Vic and Suzette Brounsuzian
"The most important lesson I've learned is never to conduct big-money business without a contract," says Vic Brounsuzian, 45, who, with his wife, Suzette, runs a shop in Streamwood, Illinois, selling dry-roasted nuts and other edible treats.
A few months back, Vic found a client who was interested in purchasing a large bulk of his store's nuts each year. All went well for several weeks, then everything suddenly changed.
"The staff of a riverboat casino loved our product and wanted to purchase it from us every week for at least a year," Vic explains. "I gave them one hell of a deal, which would save them about $5,000 annually, compared to what they'd been paying their previous supplier. After selling them huge amounts of my product for several weeks, I checked with them to make sure they were planning to continue buying from me. Although we didn't have a contract, the casino's purchasing director was quite encouraging."
As a result of that conversation, Vic decided to make a bulk purchase of nuts from his supplier, which should have saved his business some money. Instead, the move resulted in long-term financial chaos. "I spent an outrageous amount of money to get a one-month's supply of nuts for that casino, and the next day I waited for their purchase order to arrive," Vic states. "It never showed up. When I called to find out what had happened, the purchasing director told me that the casino's old supplier had lowered his price to match mine, so the supplier ended up saving the account. As a result, the casino was not going to be purchasing any more nuts from me."
Vic told the purchasing director about the large purchase of nuts he'd just made, and explained how badly the man would be endangering his business's financial situation if he failed to keep his word. His remarks fell on deaf ears. "Naturally, that giant purchase hurt my business, because I couldn't sell all those nuts in one month otherwise, and I couldn't afford to pay my supplier everything I owed," Vic says. "Our debt just grew and grew."
Although it took several months for the Brounsuzians' business finances to rebound from the setback, Vic says he learned a valuable lesson. "Because of that eye-opening experience, our shop will never again enter a business arrangement without a formal contract," he explains. "I'd rather spend $300 to have our attorney draw up a special contract than risk losing $10,000 by not having one."