Small Business Contract Series — What to include in an SLA

What should a small business include in a service level agreement (SLA)?

This is the fourth article in our series exploring small business contracts. Today, we’re focusing on the contract that protects your confidential information: the non-disclosure agreement. 

Note: this is not legal advice

From IT service providers to telecommunications companies, a wide range of businesses would be familiar with this little acronym: SLA. Standing for service level agreement, and sometimes simply called a service agreement, this type of contract forms an important part of the relationship between a customer and service provider. 

In a tech company, for example, an SLA could spell out the extent to which they guarantee uptime or data security, how quickly the team can respond if something goes wrong, or how many helpdesk calls the customer can make per week. In a telco, an SLA could provide details about minimum acceptable speeds or uptime for internet, phone and other services.

Essentially, it outlines the specific level of service that you, as the service provider, guarantees to deliver — and what would happen if you fall short. 

Why did SLAs come about?

To avoid classic ‘he said, she said’ arguments, essentially. An SLA is like a detailed, formalised promise that sets clear expectations for both parties so that everyone knows exactly who’s doing what. They sound stuffy, but they are actually a great way to foster trusted relationships with your customers.

Businesses often use SLAs to monitor and improve performance, too. For example, if you’re consistently underperforming against a key metric in customer SLAs, then you know you need to invest more time or resources in that particular area of your business. And, given that the SLA no doubt spells out penalties that you have to pay to the customer if you do fall short, then you’ve got more incentive to act.

What's included in the contract?

SLAs are inherently flexible. They have to be, as they spell out specific details of your unique service. You can use the list below as a guide when writing your first SLA, but we strongly recommend that you consult with your lawyer before sending it out into the world. They can help you make sure the contract is clear, enforceable and fair for both parties. 

With the above in mind, here’s what a typical SLA could include: 

• Service description. A clear definition of the service being provided, its intended use, and any limitations.

• Service standards. Clear and measurable metrics for performance-related aspects of the service, like uptime, response times or error rates.

• Service levels. This is where you’d spell out acceptable and unacceptable performance levels for each metric.

• Reporting and monitoring. How your performance will be tracked and reported to the customer.

• Compensation. Sometimes called service credits, this outlines potential compensation (like discounts or free service) if service levels are not met.

• Escalation procedures. How issues will be reported and addressed if problems arise.

• Term and termination. The duration of the agreement and conditions for termination.

Once you’ve written your contract and had it checked over by a lawyer, then it’s ready to send. There may be some to-and-fro involved as you negotiate service levels with your customer, but once you’re all on the same page then it’s as simple as capturing signatures to make the SLA legally binding. And the easiest, most secure way to get these signatures is with Docusign eSignature — which also delivers a great user experience for your customers, too.

We hope this quick explainer on SLAs has been helpful. To find out more about setting up contracts like these using Docusign, get in touch today.