In business, there's often pressure to close a deal, make a sale, or win a negotiation. When emotions run high, it may seem any concession is worth getting to a contract. But you can't always win at the bargaining table. Some deals carry unforeseen or long-term negative consequences for your business.
If a negotiation has been tense or difficult, it's understandable to want to run for the finish line. Instead, take a moment, and consider your reasons to let the deal go and find better alternatives.
Ask yourself multiple questions before making a deal with a supplier or business partner.
Is the person you're negotiating with able to meet your needs and make necessary concessions, or are the people in the company with authority unavailable to you?
Are their requirements for you unrealistic or unreasonable?
Are they offering far less than your company or services are worth?
Do they lack interest or resources?
Do you have to change your service or product to meet their needs in a way that's too expensive overall?
Might the deal have a negative impact on your company's reputation, employee retention or profits?
Remember that not closing a deal isn't inherently a failure. In the early years of Netflix, Jeff Bezos offered to buy the fledgling company. Amazon wanted to get into video streaming and was offering far more than Netflix was worth at the time. Reed Hastings and Marc Randolph, Netflix's founders, chose not to take the deal. They felt they had a strong base from which to build their company, and Netflix is now a billion-dollar enterprise, worth over 14,000 times what Amazon offered for it in 1998.
One of the most frustrating circumstances is when there's no particular reason for a deal not to work. You want to work with your counterparty, and they want to work with you, but the deal simply isn't materializing. This isn't necessarily a failure either. Sometimes your intuition is better than your conscious mind at identifying potential problems. Perhaps the timing of the deal isn't right, or maybe you and your counterparty simply don't fit together.
Focus on Contracts
While writing a potential contract, pay attention to how you feel about the overall deal. Consider the contract’s presentation carefully. A shoddy-looking document can create false uneasiness about the deal, and taking the extra time to format each provision helps you think more deeply about the agreement. Use a PDF file merger to see what it looks like as a finished product. If you or your counterparty are still feeling uneasy about the agreement, it may be time to walk away.
Look to the Next Deal
Securing a bad deal can be expensive and damaging to a company's reputation. Know your value, pay attention to evidence that a company is offering you insufficient terms, and listen to your gut when drafting and signing a contract. When a deal isn't shaping up in a way that benefits you and your business, it's time to pursue other negotiations in search of a true win.
When looking for future deals, it helps to form a strong network of other business leaders in your area. Join your local chamber of commerce to begin making contacts today.