James Schramko here. Today, I want to share with you an important thing you should have in your business agreements.
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So, I’m down in Melbourne at the moment. I went to meet some of the members of my community for a meetup, which was fantastic. And we’re talking about deals and contracts. Also, recently, I was speaking to Jay Abraham to record an episode of SuperFastBusiness, which you will be able to listen to soon. And in that episode, we were talking about when you put together contracts. At some point in the future, there may be a situation where the deal is no longer making sense for either of the parties.
The important thing to have in this situation is to have already considered how the deal will end. It’s kind of like if you go down a really steep mountain, you’ll see those little run-off roads, where if your brakes fail, you can head off into the run-off, and there’s sand and it will slow you down without you having to have an accident.
For the same reason, you don’t want to go into an agreement or a contract without the exit being spelled out clearly. So, Jay was saying one of the big challenges he had with a lot of the revenue share deals he put together was at some point, the customer wants to stop paying, and then he would offer them a buyout. And I mentioned to him that I always have that built into my contract from day one. And he said that’s a very good idea.
So make sure if you’re going into contracts or agreements, or any kind of partnership, that you spell out how this will end. If either party wants to stop it, what would be the agreement? Try and get it clear and simple upfront so that everyone knows where they stand. And then, of course, you’ve got your run-off ramp.
Hopefully, this is helpful for you. I’m curious what questions do you have around revenue share agreements or business deals? I’m interested to find out what they are because I can make a few more videos on this topic.
I’m James Schramko. This is SuperFastBusiness.com.