The importance of defining deal breakers with friends and family

Just a short, but important entry for today.

It is a strong personal belief of mine that important relationships, business ventures and partnerships, your job, and investments should have a set of defined deal breakers. The reason is so that if something happens in which you have to terminate a relationship, it will be clear and justifiable. So what is a deal breaker? A deal breaker is:

Any issue or factor that is significant enough to terminate a negotiation. (source)

This is very similar to a physical legal contract, but unlike a legal contract many of these things cannot be put into one. They often involve matters of ethics, integrity, and behavior.

The reason that I stress defining deal breakers is because as small time investors, many of us at some point may go into some sort of business partnership or may hire a friend, family member, or both. This sort of business venture is very different than normal business ventures. Because of your relationship, friends and family will often demand or expect a different level of treatment and tolerance.

They may often demand or expect more leniencies when it comes to performance. If there is any discipline involved, they may often use your relationship as leverage.

This is not fair to you and to others.

We can use defined deal breakers to create real expectations and provide consistency before the onset of a deal.

Here are things to consider when defining deal breakers:

  1. What kind of behavior you expect
  2. Consider a no special treatment agreement
  3. Things or behaviors that will result in immediate termination
  4. Monetary expectations
  5. Expectations for yourself

This can be used for much more than just negotiations between friends and family.

By sitting down face to face and deciding and writing down your deal breakers beforehand, you set up expectations, leave very few questions unanswered, and mitigate a lot of the potential drama and aftermath should a situation take a turn for the worse. More importantly, it provides leverage for you and helps you “watch your back”.

The final step is to stay consistent and follow through with your agreements. This is the hardest part of the process. There will be a strong desire to show compassion to those you care about when they commit a deal breaker. The manner in which you handle it is still your decision, but remember why you made the agreement in the first place. Sometimes the hardest decisions you have to make in life are the right ones.

Photo Credit:

Photographer: jscreationzs

Comments
3 Responses to “The importance of defining deal breakers with friends and family”
  1. kendraslate says:

    Great Blog Gian! This is so true! Nothing’s worse than doing business with certain individuals without expectations or rules layed out ahead of time. Like you said, it helps you, “whatch your back” when others won’t. Great Advice!
    Kendra Slate
    http://kendraslate.wordpress.com

  2. Kendra Slate says:

    Great Blog Gian! I totally agree that certain rules and expectations should be laid out in order to, like you said, “watch your back.” There’s nothing worse than going into a business deal, and feeling like you are taken advantage of.

  3. Gian Sorreta says:

    Thanks Kendra.

    Unfortunately, just as so many others, my family has learned the hard way in this particular area. I can do my part and try to not let history repeat itself.

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