Negotiating Business Deals by Carol McGowan

HAVE YOU EVER HAD TO SET UP AND NEGOTIATE A BUSINESS DEAL? WHEN YOU SET OUT ON THIS ACTIVITY DID YOU HAVE A CLEAR IDEA OF WHAT YOU NEEDED TO DO? THIS ARTICLE WILL PROVIDE SOME HELPFUL TIPS AND HINTS ON WHAT TO DO WHEN CONSIDERING DEVELOPING A BUSINESS DEAL THAT INVOLVES OTHERS OUTSIDE YOUR BUSINESS.

There are three phases that need to be considered when seeking to set up a business deal which are pre-deal which considers what needs to be done before the deal is signed; establishing the deal which is considering what components need to be addressed in the ‘formal' business agreement; and the third is post deal after the deal has been signed and agreed to.

A. Pre-deal

There are seven key considerations that will help when setting up a new deal to increase the likelihood of success.

1. Only align with businesses that share your values which will enhance the nature of the relationship you establish with the other party in the deal
2. Be willing to operate from a position of trust ensuring that ethical and honest behaviour is the standard mode of operation with each other
3. Leverage off each others strengths to achieve a common goal and ensure sustainability, profitability and on-going alignment
4. Actively communicate with the other party being transparent in your dealings with them and sharing information appropriately and respecting each others confidences
5. Be clear on your expectations of the other party and what you hope to gain from the arrangement you are seeking to establish
6. Always act professionally within the context of the arrangement being mindful of not employing inappropriate behaviour or language when interacting with the other party this includes not speaking about them in derogatory terms
7. As part of the initial discussions establish a framework for dispute resolution should it arise so that they can be managed quickly and effectively minimising any potential impact conflict may create

The pre-deal activities are the part of the process that sets the foundation for the deal so it needs to be handled productively.

B. Establishing the deal

The key factors that need to be established in this phase are to ensure that the following aspects are clearly defined as part of the agreement:
• each party's contribution to the deal
• business boundaries ie: inclusions and exclusions
• management framework
• escalation processes for dispute resolution including an impartial mediation process
• parameters for withdrawal from the agreement - notice periods etc.
• service levels
• penalty clauses
• reporting requirements and framework
• staffing arrangements

Apart from the specifics defined in the agreement it is important to ensure that good legal and financial advice is obtained to ensure the viability of the arrangement and that neither party is inadvertently disadvantaged as a result of the agreement.

C. Post Deal

This is the time when the deal becomes reality. It is the responsibility of all relevant stakeholders to ensure the deal is effective and valuable for all concerned. Some of the ways to constructively do this is by conducting regular meetings to discuss the agreement and any issues that may have arisen in the intervening period. Having regular meetings in alignment with the management framework helps to ensure that no issue becomes too big and creates difficulties or potentially animosity between the parties concerned. One viable way to do this is to explore what is working well between the parties involved. This can continue to show the value the agreement is providing and provide a method to continually build on the strength of the relationship. With this as a base it provides a stronger foundation to discuss any issues that may arise.

When creating a business deal there is much work that occurs to ensuring its effectiveness, it requires on-going focus and attention. It is not something that can be just put in a draw once the deal has been signed. If it is then it is more likely that it will be a recipe for disaster rather than success.

Carol McGowan is a Business and Life Coach, Counsellor and Educator. Her passion is helping individuals and businesses to make successful transitions. Carol has over 35 years experience in business as well assisting 200+ people make successful career transitions after having faced redundancy. She may be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it