STRATEGY
What to do when a deal falls through
I
t has taken Jane Lowther
easier route of handing the
though the experience she
six years to finally tell her
contract to another supplier.
went through has left its mark.
story. The small business
The fall out of the experience When she asks herself what
owner from Old Basing
had further, unexpected
she would do differently she
watched almost helplessly
consequences. Other potential
says, “Now I never discuss
as Royal Bank of Scotland
customers that Jane was in
contracts with anyone, and
helped to drive her business
negotiations with at the time
I don’t accept work or sign
to bankruptcy in 2008. Jane,
incorrectly assumed that she
any exclusivity clauses
a concierge services expert,
had lost the contract due to
unless a client is pr epared
was asked by Royal Bank of
failure to fulfil, which caused
to pay upfront. My advice
Scotland to work with it to
them to lose confidence, and
to other businesses in my
create a new service to add
she consequently lost her
situation is to get everything
to its Tesco Finest Home
credibility in the marketplace.
in writing, document all
Insurance, which she formally
Despite the catastrophic
important conversations,
accepted. Jane worked closely
events, Jane started the long
and email a copy to the other
with RBS in the ensuing eight
slog back to credibility. What
company. Most importantly,
months to develop the
don’t count on any
service for them.
money until it is in your
The £3 million
bank account.”
contract and project was
The entrepreneur has
due to launch in March
some lessons to share
2008. It required Jane
with others to help them
When small business
to recruit new staff and
avoid ending up in a
locate to new offices,
similar situation too,
owner, Jane Lowther
which she was more than
namely making sure
struck a £3 million deal
happy to do for such a
that your don’t take on
with RBS six years ago,
lucrative deal. She took
any unnecessary costs.
out a small business
“The biggest changes I
she thought it would be the
mortgage through RBS
made after this traumatic
start of something fantastic.
to cover these costs,
experience to my
Little did she know it would
and all was fine for a
business model involved
while. However, just two
changing the structure
leave her business on the
weeks before launch,
of the back office. All
brink of disaster
RBS unexpectedly
my team are now home
broke the contractual
based, and I just keep
a desk at my husband’s
agreement and
office so I have an
withdrew all funding.
official office address.
Jane subsequently had
Everything is pared
to let the new staff go
down to the best possible
and was left with a
cost. You don’t need
second mortgage that
fancy offices, just enough to do
she could no longer afford. To
helped Jane the most to rebuild
the job at hand, “ she explained.
her dismay, two weeks later
her reputation was being
Her story is a lesson to
Jane found the very training
present at external events.
all entrepreneurs and small
manuals that she had built for
When Jane’s business went
business owners to be careful
Tesco Finest insurance had
bust, people had more trust
who you get into bed with,
been launched.
in banks to do the right thing,
and to make sure that your
It wasn’t until 2013 that
and so, to many people, what
business is set up correctly
she found out what had really
they had done just didn’t seem
to deal with any possible
happened. During a networking to fit with their perception
disasters. As it is easy to get
event, Jane met the former
of banks. However, when the
excited by promises of large
sales director of TenUK, who
credit crunch hit, it became
contracts, Jane leaves one final
said that the contract had
clear how irresponsible some
warning; “Don’t agree any
come to them out of the blue.
banks had become, and the
extra costs unless you totally
It was Jane’s contract that he
public perception changed.
sure that you can pay for them
was offered, without having
People were much more
and they are essential to the
to tender for the business.
understanding about what had
business. If payment falls
RBS would have apparently
happened, which helped her
through for any reason, it can
overlooked adding Jane to their shake off some of the negative
supplier’s database, which
perceptions about her business. be the death knell for your
company, whether it was your
would have taken a lot of work.
Today she can reflect on the
fault or not.”
This is why they wanted the
events with a little more ease,
SECTION SPONSOR
STRATEGY_TB36_Bankonit.indd 55
Simplify the Law
TM
Other
customers
that Jane
was in
negotiations
with,
incorrectly
assumed that
she had lost
the contract
due to failure
to fulfil,
which caused
them to lose
confidence
talkbusinessmagazine.co.uk 55
Do without lawyers
29/08/2014 16:32