7 THINGS TO KNOW BEFORE ENTERING A BUSINESS DEAL IN NIGERIA
things to know before entering a business deal in Nigeria
A deal essentially means the act of transacting within or between groups. There are however some important things to know before entering a business deal in Nigeria. A business deal is a mutual agreement between two parties willing to do a business and is said to be finalised and complemented if two or more parties agree to the terms and conditions of the deal. The deal may be related to exchange of goods or providing the services to a particular organisations. Both parties come together and agree to the terms and conditions that they deem necessary to protect their interests and rights. They both formally sign on the papers and finally conclude the deal.
A business partnership often begins with great enthusiasm a d high expectations, but sadly mostly ends with long, hard courtroom battles, where both parties face bitter tensions which leads to irrevocable losses.
It is therefore important to gather as much information as possible about the intended business and your potential partner.
For this reason, here are 7 things to put into consideration before entering into a contract that can help protect your business and your assets
- Know the other party. This is crucial among the things to know before entering a business deal in Nigeria. Setting out to accomplish an important task with the help of someone you don’t trust is a terrible idea. If you go camping with people you just met, you certainly won’t trust them with your belongings, and even when you feel you can, you won’t do so totally. The same case couldn’t be truer in a business deal/ partnership. A business partnership is not the kind you want to sign a pact based on guts and hopes for the best. You will have to be strategic and have a clear and a definitive approach for what to expect and for best results.
Be sure to gather ample information about your partner. Ask yourself these questions.
> Are they in a stable place in their lives?
> What are their personal goals?
> To what extent do I trust them?
Be sure that the business you are contracting with is a legal entity in Nigeria i.e they have to be registered and licensed to carry out business operations.
Carry out this simple survey on your potential partner
This of course cannot be overemphasized. Run background checks on the other party’s credibility with last deals. Basically ask around by word of mouth, Nigerians readily supply such information. Resumes are great, but mostly people will overstretch the truth, and others can be a flat out lie.
It’s up to you to make sure your potential partner has strong and reliable references to validate any information they served to you. Otherwise, you might want to back out of the partnership altogether as this may flag red- alert for the deal.
Look at their online presence. You can gleen a lot of information about a person based on their presence online. LinkedIn allows you to see who they are connected to, what people say about them, and also what they say about others. Twitter allows you to understand how they perceive the world and also what content they consume and appreciate. Facebook may help you understand what is important to them in their personal life, and also the kind of content they consume and appreciate, and also the lifestyle they are predisposed to
Also looking out for any blog posts or press mentions can give you great insight into how they operate and any previous success that they have had. Linking all this information up can give you a good sense as to whether or not they are someone you might likely want to do business with.
Make sure they share your values. Be sure that your potential partner believes in your working ethics and values. Working with partners who do not share these values could seriously main your business partnership.
- What is the exact product or service? Be sure that you and the other party are on the same page, literally and figuratively. This is the meeting g ground between any two parties. The reason of the partnership in the first instance is the exchange, or transaction of a product or service. So it has to be clearly spelt out such that there are no amendments( meaning reduction/ or increment on a particular service) for instance, say I enter into a partnership where am supposed to supply an eatery 70 cups of fruit smoothies for a week, if the agreement is to split this into 10 cups for each day. I may not under any circumstances decide to supply any quantity I wish randomly to meet the 79 cups for the week agreement. I have to, by agreement supply exactly 10 cups a day, nothing more nothing less.
- Getting out of the contract. Mostly you will find that partnerships in Nigeria do not have an ‘ out’ clause. While most contracts are made to avoid getting out of them, there should always be provision to negotiate an ‘out’ clause for poor performance or a lack of proper delivery or other lacking essentials in the business deal.
