Avoid Wasting Time & Money on Prospective Business Deals

Big transactions take an immense amount of time and money. Ditto for starting new businesses. They’re well worth it when a profitable deal closes or a new venture takes flight. Unfortunately, for every one that takes off, a hundred never make it out of the hangar. That’s why savvy business people are skilled at managing the process to minimize wasted time and money. Here are some of their tips.

Be Clear About Your Objective. To measure and assess, you need a yardstick. What is yours? That is, how will you evaluate your project? Number of souls touched? Amount of waste cleaned up? Percentage that say “yes”? Amount of money earned? Set guideposts and they’ll keep you focused.

Not So Fast on the Well-Paid Specialists. Maybe the largest money pit opens up when experts are hired and the deal fails to close. The key is to hold off on the high-paid experts until as late in the process as possible. Also, once they’re hired, don’t be afraid to manage them actively. Have them update you constantly on the time they’ve spent and the tab they’ve rung up. Better yet, give them a budget and insist they stick to it.

Qualify the Other Parties. People waste time. We have to be cautious about who we are willing to work with on projects that require a lot of time and money. Here are some tips for qualifying the other parties:

• Are they the decision-maker(s)? Who else has to approve the project before it’s a “go”? Insist that you develop a direct dialogue with all decision-makers. Fail to do so and you leave yourself exposed.
• Do they have the money required? If not, where will they get it? Have you talked to the capital provider and received answers that give you confidence?
• Have these people succeeded in the past? Have they shown willingness and ability to deal? Make decisions? Get things done? Take risks? Invest money?
• Are they willing to cut to the chase and deal with the big issues early on, or do they shy away from potential deal killers?

Qualify Yourself. While you assess the other parties to determine whether you can trust them not to waste your time, assess yourself. Is this a deal you will do? Do you have the money required? If you do, are you willing to risk it on this venture? If you are selling, are you serious about letting go and doing something different? Will your spouse go for it? Are you sure you’re not wasting the other parties’ time? If the answer to any of these is no, try to turn them into a yes before you waste anyone’s time Ñ including your own.

You Can’t Please People. Unfortunately, business is not about pleasing people. This does not mean that business is cruel or unkind or uncaring; it’s just efficient and economical. A common way to waste time and money is trying to please other people. An example is agreeing to work exclusively with someone who is not the sole decision-maker because the party you are dealing with resists your insistence on talking to all decision-makers before you commit more time and money. Another example is failing to tell the party that you don’t want to proceed because it will disappoint him or her.

The Process or the Accomplishment? Many people are happy simply enjoying the sport of talking about and working on deals, but they rarely get any done. So the first question to ask is: Are you serious about doing a deal and making some money?

Get It 80% Right, Then Pull the Trigger. If you wait until it’s 100% right, you’ll never get going. Instead, get it 80% right, then pull the trigger. Figure out the other 20% as you go.

If the Ship Is Going to Sink, Sink It Now. A lot of people want to delay the inevitable. Savvy business people say, “Why wait?” If the ship is sinking, wouldn’t you rather get it over with? Sink it now so you can swim ashore, dry off and get on with your life. Similarly, remember when you were young and you were due a spanking? Didn’t you prefer to get it over with rather than wait until after dinner? Same principle. If the writing is on the wall and your new venture is not making it, call a meeting and tell your partners what the tea leaves say. If they agree, you’re 90% of the way to your next, more profitable venture.

Time is your most precious commodity. If you had all the time in the world, you could develop additional products and services, sell to endless numbers of prospects, and add to your knowledge base in ways that help you make more money. You could argue that money is more precious, though you can always borrow money, but you can’t borrow time.

Prospective business deals can soak up time like no other, and most business ventures never take flight. Guard yourself. The above tips will help you.