Cash Flow: The Make or Break of a Major Contract
It’s common for businesses to get so excited about landing a big deal that they gloss over the detail involved in delivering the work. They just look at the revenue, consider their margins and rejoice at the extra money they’ll be making. Then they sign the contract.
A big customer will present you with a lengthy contract that has been developed over the years by top class lawyers. The early euphoria can be short-lived when, a short way down the track, you realise you have committed to a job that could send you broke.
In this week’s podcast Andrew Birch, a director of Vantage Performance based in Perth, explains that you really need to spend a lot of time consuming the detail of that contract. And, he says, you should be prepared to go back to the customer and negotiate aspects of the schedule if they make the job unworkable or overly risky.
Engaging lawyers on your side can push up costs at the onset, but the reward will be worth it. Especially if it saves your business.