Why A Sense Of Urgency Matters In Business Deals

Forbes

16-05-2025

By Richard D. Harroch and Dominique A. Harroch
As a longtime M&A attorney, entrepreneur, and venture capitalist with over 200 major deals under my belt, I have learned a lot of important lessons. One important business lesson is that time is one of the most critical factors in determining the success of any deal or transaction. The saying "time is the enemy of all deals" highlights a fundamental truth in business: the longer it takes to negotiate, the more likely it is that the deal will fall apart.
Prolonged negotiations can lead to various complications, including new offers, deal fatigue, or miscommunication, all of which can derail a business agreement that seemed promising at the start. It's essential to recognize that speed and decisiveness are often key factors in successfully closing deals.
A sense of urgency doesn't mean rushing haphazardly into decisions, but it does mean understanding the importance of acting quickly and efficiently. Deals that drag on are at risk of losing their value and relevance, and often, they never materialize. By establishing clear timelines and making timely decisions, businesses can ensure that they don't miss valuable opportunities, even as they remain flexible and thorough in their negotiations. This article, which uses research assistance and insights from AI, will explore why urgency is crucial in business and why a delay in closing deals can lead to missed opportunities and failed negotiations.
These lessons particularly apply to mergers and acquisitions, major financings, and joint ventures.
Time is often one of the most significant factors in a deal. When negotiations drag on too long, there's always a risk that a better deal may arise. Competitors may come in with more attractive offers, or external market conditions might shift, rendering the deal less appealing. In business, the longer you wait, the more likely another opportunity or competitor may catch the attention of the other party involved in the deal.
Key Insights:
As deals drag on, deal fatigue is a real risk. This can happen when one or both parties grow tired of the negotiation process, especially if it involves long discussions, legal hurdles, or repeated revisions. When deal fatigue sets in, both sides may begin to lose interest or enthusiasm, and even the most promising deal can fall apart due to frustration. This is why a sense of urgency is important—to keep everyone focused and ensure that the deal doesn't lose its momentum.
Key Insights:
Long negotiations can sometimes be a red flag. If the process is taking too long, it may signal that one party is difficult to deal with and that complexity could carry on post-deal. A lengthy negotiation process often raises questions about a partner's flexibility, willingness to compromise, and ability to meet deadlines. Such behavior might indicate that the relationship will be challenging after the deal is completed, making the agreement less desirable for the other side.
Key Insights:
As negotiations stretch out, the financial cost of legal fees, consultants, and other resources involved in drafting and reviewing agreements increases. While initial costs may seem manageable, the longer the deal takes, the higher the overall expenses become. Over time, these growing costs can make the deal feel less worthwhile. The expenses can become so significant that both parties may ultimately decide that the deal is no longer financially feasible.
Key Insights:
In many business negotiations, key decision-makers may change roles, departments, or even companies during the negotiation period. This personnel turnover can significantly disrupt the process, causing delays or even halting the deal. The loss of a crucial decision-maker can leave the deal in limbo, especially if the new decision-maker doesn't prioritize the deal or has a different approach. A sense of urgency helps ensure that the people who initiated the deal are the ones who finalize it.
Key Insights:
Long delays in negotiations can lead one party to conclude that the process is more trouble than it's worth. When negotiations drag on without resolution, a sense of frustration builds, and it's possible that one party will decide that the deal isn't worth pursuing anymore. Dealmakers may look at the slow pace of negotiations as a sign of indecision or lack of urgency on the other party's part, and as a result, they may walk away from the table. In these cases, the deal is often abandoned, and both parties miss out on potential value.
To help close a deal quickly and efficiently, consider these actionable tips:
The ability to close deals swiftly is an essential skill in business, and the longer a deal takes, the greater the risks. Prolonged negotiations lead to missed opportunities, rising costs, deal fatigue, and sometimes even the total abandonment of an agreement. A sense of urgency keeps everyone focused, minimizes unnecessary delays, and increases the likelihood of closing deals successfully. Speed doesn't mean rushing— it's about maintaining momentum, keeping everyone engaged, and finalizing the deal while the opportunity is still valuable.
Ultimately, urgency is key to a successful business deal. By setting clear timelines, staying engaged, and moving quickly to address issues, businesses can minimize the negative impacts of delays. Whether you're negotiating a sale, a partnership, or a merger, time is a crucial factor in securing the deal and achieving the desired outcome.
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Copyright (c) by Richard D. Harroch. All Rights Reserved.