In recent weeks, Woolworths South Africa has been in the headlines for its relationships with key suppliers. On one hand, we’ve seen Beyers Chocolates attribute their collapse to that relationship, which quickly turned into a very public “David versus Goliath” narrative. On the other, Thirsti, led by Rob Hoatson, has spoken positively about a long-standing and constructive partnership with the same retailer.
I don’t have visibility into either of these specific relationships, and it’s always dangerous to draw conclusions from the outside. What it does highlight, though, is how the same type of commercial arrangement can produce very different outcomes depending on how it is structured, negotiated and managed over time.
That brings me to a broader point around contract negotiation, particularly for entrepreneurial and high-growth businesses.
Winning a contract with a large corporate is often seen as a milestone moment. It validates the product, unlocks scale, and in many cases, opens the door to further opportunities. For many founders, it represents the breakthrough they’ve been working towards for years.
The challenge is that the real risk doesn’t sit in winning the deal. It sits in the detail that follows.
Once you move beyond the headline and into the contract itself, the dynamics start to shift. Payment terms that look manageable at first glance can quickly create pressure on cash flow. Requirements around health, safety or compliance can necessitate upfront investment that hasn’t been fully budgeted for. Minimum order quantities can result in excess stock sitting on the balance sheet, tying up working capital. Fixed or pre-determined annual increases may sound reasonable in principle, but can become problematic when your own input costs don’t move in line.
Individually, none of these is unusual. Collectively, they can fundamentally change the economics of the deal.
This is where I often see a familiar pattern emerge. The founder, understandably excited about the opportunity, takes the view that “we’ll make it work”. There’s an assumption that volume will solve for everything, or that any pressure points can be managed along the way.
In reality, that approach tends to push risk further down the line rather than resolving it upfront.
By the time those risks begin to materialise, the business is already committed. The contract is signed, production has ramped up, and walking away is no longer a practical option. At that point, what looked like a growth opportunity can start to feel like a constraint.
When businesses reach this stage, the instinct is often to bring in legal support to revisit the agreement or tighten certain clauses. Legal expertise is critical, but it operates within a defined scope. A contract can be legally sound and still be commercially challenging.
What’s often missing from the process is deep financial and commercial experience at the point of negotiation.
Someone who has been through these conversations before. Someone who understands not just how to interpret the terms, but how they will play out over a 12- to 24-month period under different scenarios. Someone who can model the impact on cash flow, margins and working capital, and ask the uncomfortable questions before the business is locked in.
The reality is that many high-growth businesses don’t yet have that level of experience internally. Their finance teams have typically grown alongside the business, which means they are close to the numbers but may not have been exposed to more complex, high-stakes negotiations. That’s not a criticism, it’s simply a function of growth.
This is where a fractional CFO can play a meaningful role.
Bringing in an experienced CFO on a part-time or project basis allows the business to access that depth of experience without needing to commit to a full-time hire. More importantly, it introduces a different lens into the conversation. One that is less focused on winning the deal at all costs, and more focused on understanding whether the deal makes sense in its current form.
A good CFO won’t just review the contract. They will interrogate the assumptions behind it. They will look at how payment terms align with your cash conversion cycle, whether the required investment delivers an appropriate return, and how sensitive the model is to changes in volume, pricing or cost inputs.
They will also have the confidence to push back where needed. Not in a way that jeopardises the relationship, but in a way that ensures the business is not taking on disproportionate risk.
In many cases, that doesn’t mean walking away from the opportunity. It means reshaping it. Adjusting terms, phasing commitments or building in mechanisms that create a more balanced outcome for both parties.
For founders, that can be an uncomfortable shift. There is often a concern that pushing back will result in the deal falling through. In my experience, credible counterparties expect a level of commercial rigour. In fact, it often leads to more sustainable partnerships because both sides have a clearer understanding of what is required to make the relationship work.
If you’re running a high-growth business and you’ve been presented with a significant contract opportunity, it’s worth pausing before you sign. Not to slow momentum unnecessarily, but to ensure that the opportunity you’re stepping into is as strong as it appears on the surface.
Because in many instances, the difference between success and failure doesn’t come down to whether you won the contract. It comes down to how well it was negotiated in the first place.
Article written by Rowan De Klerk, CEO & Founder of The CFO Centre South Africa. Subscribe here to receive his insightful future editions.