Deal fatigue is exactly what it sounds like: negative feelings around a transaction that, in the worst case, can lead to the deal blowing up or not happening. While deal fatigue isn’t always preventable, it is easily treated. We’ve included a few warning signs and corresponding treatments in this article to help you deal with a case of deal fatigue.
Causes of Deal Fatigue
Deal fatigue is most often caused by time delays:
- Communication is poor or inconsistent: parties and counterparties do not have a consistent rhythm or tempo in responding to queries
- Deal points get renegotiated: some parties use the preparation of final legal documents as a time to renegotiate terms of the deal
- No support staff: neither buyer nor seller have access to a subject matter expert to help them through a particular aspect of the transaction
- Complex deal structure causes a “hurry up and wait” effect
These challenges lead to buyers and sellers feeling frustrated, hopeless, and at times, angry.
Solutions for Deal Fatigue
Remember when you are feeling frustrated to take a moment and remind yourself why you are going through this transaction in the first place. Whether you’re a buyer or a seller, whether this is your first transaction or one of many, it helps to remember that very rarely do business sales go off without any hitches whatsoever.
If you’re still feeling frustrated, call your broker. We’re here to be that sounding board and to hear all your frustrations. But when you’ve finished venting, we’re going to focus on solutions.
- To combat poor communication, set up regular updates to let everyone know what the status of the current work is and what upcoming milestones there are. Be responsive when it’s your turn to deal with a task or query.
- To avoid misunderstandings in communication, don’t overly rely on email. Remember that some things are better said by telephone or video call or in person and a lot more can get accomplished during those types of meetings. Email has its uses, but speed is not one of its virtues when working on a challenging part of the deal.
- To be better prepared for anything that might come up, have your due diligence paperwork ready (if you’re a seller) and have your dream team (accountant, lawyer, tax advisor) ready (if you’re a buyer) to evaluate paperwork and give advice.
- To stave off renegotiation attempts, remind the counterparty of the LOI. That was the time for negotiation. Unless diligence has revealed something substantially at odds with the assumptions in the LOI, there shouldn’t be extra time spent at the end of the deal renegotiating what was agreed at the beginning of it.
One of the ways we as brokers prepare our clients at the start of the process is by reminding them that this isn’t our first rodeo and that we’ve had to deal with deal fatigue ourselves at times. But as long as you follow a process set around reasonable expectations with parties acting in good faith, you can get to the finish line, even with a bit of deal fatigue. If you don’t deal with deal fatigue when you spot it, the likeliest outcome is the deal dying before closing.
Want to prepare for a transaction with minimum deal fatigue? The Apex team is here to help. Reach out today.