A Bad Deal and Its Bad Consequences
As a business owner, keep potential negative consequences in mind when you negotiate contracts of any sort. When those consequences threaten to become real possibilities, you must sometimes walk away from a deal. This can be tough when you want to win every negotiation, but that may not be possible. It's better to step back than face the following results.
Loss of Credibility
If you enter into a bad deal and it turns sour, your business community is going to know it, and you could lose some of your credibility. Even if you present an unprofessional potential contract or accept such a document, you may lose face. This is why it's important to make sure that every document is clear and concise with all details in place. Your documents must be accessible, too, so use software that can convert PDF to Word for the sake of accessibility and security.
Loss of Money
A bad deal can also mean a loss of money for your company. Quaker Oats, for example, made a deal to merge with Snapple in 1994, paying $1.7 billion. Only a little over two years later, the company sold Snapple for only $300 million, taking a huge loss. Also, when Mondelez International was set to purchase Hershey, Hershey rejected Mondelez's offer, and Mondelez walked away. Hershey simply wanted too much money, and Mondelez didn't want to lose out by paying the high price. Even if you aren't operating on such a large scale, a bad deal could move your company from black to red or significantly decrease your profits.
Loss of Potential
Further, making a bad deal could very well prevent you from looking at and negotiating deals that are much better for your company. By focusing on slogging through the difficulties of a troublesome set of negotiations that just aren't going well, you might be missing out on opportunities for good deals.
Loss of Time
Also, as you're struggling your way to sealing a bad deal, you're probably wasting quite a bit of time that could be better spent building your business. The employees helping you with the deal, doing the research, crunching the numbers, and sitting through meetings are also losing valuable time that could be used more efficiently.
Loss of Employees
Those employees may become frustrated, too, especially if the bad deal goes through and the negative consequences manifest. Some may quit. Others may have to be let go if your company begins losing too much money. Your employees are valuable assets, and you don't want to lose them.
Loss of Market Reputation
Finally, if you make a bad deal and word gets out to your customers that your company is struggling because of it, your market reputation may suffer and sales with it. This can be a serious negative consequence that you should try to avoid.
Don't Be Afraid to Walk Away
Walking away from a potentially bad deal doesn't mean you've failed. It just means you're keeping the best interests of your company in mind.
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