A Reminder that Time Kills Deals — Originally published in BusinessAir Magazine, June 2015, Volume 25, No. 6.
While I was juggling hundreds of transactions concurrently for over a decade, I learned the critical lesson that time kills deals. I still firmly believe this, and had a potent reminder of it recently.
Not long ago, I was representing an aircraft owner in negotiations with a potential service provider. Our discussion reached an impasse over a provision in the management agreement. The contract included a significant deposit requirement that had never been disclosed during the contract negotiations with my client’s business manager. Interestingly, the terms in question specified that the deposit was not held if the management agreement took effect, so there was little risk of forfeiture. However, since the service provider had failed to disclose this substantial requirement during the negotiations with my client, I was not inclined to let the issue drop. As a matter of fairness and principle, I believe that all dollar amounts in the six-figure range should be disclosed specifically during the initial sales negotiations.
Furthermore, because my client wasn’t in any rush, I wasn’t impressed by the financial terms of the deal, and I honestly felt the terms in question should not be included in the final agreement, I thought time was on my client’s side. While I was navigating the corporate maze at the service provider’s headquarters to locate the right person to resolve the issue, the business manager for the aircraft owner (my client) spoke to an aviation consultant on another client matter. Guess what? The consultant asked about the current deal on the table. The consultant reviewed the numbers and told the business manager it was a bad deal all the way around. Indeed, I had also advised my client that the management deal did not make financial sense, but the service provider had already been selected. Since the business manager was now hearing from both an independent consultant and an attorney that the business terms were questionable, he became more open to considering other service providers.
Time killed this deal. Had the service provider simply acquiesced to the deletion of an immaterial provision and wrapped up the transaction, the provider would have closed the deal before the consultant ever saw the numbers. It was nice to be on the side where time kills a deal to the benefit of my client. But this is rarely the case.
Another reminder I had regarding the timeliness of a transaction occurred when I recently negotiated the sale of my home. The buyer and I were down to a very small difference in the purchase price. In these situations, it is sometimes hard to keep emotions out of the negotiations. But the desire to win on a small point needs to be trumped in favor of business logic. Keeping the deal alive and getting the house (or the aircraft) sold is always more important than being inflexible about the number you want, provided the two numbers are close enough that it is an irrelevant amount. In the case of my house, after a sound night’s sleep, I realized that the buyer’s offer was not only a fair amount but gave me the necessary closure I needed — an outcome that was well worth the slight discount in price!
When negotiating a deal, each side has the power to control the timeline. If you believe, like I do, that time kills deals, then I recommend the following:
1. Respond to all negotiation points the same business day they are received. If approval is needed from a source not accessible the same day, communicate the reason for the delay to the other side.
2. If the negotiations are going back and forth in more than three (3) emails on the same point, pick up the telephone or schedule an in-person meeting to discuss the point in person.
3. Never be the reason the deal is moving slowly.
4. If an upcoming vacation or day off is planned, communicate this to the other side so the deal can be concluded before the vacation or handled by someone else – who has been adequately briefed – during your absence.
5. Never let it be about winning. Always be sure that you are arguing for a point that has sound business logic behind it and that it is never about winning, being right or just being difficult.
6. Negotiate without being hateful. Spite and a desire for vengeance clouds good judgment and makes it harder to move the negotiations to resolution.
7. Remember that reputation is the coin of the realm. The aviation industry is a small community and being perceived as a foot-dragger or a deal-killer will hurt both you and your clients, now and in the future.