3 Tips for Structuring Agreements for Win-Win Outcomes  

It doesn’t matter what type of business environment you’re talking about. If you’re structuring an agreement, you must acknowledge that it will only happen due to a compromise between two or more parties.

There’s an old saying that reminds us how a compromise is supposed to be “a situation where everyone walks away unhappy.” This doesn’t mean that you’ve been able to successfully argue with another person to the point where you got everything you wanted. This means that you stated your case, your opposition stated theirs, and you successfully met in the middle in some capacity.

An agreement is all about cementing that in stone. If you want to improve your ability to create agreements that benefit everyone involved, there are several essential things you’ll need to keep in mind.

The Importance of Clear Communication

To structure agreements that guarantee a win-win outcome for everyone involved, all parties need to agree on what “success” truly means. People must be fully aware of their rights and obligations in the scenario. That is what clear communication is all about.

You’re trying to leave no room for misinterpretation in what follows. This is particularly pivotal in more complicated agreements involving multiple terms and conditions.

In other words, people aren’t just going to take your word for it; you’re looking out for their best interests and yours. They want to see it beyond the shadow of a doubt. That’s a big part of what a formal contract is designed to do, and before you even get to the point where one can be drawn up, you need to clearly communicate your intent and the desired outcome from the start.

Using Empathy to Your Advantage

Another crucial tip for structuring an agreement with win-win outcomes involves leaning into empathy wherever possible.

Take something like a wholesale real estate transaction, for example. Here, you’re structuring an agreement between three parties. You find a seller with a property you’ve identified as having high potential. You get them to agree to sell it for one price. Then, you find a buyer who can see the same potential that you do. You get them to buy it for a higher price. The difference between those two amounts is what you get to keep in terms of profit.

The only way you’ll be able to structure two successful agreements, let alone one, is if you practice empathy in all your interactions. Take the seller. What might be motivating them to sell the property? Why should they do it as part of a wholesale real estate agreement instead of doing it themselves? What problem are you helping them solve? What issue do they have that your mere existence is the solution to?

The more you understand where they’re coming from and why they’re doing what they’re doing, the easier it will be to structure an agreement where both parties come out ahead. Then, you turn around and handle your interactions with the prospective buyer from the same point of view.

Identify the Common Ground

Finally, one major long-term advice you should follow when structuring agreements involves looking for common ground whenever possible. It would be a mistake to look at whoever you are negotiating with as an opposing force. You’re not two parties on totally different teams. You’re two people trying to meet somewhere in the middle.

That in and of itself implies that there is a “middle” to begin with – meaning that you’re not starting nearly as distant as you might expect.

Before you even enter a negotiation and begin thinking about structuring an agreement, do your research. Look into someone’s background and see if your professional networks overlap. Find out if you have any shared interests. Are you part of the same professional organizations? Have you been to the same events? Absolutely anything can be a source of common ground, and so long as you have some kernel to start with, you can build from there.

If nothing else, this is all an exercise in reaffirming that you and the party you’re structuring an agreement with are not “adversaries.” To truly be successful, no outcome should generate a “winner” or a “loser.” Whatever the desired result is should be in both of your best interests. If you’re entering a situation where that doesn’t seem like it’s going to be the case, begin not with the outcome but with that common ground.

This can also help the other party practice empathy, as outlined above. This can put both of you in the mindset needed to structure the agreement, get all relevant documents signed, and move on to bigger and better things.

The Give and Take of Negotiations

Overall, when structuring agreements for win-win outcomes, you must also be prepared to get creative when the situation calls for it. Yes, it would help if you prioritized your interests. But you can’t do that at the expense of your flexibility.

Sometimes, your interests will change in real time as the agreement details are being hammered out. You may realize that your needs have evolved by the end of the discussion compared to when the negotiation started. That’s okay. It’s a lot more common than people realize.

What matters is that you agree with the tools and best practices outlined above. This is because an agreement is not a one-off experience. Hopefully, you’re creating a long-term relationship with someone that will continue to pay dividends for months or even years to come. That’s the mentality that most successful entrepreneurs and business leaders take. The sooner that you adopt it for yourself, the better off you will ultimately be.