Featured Coaching Training: 17 Steps For Effective Contract Negotiations
Are you having trouble with contract negotiations? In this episode learn the 17 steps to effective contract negotiations taught my the Small Business Administration's "Entrepreneur of the Year" Clay Clark.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Steps For Effective Contract Negotiations:: 3. Know Your Numbers
Ask Yourself:: What do you want out of the deal you are negotiating right now?
Lesson Nugget:: Make your deal a no-brainer so it is a win-win for both parties.
Lesson Nugget: : You must know that you know that you know what you want out of the deal.
Lesson Nugget: : Your deal must obviously be a win-win for both parties.
-Know your numbers. What do we mean by that?
-Well, you have to know what you want. And you have to know what makes sense for you to get it. So you have to know those numbers. Let me get into this. If you know your numbers, you just have to know at the end of the day, what do I want?
You ask yourself right now, what do I want? So when working with Mr. Kanbar and SKYY Vodka, I was thinking, I would like free office space in downtown Tulsa. Free office space. For free? Yeah, I wanted free office space.
Why did I want free office space? I wanted it because I was currently paying about $5,000 a month for office space, and I wanted free office space. In exchange for the marketing, the PR, the web development-- and so my thought is he was currently paying a certain amount. So he was currently paying, let's say, this amount. He's currently paying this amount.
And I thought, well if I come in here and say, you don't have to pay me. You just pay me commission only, and all you have to do for me is you have to give me this commission here, and you have to give me free space, which is currently vacant anyway. I thought that is a win-win. But I knew at the end of the day, when we finished talking, negotiating, marinating, going to the summit club, and have lots of gluten. We had a lot of bread. A lot of times we were negotiating and meet for a lot meals, a lot of salad.
I knew that at the end of the day that I wanted to have free office space. So you have to know what it is that you want. The other thing is, you have to know the dollars and cents. You have to know the math. You got to look at it and say, OK--
And again, these numbers aren't accurate. And because of just the confidential nature of certain deals, I'm not going to give you specifics on this. But I'm just trying to help with this example. But let's pretend-- and this isn't a real number-- but let's pretend.
That let's say that the other guys, in this case the Kanbar properties, let's say that they were spending $20,000 a month on PR, marketing, real estate. And let's say that the space I wanted would cost $5,000 a month, and then everything else I would do for free. Whatever the numbers were, I knew the numbers, and I knew that it was a no brainer. It was like-- I don't know.
Should we dramatically reduce all of our costs, and then give away free space? [UH] Makes sense. I wanted to have that kind of deal where it's a no brainer. Where you could be-- if your mind was just firing, and your synapses were just firing at a rate that was a tenth of the speed of a normal human brain.
And your mind was not very intelligent, not very evolved. And you could look at the deal and go, that makes sense. It's a no brainer. It's a win-win. So, back to you.
-Awesome. So step number 3, know your numbers. Not just what you want, but also the dollars and cents behind it.