Looking Beyond the Deal
Before you conclude any deal, there needs to be a fair amount of research and analysis done on the counterparty. Due diligence teams are given the task of investigating all aspects of the counterparty with the purpose of looking beyond what's at face value. Various underlying factors could result in the negotiations altering from where you assumed they'd go and this can result in unnecessary delays and issues.
What's the Influence?
There may be something that you don't know about the counterparty that's only revealed when you look beyond the initial negotiation. These could be factors like:
Third parties: There may be other companies or businesses that are affecting the counterparty and their decision-making. They may have a stake in another deal that you might not know at first glance.
Unapparent internal issues: ?Does the team all get along? It could be that one manager doesn't work well with another manager, or perhaps there's a conflict between managers and other staff. A rift like this can filter into the decision-making process.
Desired outcomes that don't align: The influence of the counterparties could be that they have a specific way of doing this which isn't necessarily how your company does things. Implementation can be tricky if there are these types of incompatibilities.
When you take the time to see what the real interest is and develop a risk management framework, you can plan a more effective negotiation strategy that concludes in a mutually beneficial deal.
Signing on the Dotted Line
When you are ready to present your contract to the counterparty, it's imperative to ensure the format is correct. If not, the best thing to do would be to convert PDF to Word. Aside from using professional business formatting, it should be error-free and easy to understand, while making sure that all your bases are covered. This important step is often overlooked but can make or break a deal, depending on how comprehensive your contract is.
Questions to Consider
When gathering information on the counterparty to mitigate risks, key questions to consider asking include:
Who are the supplies and distributors?
What is involved in the infrastructure and administration?
Are there any other business partners?
What is the demand like for the products or services offered?
What licenses are in place?
Are there connections to government agencies?
Is there a history of litigation issues, criminal activity, or product safety?
Conducting a risk analysis of this nature will help you to identify any potential risks that could create a flawed deal. By understanding the counterparty and having in-depth knowledge of their activities and business profile, you can make an informed decision that allows you to avoid possible repercussions in the future.
Develop a Framework
Gathering intel requires a guideline or system in place which makes the process easier for your negotiating team. This framework should be developed and implemented before the negotiating commences. Getting tips and advice from your business community is an excellent way to work on this strategy and risk analysis framework.
A great idea is to join your local chamber of commerce.