Biddeford Saco Chamber of Commerce

CHAMBER NEWSLETTER

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President’s Corner
Excerpt from: August 2007

WHEN A DEAL IS A DEAL,

PUT IT IN WRITING!

How important is a person’s word in business? Does a handshake on a business deal mean it’s a deal? Perhaps? But sometimes do you have to get it in writing to protect yourself?

A young man in his mid-twenties was introduced to one of his father’s old friends, the owner of a 12 store Army Navy Store chain. Subsequently, the two got together to make children’s wading pools for resale.

The young man’s part of the deal was to make the tubular wading pool frames. The father’s friend would supply the rubberized tanks for the tubular frames. They decided to make 10,000 units.

They shook hands on the deal. The young man went out and begged, borrowed and hocked all his assets to complete his end of the bargain. Production began even though all the start up monies was not yet gotten by him.

Several months later, the young man completed the wading pool frames at his small metal fabrication shop. He called his partner to let him know the good news. Now all that was remaining was to package the rubberized tanks with the frames.

To his astonishment, his partner told the young man he had decided not to supply the rubber tanks for the

for the deal. The partner unilaterally decided not to hold up his end of the bargain.

What could the young man do? He faced ruin. Possibly bankruptcy. Losing everything he had because of a verbal commitment on a handshake. All based on his father’s word that the Army Navy store owner was a man of integrity. Someone you could trust on a handshake. In the end, it didn’t mean a thing. All the good intentions seemed going down the drain. And the young man with it.

With only several weeks left before the sales season started on wading pools, he had to salvage this calamity.

He researched and phoned names of all the rubberized tank manufacturers in America. Most of them turned him down with statements like: “Too late.” No interest.” “Maybe if he contacted them sooner.” He finally located one company in Mid West U.S.A that was interested. He would have to bring the samples to their office before their board meeting on Friday.

It was 4 P.M. Wednesday. The young man loaded two packaged samples of the tubular wading pool frames into his car for the 700 mile trip. He drove all night. He arrived the next morning, to meet with the principals of that company.

They liked the package sample wading pool. But it was a last minute arrangement. Perhaps too late. Yet, they bought his story, it really impressed them. When asked how much the young man wanted for each unit, he asked twenty five cents over his actual material and labor costs. Lo and behold, he settled to their counter offer of ten cents. It was accepted.

The rest is history. He got the money to pay back what he had borrowed. But more important, his reputation was intact.

Most seasoned business people realize how important a written contact is between two parties in a business relationship. Good business judgment means you have to investigate not only a person’s reputation for integrity, but their ability to maintain financial responsibilities in the transactions. Each party must put up something to make the deal work. Whether money, labor, time or all three. That goes for any contact between two parties, friends or not. It has to be in writing, to protect both parties.

Yet, all those years since the young man gave his word, he still believes a man’s word is his bond. And a handshake is a deal clincher. Those are ethical principles he built his businesses on- trust and faith in the person you deal with in business. And he still does today.

But, you can’t go wrong by putting it in writing. Ask me, I was that young man, now grown up!

Bernard Featherman, President

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