Isolate Your Business Deals Or They Might Get Away On You
You know when a salesperson has got a sale locked down and then they keep talking when they shouldn’t and say something that loses the sale?
This is sort of like that.
When you have an important, complicated, or multi-party business deal in the works, it’s best to keep it isolated. Control over who’s talking to who, both internally and externally, is critical to making the deal go smoothly.
A Good Deal Gone Horribly Wrong
There are a lot of different scenarios that can arise when a Business deal isn’t properly isolated. This is one:
My neighbor was recently negotiating to sell his company to one of his competitors. The deal was taking longer than it should which is never good. Word started to get around about the deal.
All of a sudden, some of his top salespeople jumped ship and went to work for the competitor and the deal completely collapsed. Without his top salespeople, business has been spiraling down and he’s had to lay off some people and try to rebuild.
Companies buy other companies mostly to gain that company’s customer base. Since the competitior got all the salespeople who know all the customers, they didn’t need to buy the whole company. The competitor has rocketed ahead of my neighbors company simply because he didn’t incubate the deal.
Tips On How To Isolate A Deal
- Get an NDA. Have the company you’re dealing with sign a non-disclosure agreement before you start wheeling and dealing. An anti-compete clause in the NDA that prohibited my neighbors competitor from hiring his employees might have prevented the deal from going sour the way it did. Clauses like this are usually in effect for 1 year and the clause could be declared null and void in the final sale agreement.
- Keep the negotiating team small. Your negotiating team should consist of a limited number of people. If the negotiations require special reports or analysis from other people in your company, it’s the negotiating team’s job to get that information and present it to the other company in an organized and contained manner. Don’t give the company unfettered access to your talent. Don’t let someone who’s not familiar with the details of the deal bury it by saying the wrong things.
- Separate your business deals. If you’re working on multiple deals such as breaking up a block of assets to sell to different parties, keep those parties away from each other. The reason for this is that if they’re all on the buying side of the fence and you’re on the selling side, they could potentially get together and beat you up at the negotiating table. Schedule your various meetings with different players in well spaced intervals.
Cash might be king but knowledge is power. Stray information in the wrong hands causes many business deals to fall to pieces. Isolate your business deals.