3 Steps to Your Contract Renewal

Few contracts include an auto-renewal clause that allows the contract duration to be extended continuously until it is terminated by either party.

Most contracts will require some action to either renew based on existing terms or re-negotiate new terms. Sometimes the renewal does not come so easy. Here are 3 ways to 'help' your contract renewal along:

1. START EARLY

If you take only 1 thing from this epistle, it is to start early! Do not wait till the contract is almost expired. Renewals and extensions tend to be very lengthy processes so you would be doing your business a big favour to start discussing early enough. It also gives you adequate time to prepare in situations where you will have to go through a competitive tender for renewal of the contract (topic for another day!). 3 - 6 months before contract expiration is ideal.

2. INITIATE DISCUSSIONS

Discussions allow you get a sense of the clients plans. Include contract expiration/renewal as an agenda item in periodic performance review meetings. Then prepare extensively... you are not only interested in the duration, you also want to discuss refining the contract and adjusting outdated terms to reflect existing practices.

3. FORMALIZE: Now find out who your contract holder is (may be different from your day-to-day contact) and write a formal letter to confirm your interest in continuing the service with improved procedures/activities as agreed. A formal letter 'encourages' the client to take action quicker and set the renewal processes in play.

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