Is your business seeking to collaborate with others but is unsure how to go about it? Are you unsure of the options, legal jargon and financial terms of engagement? Here's the classic process to unblocking this log jam.

Business relationships involve deals, deal making, business models and contracts. How do these concepts differ? How do you select the best option for a particular situation?

This post illustrates our specialisation in helping clients define their business relationships. It's part of doing business and more broadly, business structuring and enterprise structuring.

The answer is to focus on the process connected with each of these concepts. Improve your process skills and this will speed your path to become a professional at  the process of deal making, contracting and business model development.

It's worth it. Development of new business models, and contracts to support them, is at the evolutionary edge of business. It's a sweet spot for innovation in deals and contracts that lead to dollars or other things of value.

So here's the process, which also indicates the differences and relationship between the concepts we've mentioned. 

• There are an unlimited numbers of business models. New ones are being invented all the time.
• We only have a proper understanding of a business model when it is defined and detailed. Contracts can and should do this. Each properly prepared contract incorporates one or more business models.
• So how do you define and detail a business model, for example in a contract? As an overview, the  classic procedure is as follows:
• Define the deal points between the prospective contractual parties - this is best done before full face to face negotiations begin. Carefully review the numerous variables.
• Record the deal points in writing as each point becomes clear. If necessary, when you have  clarity regarding some and hopefully most of the points, prepare a deal points email or letter communicating your understanding with the other negotiating parties. If more formality is appropriate you can prepare a heads of agreement, memorandum of understanding or other pre-contract document to define and detail the deal.
• Consider using a contract to move ahead. To speed up contract drafting, most lawyers will first seek to locate a template contract which most closely matches the deal points. If not available we all draft from scratch.
• Keep customising the deal points and all facts relevant to the situation. Sign a contract or settle on the now clarified and defined non-contractual arrangement or understanding.