Category E · Execution · Scenario 9
A Deal Slips or Fails
A major deal you were counting on has been delayed or has fallen over. Plans, hiring, spending or borrowing may have been built around it. The priority is to remove the deal from your forecast and see what the business looks like without it.
Trigger
A planned acquisition, sale, investment or major agreement fails to complete.
First move
Reforecast without the transaction and revise commitments and priorities that depended on it.
Immediate first response
Rebuild your forecast assuming the deal does not happen, and list every decision that relied on it.
First 24 hours
- Remove the deal from the cash forecast and budget
- List commitments made in anticipation (hires, spending, orders)
- Brief key stakeholders with the facts
Next 7 days
- Pause or reverse commitments that depended on the deal
- Calculate costs already incurred (advisers, due diligence)
- Decide whether to pursue, renegotiate or walk away
- Talk to lenders if facilities were linked to the deal
Next 30 days
- Reset strategic priorities and the budget
- Communicate the revised plan to staff and stakeholders
- Capture lessons learned for future transactions
- Only re-include the deal once it is genuinely certain
Typical causes
- Due diligence uncovering issues
- Funding falling through for one party
- Disagreement over price or terms
- Regulatory or consent delays
- Changed market conditions
Early warning signs
- Milestones slipping repeatedly
- Counterparty becoming slow to respond
- New conditions or renegotiation requests
- Advisers raising concerns
Trigger indicators
- Completion date moves more than once
- A key condition remains unsatisfied close to the deadline
- Counterparty requests a material change in price or terms
Financial implications
- Expected cash inflows or growth may not arrive
- Transaction costs are often unrecoverable
- Committed spending may leave a cash gap
- Lending linked to the deal may be withdrawn
Questions management should ask
- What does our forecast look like without the deal?
- Which commitments depended on it, and can they be reversed?
- How much have we already spent?
- Is the deal still worth pursuing at different terms?
- Who needs to know, and when?
Common mistakes
- Keeping the deal in the forecast out of optimism
- Continuing to spend in anticipation
- Chasing the deal at any price
- Not communicating with staff and lenders