary

This is the part that isn't about contracts. It's about professional discipline.

I agreed to help as a favour. I thought I would be providing:

• A limited high-level review
• A limited set of tracked changes
• A limited round of follow-up questions

That was it.

Predictably, the scope started to drift and lots of extra questions were asked.

I get it. They were grateful, enthusiastic and didn't realise how much time each "quick" request actually takes.

But this is where self resentment builds. You start a favour feeling generous. Three days later, you've quietly donated several hours of consulting time and you're annoyed at yourself for not stopping earlier.

What I Did

I drew the line after the third round. I told them my work was complete.

No awkwardness. No guilt. Just clarity.

The Lesson

Free work is fine if it's bounded.

If you're a lawyer, consultant or other professional, the real lesson here isn't about contracts — it's about how you handle favours and free work.

If you're helping friends or doing pro bono:

• Define the scope up front (in writing, even if informal) — this was probably my biggest mistake
• Set a clear end-point: "One round of comments, then we're done" — again, something I didn't do
• Have a simple on-ramp to paid work: "Beyond this, my usual rate applies" — likewise something I skipped

You'll both respect the arrangement more. And you'll actually want to help again next time.

What I'd Suggest to Any Small Business Owner

If you run a service business — especially one where clients pay a fixed fee and you're exposed if something goes wrong later — here's my shortlist.

If you only do three things this quarter, do these:

1. Get your SOW and T&Cs the right way round. Have clients sign a specific engagement (with scope and fee), and attach your standard T&Cs as a schedule.

2. Cap your liability. If you're charging a few hundred or a few thousand pounds for a service, make sure your contract doesn't expose you to unlimited risk.

3. Spell out what the client must do. Don't leave client responsibilities vague. Be specific about what they need to provide and what happens if they don't follow your guidance.

The full checklist

Do:

• Use a signed engagement (SOW) with a clear fee and scope for each job
• Attach your T&Cs as a schedule to that engagement
• Cap your liability to something proportionate (e.g. fees paid)
• Spell out client responsibilities — what they must do and what happens if they don't
• Link your brand to your legal entity somewhere obvious in your documents

Don't:

• Assume the T&Cs template you found online fits your actual risk
• Let your Scope of Work promise things you don't actually deliver
• Give away indemnities without understanding what they mean
• Treat every favour as unlimited

How I Can Help

If you're reading this and thinking "this sounds like my paperwork", I work with small service businesses on a fixed-fee basis to:

• Sanity check your Scope Of Work and Terms & Conditions
• Align them with what you actually do
• Reduce the obvious downside risk without turning everything into a 30-page contract

I do this kind of work all the time: short, focused reviews, practical changes, no jargon. If you want a sanity check on your documents, get in touch: contact@browngeek.net.

Final Thoughts

The interesting thing about this project wasn't the drafting. It was the reminder that good paperwork isn't about legal sophistication — it's about matching your documents to your reality.

Most small businesses don't need complex contracts. They need clear ones: clear on scope, clear on liability, clear on who's responsible for what.

And professionals — whether you're a lawyer, consultant or any kind of expert — need boundaries. Even when you're helping friends. Especially when you're helping friends.

Disclaimer: This post is a personal reflection and does not constitute legal advice. Every situation is different — if you need legal advice, speak to a qualified lawyer.

Questions? Comments? I’d like to hear if you’ve seen similar patterns in your own business. Subscribe to the blog or email me: contact@browngeek.net.