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Big contracts critical for SMBs

12/23/2011

One big contract, of the sort recently landed by San Francisco-based software company Rackwise, can put a small business on the map, wrote Dennis Askew, a contributor to the stock intelligence website Small Cap Network.

Earlier this month, Rackwise finalized a multi-year software integration and license agreement deal with Intel Corporation. According to Askew, this contract could move Rackwise from being another ho-hum tech start-up with 150 clients and a mundane if solid balance sheet into an exciting prospect for investors and potential clients.

Askew also commended Rackwise for executing a good contract; for instance, it doesn't lock the company into a too-exclusive relationship with Intel.

As Askew put it, Rackwise will still be able to "talk to others in the sandbox," and will not have to turn away potential clients, saying "we wish we could but we are locked up with Intel."

Given the critical importance of contracts and licensing agreements to small- and mid-sized companies in the tech industry and other sectors, entrepreneurs would be wise to take a page out of Rackwise's book, taking care to execute contracts shrewdly. Not all start-ups have the resources to engage outside services during contracting processes, but these companies can investigate online services providing templates for a variety of business deals, ranging from a simple IT software contract to a web hosting agreement template or computer services contract template.