- Remedies. Also an important among the things to know before entering a business deal in Nigeria, you should make sure that the contract has a section dealing with remedies for defaults. Remedies are compensations to the injured party in a business deal for any such defaults. Damages in contract law are a legal remedy available for any breach of contract whatsoever in the partnership. This usually comes in the form of money to the injured partner. Remedies can sometimes can sometimes come in the form of a specific performance which is issued by the court that will require the faulting partner to complete any obligations according to the contractual terms of the business partnership
- Discuss future obstacles. When entering into any relationship whatsoever, it is very important to make sure that both parties’ goals match.
things to know before entering a business deal in Nigeria
Be prepared to discuss potentially uncomfortable topics. Talk to your partner. Discuss in detail the likelihood of future obstacles to the business’s success. Just like you wouldn’t want to marry someone after a couple of dates or without discussing things like having children, your religious beliefs, the number of kids you want in the marriage, your source of income, any health threats or the future e.t.c. The same rule applies for a business partnership. You should never enter into a business deal in Nigeria without first analyzing your common goals as a team, and what drives your partnership. Never enter into a business deal without discussing the values, the goals, and systems that will be critical to your shared success. Do not be fooled by the euphoria of implementing some great business idea through business partnership. Most potential partnerships and mergers are always exciting at the beginning which is good, but you shouldn’t lose focus on certain realities. Do not let the whole excitement cloud your better judgement. Obstacles may or may not present itself in the future. It is in your place to evaluate the likely prospects of maneuvering your business through it, but first you need to discuss with your potential partner, see eye to eye on how to cross that bridge when you land there.
- Do they have selling points you don’t have? Here’s another key consideration among the things to know before entering a business deal in Nigeria. What are your selling points? What are the other party’s selling point? What selling points does your potential have which you do not have? How can you marry these points to benefit your business partnership? Identify point people on each team. It is important that at the end of the day, your potential partner should have a compelling value proposition that you lack. Be specific and strategic about what skills you need that are lacking from your end. Whether it’s executive experience, selling skills, the cache of a big company name, or perhaps a partner with vast relevant contacts.
Startup consultant, George Deen advises, if you are laughing a new search engine and you have a Google engineer on your staff that will get a VCs attention. …the VCs will be impressed by your hiring skills (finding the best talent) and your sales skills (getting these proven winners to buy into your vision). This kind of team around the management table is exactly what the VCs want in order to ensure that your business is more than a ‘ one man show ‘ “ - How will your partner exemplify your brand? As you build your company’s identity in Nigeria, distill your products and services down to the essentials is one of the things to know before entering a business deal in Nigeria, make sure you think through on how your potential partner will personify and represent your brand. Experienced Advertising Executive and Assistant Professor at the Temple University School of Media and Communication, Stacey Harpster, advises, “… Ensuring that your new partner fully embraces your brand tenets, enforces your brand standards and consistently delivers on your brand promise his vital for your business’s success. A strong brand cannot exist unless the leadership is unified…in living the brand at all times”. An example of this could be, maybe having a potentially brilliant partner with a remarkable skill-set, who regardless behaves or appears disorganized and disheveled in front of clients. This definitely doesn’t speak well of you and your brand, and is a definite no – no as far as entering into a business partnership in Nigeria is concerned
You have to look out for a partner that can qualitatively exemplify your business’s standard without compromise, a partner who ‘lives’ your brand.
Aside from the possibility of your business partnership becoming highly successful, there is also the possibility of things going sour along the way. So hopefully these points will help inform any decisions you make as regarding entering into a business deal in Nigeria
Regards!
Read also: 7Things know Closing Business Deal Nigeria
(B.Agric, MBA)
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Serial Entrepreneur - International Business Planning Consultant - Speaker - Trainer - Author - Blogger - Network Marketing professional.
- 2018 SME Business Trainer and Coaching Advisor at GIZ for SME Loop.
- 2018 YALI RLC Online Cohort 9
- 2017 Fellow, Inspire Africa Train-the-Trainer Entrepreneurship programme sponsored by US Consulate Lagos and the Dickey Center, U.S.A.
- 2016 Fellow, Tony Elumelu Foundation Entrepreneurship Programme
- 2015 Top 50 Innovative Entrepreneurs, BET5 by Diamond Bank and EDC, PAU.
He is an alumnus of Enterprise Development Centre (EDC) of the Lagos Business School (LBS), Pan-Atlantic University (PAU). Through his training, mentoring, speaking and coaching programmes, he has empowered many young people over the years to start and grow their own business, build wealth, create multiple streams of income and achieve financial independence.
- He is a Certified Trainer in Design Thinking by the U.S Consulate, Lagos and the inspire Africa Entrepreneurship Institute.
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