7 Signs Your Business Deal Won’t Pan Out

Partnership deals are a key strategic advantage for startups and small businesses. However, not all deals are created equal.

Partnership deals are a key strategic advantage for startups and small businesses. But not all deals are created equal. And many deals fall flat; dead on arrival. Here’s a look at 7 warning signs that a deal with a partner or vendor isn’t going to pan out.

 

1. Long wait times between communications

“I find that when a partner or vendor takes a long time to respond to our calls or emails, it’s not going to work out. I want to work with companies who are eager to work together, and a lack of responsiveness tells me that they are either too busy to work together or they don’t have their act together, and I will constantly be frustrated/underwhelmed by them and their performance.”

– Diana Goodwin, AquaMobile @dianamgoodwin

 

2. You have a hunch

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“It’s easy to overlook something so small as what your instincts tell you. But if you look back at many of the past deals that didn’t pan out, I’d venture to guess that if you really thought about it, your gut was telling you it was heading in this direction. It’s not everyone’s style, but listening to your instincts is a powerful tool in navigating decisions.”

– Darrah Brustein, Network Under 40 @DarrahB

 

3. Information is inconsistent

“When a story or terms change after the first communication, it’s a strong signal that you should walk away and not waste more time pursuing the relationship. Forget a three-strikes policy. With me, it’s one strike and you’re out. There are plenty of potential partners and vendors. Don’t waste your time with ones who aren’t 100 percent honest and upfront from the beginning.”

– Jonathan Long, Lawye.rs @long

 

4. Lack of accountability

“When performance is lacking, they are quick to blame everyone else and take no personal responsibility. It’s next to impossible to change people and should be a major red flag if they can’t take responsibility for their own actions. This usually shows up relatively quickly in the relationship and needs to be handled immediately. Consider replacing rather than trying to change behavior.”

– Drew Gurley, Redbird Advisors @drewgurley

 

5. There’s a bait and switch

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“You have had a great conversation and feel things are going well. You ask to have the other person write everything that was agreed upon and send it to you for further mutual discussion. When this person sends you over the written details of the conversation, it looks nothing like what was agreed on. This means one of two things: a bad listener, or untrustworthy person. Neither are good options.”

– Jay Johnson, Small Lot Wine @JayAlanJohnson

 

6. No agreement on non-disclosure terms

“Depending on what type of company or individual we may be working out a deal with, there will often be mutual non-disclosure/non-circumvention provisions. They’re mutual, and hold my company to the same expectation. So if a potential partner starts arguing the term of NDNCA down to less than 24 months, I get concerned that their heart isn’t in the right place.”

– Nicholas Nadjarian, Industrial Motor Power Corp.

 

7. Conflicting values

“One of the biggest indicators of a successful deal that most people don’t know about is value alignment. The first discussions that ultimately decide if both parties will make the deal cover the financials, plan and strategy, but the real sign of a good deal is the values that they hold. These values determine the way they work and, in turn, their compatibility to work with your business.”

– David Tomas, Cyberclick @davidtomas

 

This article has been edited.

 

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