Free Biz Dev Guys

In another sign of the times, a friend of mine has just emailed me about an organization called Contracts Inc. The principals of Contracts Inc. were formerly the business development team from Military Advantage where they spent their days negotiating contracts. Now it is their mission to renegotiate the deals that others have cut. The guys at Contracts Inc. are so convinced that they can save you money by renegotiating your commercial relationships that they are paid strictly on a contingency basis -- they receive a portion of the money they save you from the restructuring of your contracts (which they say has historically been between 20% and 50% of the overall cost of the contract).

I have no doubt that Contracts Inc. can save some companies a great deal of money. A number of our portfolio companies have been very successful at renegotiating relationships that didn't make sense in the realities of our present economy. Unfortunately, one of the strongest leverage points a company has for renegotiating critical and costly relationships is their imminent demise. When faced with the choice of being paid something for some unknown period of time or nothing after a specified period of time (when the company goes bankrupt), most third parties will renegotiate in hopes of getting something for a long period of time.

In this economy, however, you don't need to be going bankrupt to renegotiate a deal. Startups face so many great options these days for things like web hosting providers, equipment lessors, landlords, etc., they are often able to renegotiate their contracts using the potential of moving to some other service provider as a leverage point (even if they are contractually bound for some time to come). So for those companies that don't have the bandwidth to renegotiate their commercial relationships themselves, Contracts Inc. may be a great no cost option.