Tips for Entrepreneurs – #4
We talk about the importance of contracts—and they are important—but there’s something else behind contracts that matters even more. People. If you sign a contract with a person of good character, problems are much less likely. Because when you get down to it, there’s no such thing as an ironclad contract. There will always be a skilled lawyer who can shred the best one. So deal with good people, and don’t be afraid to investigate their character (for example, by conducting a background check or simply paying attention to their reputation) and business record. If you find out that your negotiating partner makes deals in bad faith, or if you feel like you’re being swindled in a contract negotiation, don’t be afraid to walk away. You can’t regret a mistake you didn’t make.
An agreement is only as good as the people involved.
Featured as Tip number 25 in my book, The Evolution of an Entrepreneur.
From the Jack Nadel Archives
While running Jack Nadel International, I was introduced to a pen manufacturer who had a shady reputation but gave me a very low price on a large quantity of pens. The specifications called for metal refills—plastic refills were available at a lower price.
The pens were drop-shipped to our customers. One day, someone gave me one of those pens and, lo and behold, it had a plastic refill. That was the manufacturer’s last order from us. When an individual has a shady reputation, he or she has usually earned it. This became an opportunity for a lesson learned…the net result of the transaction was that I was able to negotiate the same price with a reputable manufacturer because I could guarantee a huge quantity. I also confirmed the new manufacturer’s veracity by spot-checking the merchandise sent to my customers.
How Does This Tip Apply Today?
Unfortunately, we live in a time of rapidly deteriorating trust in public and private institutions. The Business Roundtable, a leading association of CEOs and corporations, said in a 2009 report that widespread public distrust in business was hurting companies throughout the entire U.S. economy. Although it might not seem like one business can do much to change this perception, in fact, it can. First, you can always approach business from a place of integrity yourself. Second, you can hold your business partners to a high standard. Don’t be afraid to check references and then make your decisions.
Tips for Entrepreneurs
This post is part of my regular “Tips for Entrepreneurs” blog post series, featuring shared experiences and wisdom from my career as a global entrepreneur that I outline in an easy to understand tip format with a brief story/snippet from my own business experience, as well as a current anecdote about how this tip applies in today’s business environment. These entrepreneurial tips are also featured in my award-winning book for entrepreneurs, The Evolution of an Entrepreneur, featuring 50 of My Best Tips for Surviving and Thriving in Business.
Referenced for How Does This Tip Apply Today? materials:
“Public Trust in Business,” Business Roundtable, http://www.corporate-ethics.org/initiatives/public-trust-in-business/