12 Mar The Deal

This jungle scar in business is a story about a business transaction which went awry and involved a close friend. Our entrepreneurial organisation was into commodities brokering in the late nineties and my partner and I had just been given a contract to supply sorghum to a large brewery. This contract came through this close friend who had contacts in the organisation. It was a great break as it meant a steady source of income on a weekly basis provided we could find the right supplier.

We dived into our contacts rolodex and spoke to all the grains suppliers we knew and eventually we found a seemingly reliable supplier who agreed to supply the grains and deliver to our customer’s site. We stood to make about 15% profit margin on each supply trip and we gave our friend a 5% commission on each transaction for helping us to get the contract. Our supplies commenced and deliveries went as scheduled and everyone was pleased. The brewery was particularly happy with the grains supplied and we made good profit margins.

Eventually the brewery on their volition tripled our contract and the business boomed. It was at this point that we noticed that our friend was not as available to us as he used to be and eventually we could not reach him altogether. Soon after this the brewery cancelled our supply contract for no reason and it was quite shocking since we felt we had done well. We took it in good faith and invited our grains supplier to the office so we could pay off his final invoices and end the transactions.

After our meeting with him we sought to escort him to the car and he declined. However we insisted and when we got to his car to our great surprise we saw our hitherto unavailable friend sitting in the supplier’s car waiting for him. Apparently they had come together and he was shocked to see us as he did not expect we would come down to the car. Up until that point we thought they had never met and our friend had many explanations about how he came to be in the car but it was clear to all that they were now hand in glove.

SWe let them go and after our investigations we learnt that our friend had sought out the supplier to know where the grains were coming from and had gone ahead to get the commodity contracts for himself. It was a hard blow to us but then that is the business jungle at its worst.