Whatever may seemingly put one at a disadvantage over time is often frowned at and done away with much sooner than it comes.
It is an underlying principle in business that the party(s) involved seek a favorable marker, eliminating options that tick as bad – either in the short term or in the long run.
There is no justifiable reason why any will opt to venture into a business deal if, and when it does not exceed its expectations, or at least meet its projections.
A business deal (or no deal) refers to a mutual agreement between two or more logical parties who (do not) want to do business.
Usually, this deal is carefully carried out between a seller (supplier) and a buyer (receiver) to exchange tangible or intangible items of value such as goods, services, information, money etc. This is considered to be completed or finalized if two or more parties reach an agreement on the terms and conditions of the deal.
The last phrase is the more important element of any would-be deal or no deal, as it is expected that the parties involved protect what are their essential rights and interests.
Business deals that happen (and, the no deals likewise) come in different shades and sizes, and with distinct clauses and characteristics. At other times, they come at diverse times and seasons, from different parties and prospects.
Some of such deals may seem as subtle and gentle as that which the chief adversary tried negotiating with our Master Christ in the wilderness, while others are confrontingly bold and brash as that of the founder of the Tudor Investment Corporation – Paul Tudor Jones, a contrarian investment magnate and Wall Street legend.
He made his mark going against popular opinions by looking for opportunities where others see red flags. He has it on record to have defied financial gravity, staying afloat and earning positive returns for thirty-two consecutive years. While others bail out on the bear market, Paul goes bear-hunting, sometimes riding wide when the market is bullish.
Here is the bottom line: whatever form a business deal takes, what makes it a DEAL OR NO DEAL is depicted by the principles, and the outcomes promised.
When the positive(s) is greater than any negative narrative, it is highly probable for a deal to follow. Howbeit, when its disadvantage tends to outweigh the advantage (as envisioned by either party), then, a deal will fall through, leading to a “no deal”.
While the list is inexhaustive, here are some likely signs of a good Business deal (happening) –
1. Organisations are able to focus on their core competencies or strengths without worries about loopholes in the system.
2. Professionals and organisations can pool and share from the wealth of experiences or resources of each other, resulting in efficient utilization of such.
3. Businesses can seamlessly venture into a new territory by partnering with locals who are more familiar with their economy, and, understand their terrain better, thereby expanding operations and customer base.
This is one peculiarity with companies that operate the franchise model.
On the flip side, a supposedly business deal can become a “no deal” when one or all of the parties involved fail to uphold the terms of the deal, thus, creating tensions leading to great loss of resources, capital etc.
This, if spiralled out of control can dent the public perception and integrity of the parties involved.
Moreso, commitment to a deal have sometimes required more resources – capital, manpower, time, etc. than one of the parties envisioned. As such, there may be a fallout as holding up may lead to less efficiency in operations, which leads to lost revenues.
It is necessary, especially when huge capital is involved that such agreement be put in writing to commit each other to their responsibility, and, to determine when such can be flexibly adjusted or terminated.
Here are a few signals one can look out for to determine if a business is a DEAL OR NO DEAL :
* Integrity of the party (s) involved
* Viability of the business
* Law of Leverage
* Profit or Return on Investment
* Backward Integration
* Future Concern.
* Integrity of the party (s) involved : Only do business with men that keep their word. Not much should be said about this. Trust is harder to earn when lost.
* Viability of the deal : Warren Buffet, the Oracle of Omaha admonishes that “one should not test the depth of a river with both feet”. Whenever a deal pops up, examine and prove its merit before venturing heads on.
* Passion: When an opportunity to deal aligns with one’s passion, it is almost impossible to convince the party otherwise, having weighed the pros and cons. Many well known executives still find time to engage in their favorite pastimes despite their thick work schedule.
* Law of Leverage : If you do not understand leverage, you will work too hard. The law of leverage helps one accomplish more with less effort or resources in the long run.
Knowing and applying the laws of leverage have helped taken businesses global, minimize overhead costs, as well as mazimize profits. A typical example is business model of multi-level marketing where other people’s money, time and energy is positively leveraged.
* Value : This is the perceived worth of a thing or person. If the value of a deal does not add positively to what already exists, rule it out – irrespective of who might advocate the deal.
* Profit or Return on Investment : Numbers tell a great story when it comes to making or shaking off a deal. Hence, measure the effectiveness of the resources being deployed before committing to a deal.
* Backward Integration : This concerns itself with how a deal or no deal can be replicated in a system to strengthen it, and, foster greater visibility.
* Future Concern : The story is told globally of an earlier co-founder of Apple, who sold off/ gave up his deal early on when it started.
Today, he is not reckoned with, while late Steve Jobs and Apple, on the otherhand is worth trillions of dollars.
Wisdom is profitable to direct. Yet, in making and taking business deals, professionals, business operators, organizations etc. MUST do their due diligence, communicating clearly every agreement (and possible expectations).
So, when next a business opportunity presents itself, ask in your mind “Is this a DEAL OR NO DEAL?”