I have always said,
“Good agreements make for great relationships. Bad agreements make for bad relationships.”
And having done many deals over many years, I can see where I have had a profitable and fun relationship when there are explicit expectations. And when there has been innuendo or ambiguity, relationships suffer because there is not a good agreement.
There are a lot of reasons bad deals happen. Sometimes it’s out of laziness on one or both parties. Other times, goodwill. I have made many of the mistakes and I am not one to keep repeating a script that doesn’t work. I want great relationships and have a lot of fun at it. Sure, there’s opportunities for making money, but I also enjoy people and life. Life’s too short to miss the fun.
So, if you’re like me and want to avoid the mess of unmet expectations or resentments that follow bad deals, then here are 4 keys I have learned over the years:
- Make sure the other party wins. We have too many options today and so does your counterpart in a deal. If you burn them or try to tilt advantages to your side, you may collect on a deal, but it will be short-lived. Playing for the long-term relationship and building trust and credibility have a much higher return. It’s why it is so important that when you take money, you deliver. Plain and simple. You have to think deeply about helping the other person win. This may include achieving a fitness goal, getting $100K in revenue or having harmony in their relationships. That win is the focal point of the deal.
- You have to put it in writing. Verbal agreements are extremely risky. How can you read between the lines or pick up intentions? Writing clarifies and clarity is your friend when building agreements. At a minimum level, exchange emails to clarify what is expected and what will be delivered. Outline what you have discussed, what items will be delivered and what the pricing will be for the venture or engagement. It’s good to have a back and forth and even a review of the details. This way nothing gets missed.
- Account for uncertainty. You can’t control or predict the future. What if something goes wrong? I don’t want someone hating me and I don’t want to hate someone either. Things do go wrong. Talk about those What If’s and get clear on what should happen. If the relationship is important, then make sure the other person knows, “Hey, who knows what will happen. But I want to maintain a long-term relationship. How can we make sure that happens if things don’t turn out the way we hope?”
- Celebrate. It was Socrates that said, “The unexamined life is not worth living.” I don’t get people that move on from one thing to another without reflecting and celebrating. How unfulfilling. When you celebrate, you are able to have a reward in the celebration itself. But it also sets you up for better agreements. The celebration allows you to have a case study of sorts. You can see how your partner sees the process and outcomes and tune in further. You also close the loop on your agreements by making sure there is no expectation left unmet. Winning is fun and celebration puts your wins in an explicit light.
I like finding good deals and getting to mutual wins. It has a compounding effect for business and life. I make more money and more friends in the process.
It takes leadership from you. Instead of playing things loose, you show respect for the other party by putting concerns, hopes, and goals on the table.
Imagine laying out the deals, agreeing to them, knocking them out and celebrating at the end. If you have a dozen of these experiences under your belt, deal making becomes habitual and your convictions on what you can deliver will solidify over time.
So how do you like making deals?