Running a business is not as easy as it appears, it’s actually a herculean task being
responsible for the day to day decisions which influence the chances of a growing business.
Opportunities and deals come through the door day in day out and you need to decide
which is in the best interest for your business and to try as much as possible to avoid a
deal that will later turn sour.
A successful entrepreneur must be a very good negotiator. You must have the innate or
acquired ability to carefully assess an opportunity and conclude on terms that are
favourable to your business. Not all deals that look good on the surface should be pursued
or taken. One must be almost clinical in the process of business decision making. It’s a
popular belief that entrepreneurs are risk takers, but successful business people do not
take blind but calculated risks.
Here are seven (7) things to consider before committing to a business deal.
- NEVER BE IN A HURRY
A lot of times an entrepreneur comes across a deal that looks too great to waste
any time on. You feel pressured to take that deal before it passes you by. Because
of this seeming pressure, you are most likely not to do a proper assessment of that
deal and thereby make an uninformed decision that can become a curve ball hitting
you right in the face. For every opportunity that comes, take sufficient time to do
your proper due diligence and make sure you have enough information to make a
decision on whether the deal is indeed beneficial and should be pursued. - IF IT LOOKS TOO GOOD TO BE TRUE, TAKE A LOOK AT IT AGAIN
As a follow up to 1 above, I’m sure you’ve heard the popular saying that goes “if it
looks too good to be true, it just might be”. But this is a dangerous general
assumption. Give things the benefit of a doubt. If it looks like a heaven sent
perfect deal, sit back, exhale and take a look at it again. Eliminate the initial feeling
of excitement and look at it from an unbiased lens, you’re sure to see some hidden
things you didn’t see before. If you can’t stop yourself from bouncing on the couch
on the deal, get someone else you can trust to take a clear look at it DO PROPER BACKGROUND CHECKS
You also need to conduct proper due diligence to make sure what you’re about to
venture into is a valid transaction. You might have very high moral and business
standards but do not to any extent expect that everyone else has the same standards. Be objective in your assessment of the motives of those you are dealing
with. Confirm the authority/right of the other party to enter into that transaction.
If an item is being transferred, does he/she have sufficient title or right to
transfer property in that item? Does the subject matter of the proposed
transaction even exist? Is it in the possession of the other party? Is the actual
item/service the same as described? etc.- RECEIPT UPON PAYMENT
For every payment made, make sure to obtain a receipt of same from the other
party. In the same vein, if you are receiving any payment, be sure to issue a receipt.
This receipt must clearly state the amount paid, date of payment, method of
payment and details of what the payment was made for. - INSIST ON PROPER DOCUMENTATION
Further to the last point, documentation of every key aspect of your dealings must
be properly documented. This goes beyond formal contracts only. Every
correspondence and negotiation should be backed up with written records, kept
secure for such a time that you will need to resort to it. Humans tend to forget
their statements; a written record is a great memory refresher. - DO NOT SHOW ANY SIGN OF DESPERATION
This is a key rule in the art of negotiation. When you give the impression that you
are not desperate about a particular deal and that you have other options, you
automatically increase your bargaining power in that situation. When you show
desperation, you open yourself to the possibility of being exploited. - GET EXPERT LEGAL ADVICE
Having sound legal advice to guide you in the process of making your business
decisions is very essential. Experienced business lawyers have negotiated and
resolved crisis from numerous business transactions and they know exactly what to
look out for in a good deal. Once you get a good business lawyer, please don’t stop
there; actually really hear them out and engage them before making a business
decision. As entrepreneurs, we tend to be a bit restless, but trust me good legal
advice will save you a whole lot of headache.
At Creed and Stones LP, our team of experienced business lawyers is available to help you make only the best business decisions. Click here and let’s help you grow your business.