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2 minutes reading time (478 words)

Why Big Deals Suck!

20180831_bigdeals

I’m going to say something pretty controversial, you can’t build a business off big deals. Don’t get me wrong, I love a big deal but to build a business off them is next to impossible.

Escrow.com

I’ve talked to so many entrepreneurs that espouse the next big deal that’s just about to land. In fact, just the other day I was speaking to a person not in the domain industry that told me they had a million dollar deal they were about to get commission on. The problem was they’d been working on the deal for the past two years….

Whenever I hear someone talk to me about a big deal I immediately give it about a 1% chance coming off. Big deals are like that. They take a huge amount of time and resources and have a slim to no chance of actually coming through.

The reasons for this are multiple but some of them could be because the person you’ve been negotiating with suddenly gets moved departments, they leave the business for another opportunity or they are told by a superior that the deal is just not going to happen. When you add time into the equation, anything can happen.

Likewise, if you have a high value domain and have been negotiating the purchase of it with a multinational corporation then don’t be surprised when the person you’ve been dealing with suddenly says, “I just need to get upper management to approve the deal.”

I’ve never seen anyone in a big corporation stick their neck out and do a deal without a least a pile of committees approving a deal. If you don’t understand this then you’re likely about to go through a learning experience.

The single biggest problem with trying to get big deals across the line is they are completely unpredictable. In business, if you can’t predict your revenue line then how can you plan? The simple fact is, you can’t.

My wife has a saying, “Like clockwork.” What does this mean? The fifty dollars that comes in month in month out is far more valuable than the elusive promise one day. What’s more, if you can consolidate a lot of fifty dollars together then you suddenly have a consistent revenue model to drive your business.

As you grow your business with the small deals then the business will have the capacity to do some of the BIG deals. It won’t be a do or die scenario but rather building on sustainable growth. More than that, the product or service that you are putting together for the big deal has already been proven on the smaller clients.

If you’re launching a start-up business then my advice is to build a consistent revenue line that will keep the lights on as you plan and move the business forward. Don't get tempted by the big deal...!
 

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Tuesday, 18 September 2018
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