As an entrepreneur, it can be exciting to have someone wave money at you. My own business is not exactly one that a venture capitalist is going to invest in, but even small deals can matter. Whether you are starting a business that requires bringing in a partner, or whether you are providing consulting services that require that you do dozens of small deals every year, it can help to have a handle on the situation going in. Here are 4 tips that entrepreneurs can use as they prepare to get their deals done:
1. Establish What’s Most Important to You
Going in, you need to know what your deal breakers are. You should prioritize certain items, and what you feel you must retain, whether it’s creative control, a certain timeline, seller liability cap, option pool size or something else. If you are working with a team, make sure that all of you are in agreement as to what the most important aspects of the deal are. You will have to negotiate, and you should know what you’re willing to put on the table, and what is non-negotiable.
2. Know Your Areas of Flexibility
Most deals require some compromise. If you aren’t willing to offer something to the other side of the table, the deal may not get done. As you and your team figure out what is most important, also identify items that you have a little more flexibility with. While my writing deals aren’t exactly the high-end transactions that many entrepreneurs experience, I have still learned that it is possible to be flexible in some instances, whether it’s offering a lower price in exchange for revenue sharing, or writing shorter posts to allow for a price the client can deal with. You can employ similar tactics. If you can show some flexibility, you will be more likely to get the deal done.
3. Be Willing to Walk Away
In any negotiation, you have to be willing to walk away if the most important items aren’t included. If you have identified something as a deal breaker, you have to be willing to walk away — even if you have invested a lot of time and energy into the deal. This is why prioritizing is so important. You give on less important issues, hopefully so that you can stand firm on what you feel is vital. If you capitulate on something you previously said was a deal breaker, that’s a cue for the other side to begin walking all over you.
4. Consider Involving a Professional
There are corporate lawyers who facilitate deals for a living. If you feel as though you need some help protecting your interests, bringing in a professional can be a good choice. This is especially true if this is your first deal, and matters are more complex than what you can handle using LegalZoom. In the past, I’ve had my lawyer uncle look at some of my writing agreements. Just knowing that someone who does this for a living is on your side can help. You can discuss your deal breakers with your lawyer ahead of time, and map out an action plan to help you do a deal that benefits all parties.