The art of the deal

One of my sisters was struggling with her slow computer. As it was a nine-year-old machine, the IT tech encouraged her to buy a new one. She took his recommendations and promise to set it up for her and have it ready to use by the next day. Nice! Then, the unsolicited advice started.  

“How much did you pay? You got ripped off.”  

“It’s not too late to take it back. I can get a much better deal for you.”  

“You could’ve ordered that online. It’s really easy to transfer your programs.”   

As she shared her experience, my sister told me, “I’m not interested in what other people think of my decision. I’m happy with my computer. Spending the least amount of money wasn’t my primary concern. I wanted a fast, new one with no hassle.”  

And, that brings us to the art of the deal. What makes a great deal? When do you press and when do you acquiesce? Knowing a little bit about negotiating can help build your confidence and make it easier to get good deals done.  

What are the most popular kinds of deals? Here's a list,  from mild to wild:

  • Vehicle and equipment purchases
  • Subcontracts
  • Hiring and salary agreements
  • Acquisitions
  • Selling your company

You get the idea. Any time you and someone else meet to work out the what, how and how much, you are crafting the art of the deal. The following is what I’ve learned from a long career filled with negotiations.  

One of my sisters was struggling with her slow computer. As it was a nine-year-old machine, the IT tech encouraged her to buy a new one. She took his recommendations and promise to set it up for her and have it ready to use by the next day. Nice! Then, the unsolicited advice started.  

“How much did you pay? You got ripped off.”  

“It’s not too late to take it back. I can get a much better deal for you.”  

open and transparent in your dealings. Be kind, loving and communicative. Aim for a win-win deal, just like you would with a stranger.  

The third party problem

I know there is a third party problem if I am working through an agreement, and a good relationship starts to sour. I’ll confront this by saying, “We have been communicating well and putting a good deal together. Today, there is new information on the table, and questions about points we have already nailed down. Is there a new voice in this negotiation? Is there someone else who needs to be at this meeting?”

Best to move fast to uncover the third party.  

Often this orbiting, gravitational planet is a wife or a partner, or a friend or business associate. With every negotiation, make sure that all decision makers are at the bargaining table. Work out the deal points and then consult with your lawyer and accountant to review the risks and benefits of the deal. Be careful that the legal or accounting pros don’t become problematic third parties. The safest move is to not sign on the line, so well-meaning professionals can blow up good deals.    

We’re too old to remember

So, write everything down. You can keep a Trello board, or handwritten notes. You can document your conversations in emails. When you have everything worked out, clean up the notes, and have each party sign it as a show of good faith. Then, have the lawyers make it official.  

Breaches of the contract should be documented. Use video and pictures. Don’t let things fester or your emotions spin out of control. Most contract violations are innocent enough. Schedule a meeting — face-to-face is best for problem solving. Then, refer back to the documentation to get everyone back on the same page.    

Figure a way out

As my partner and mentor Al Levi says, “Know the way out before you go in.”  

Have a buy/sell agreement in place. Secure Key Man insurance. Assume that something could happen that could cause someone to head for the door. Make sure you have the exits labeled. Yes, you can include penalties for early exit. Just remember that stuff happens. Which brings me to the next point.

Be willing to walk away

There is no contract so good that you can’t get burned. If someone wants to do you harm, they can. And how much money are you willing to spend to get what you believe is yours? If something about the deal, or the dealer, seems wrong, don’t sign the agreement. 

Even with the best intentions on both sides, a deal can go astray. You can get so invested in the deal that you stick with it too long. You compromise a few too many times. Circle back to what you and the other parties really need and want from the deal. If you can’t get there, let it go. You may revisit the deal a few months down the road, once the blood cools. Or, find another way.  

Don’t be a jerk 

There is no prize in life for being a bully. At least no prize worth having. Understand that if someone feels like you put the screws to him or her, they may get it back … one way or another.

For example, you may have some good financial reasons for decreasing Susie’s pay by 10 percent. But, if Susie feels that the scales of justice are out of balance, she will get what she thinks she deserves. She may pad her time card, or take office supplies.  I’m not saying that’s right. I’m just saying I’ve seen it over and over. Take a little extra time to make sure that everyone at the table is satisfied with the deal. If that means you give a little bit more, so be it. 

Is getting the very lowest price your most important deal point? As a contractor, consider the karmic repercussions of taking that cutthroat approach. You get what you give in this world. If you beat up the people you negotiate with, you are asking for people to challenge your prices. Just sayin’.  

It’s worth it

Without negotiation you are destined to walk a lonesome road. It’s worth the time, energy and occasional bruise to engage in the art of the deal.
 As Zig Ziglar said, “You can get everything in life you want if you will just help enough other people get what they want.” 

Ellen Rohr provides “in the trenches” insight that business owners can relate to. Comments? Questions? A different view? Reach her at 417-753-1111 or contact@ellenrohr.com.You can also join the Bare Bones Biz community, at www.ellenrohr.com, for free tips, problem-solving webinars, money-making tools and lots of love.

Category: 
Content Type: