CFO’s role in business negotiations:
1. Determine and document value propositions and risk-free alternatives
2. Set the baseline
3. Document the assumptions and how they could change
4. Establish the ‘what if’ scenarios, especially to determine what is ‘worse”
5. Review against a historical precedent for success
6. Determine how to mitigate risks (e.g. cost control, liquidity, etc.)
7. Determine the cost-effectiveness of the ‘what if’ scenarios
This should be the basis of the discussion
There will be many discussions within the negotiation, but, in reality, there are usually few actual discussions. The CFO role is to identify, clarify, and document the value that the business provides — how it makes their customers, and shareholders wealthier.
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