Partnerships·
Small businesses say yes too easily. An approach arrives, it sounds like an opportunity, and turning it down feels like turning down growth.
Some of them should be turned down, and the reason is usually visible in the first email.
The ask that cannot be calculated
A partner once proposed that they take a share of the increase in our sales.
It sounds fair. It is also impossible to compute. An increase over what: last month, last year, the same month before we existed here? Attributed how, when a campaign, a new store and a season were all running at once? Measured for how long, and who holds the numbers?
Every one of those questions has a defensible answer and none of them has a single answer. That is the problem. Both sides will do the arithmetic honestly and arrive at different figures, and then someone has to be told they are wrong.
A term that cannot be computed is not a term. It is an argument with a delay built into it.
The test
Can each side work out the number alone, without asking the other, and land on the same figure?
If yes, it is terms. If no, it needs replacing before anything is signed, and the replacements are not exotic: a flat fee, a fee per event, a fixed number of units, or a share of orders that carry their own code or link, so the sale says where it came from.
Offering that swap is also a fair test of the other side. A partner who wanted a workable arrangement will take it. A partner who wanted an open-ended claim on your revenue will explain why measurement is unnecessary.
Two other structures worth refusing
Exclusivity, asked for early, before either side knows whether this works at all.
And a deal where you carry the cost, the stock and the staffing, and the other side takes a share of the upside for having brought none of it.
A partner who brings only a name is not the problem. A nonprofit lending its name and its people is often the most valuable thing in the arrangement. Pay for that with a fee agreed in advance. What goes wrong is paying for it out of a number nobody can calculate.
How to say no without losing the person
Not personally, and not by going quiet.
Name the reason as structural, because it usually is: we would not be able to agree on what the number was. Then say what you can do. Here is the version we could sign this week.
Most people are not offended by that. They proposed the only structure they knew.
The ability to walk away is what keeps terms reasonable
Every partnership you cannot afford to lose gets more expensive over time, and the other side can feel that in how you negotiate.
A no, given early and given plainly, costs one conversation. The deal that could not be counted costs a year, and usually the relationship as well.