John Burns

Thursday, 29 September 2005 12:50

Negotiating tricks

Business negotiations can be a lot like carnival rides. They usually begin like the merry-go-round, pretty straightforward, up and down, around and around, but really going nowhere. All of a sudden, conflicts and disputes arise, and negotiations quickly turn into a roller coaster with wild, breathtaking climbs and plunges, twists and turns. Now, the process becomes a bumper car, moving slowly, going in circles and getting unexpectedly slammed from all sides. Both parties may end the negotiation feeling sick to their stomachs — just like at the end of a day at an amusement park. The following best practice suggestions and tricks of the trade should help lead to more-successful, less-stressful business negotiations.

Become a better negotiator
 

  • Always call first; be prepared and set the agenda.

  • If you set the price first, you manage expectations and force the other side to play off your number. After that, never bid against yourself.

  • Always offer to have your counsel draft documents. This is a tremendous bargaining advantage. Again, the opposing side has to try and change your starting point.

  • Set high idealistic expectations; end up with a better deal.

  • Settle on realistic positions.

  • Be prepared for a pessimistic outcome; know your bottom line and deal breakers.

  • Constantly ask, “What do you mean by that?” “Why?” and “Why not?”

  • You have two ears and one mouth; listen more, talk less.

  • Listen for content and delivery.

  • Body language sometimes tells you everything.

  • Use silence. The power of a pause is amazing — people just start talking, usually to their detriment.

  • Power, money, time and necessity can create leverage.

  • Recognize that leverage is dynamic. Neither side will hold it the whole time.

  • When stuck, try adding two or more seemingly inconsistent needs together to get a solution that accommodates each of them.

  • Develop a positive rapport to gain respect, strength and trust.

  • Make a point, not an enemy.

  • Emotions have no part in a business negotiation. Do not show them. Do not react to them.

  • Never lie.

  • Do not expect others to act as you do.

  • If you say it long enough and often enough, people will believe it.

Tricks of the trade
You may be able to use some of these tricks to your advantage.

  • Splitting the difference. This is not always fair to both sides (you may have had a bad starting point or be facing a non-monetarily split-able issue). Do not offer to split it until the other side is willing to, otherwise they may demand another split.

  • Good guy, bad guy. There are no friends on the other side.

  • Red herring and sleeves of your vest. The other side may make a big deal out of a little issue, then concede as if it was material; or worse, grudgingly giving in on something that has no value.

  • Step negotiation and death by a thousand cuts. Every time you think the deal is done, another major issue is raised, or you continue to concede on a myriad of small issues until the sum is major.

  • Wiggle. When negotiations are completed, the other side wants one last new thing thrown in for free.

Using these tips should help you stay more balanced and keep your feet on the ground during the unpredictable adventure of business negotiations. Finally, buckle up and enjoy the ride!

Robert S. Burns is of counsel with Brouse McDowell. Reach him at (330) 535-5711 or rburns@brouse.com

Monday, 22 July 2002 09:38

A constant amid change

Since 1911, when my grandfather founded Central Ohio Welding, both our company and the economy have changed drastically. We've gone from the Industrial Age to the Information Age.

We also are moving from a family owned company to employee owned company by adopting an employee stock option plan (ESOP). The ESOP, implemented in 1998, now owns 15 percent of the company.

However, one thing that has remained consistent over the years is our commitment to our employees and employee training. We see our employees as our greatest resource and training and continuing education benefit us as well as them.

In 1996, we built, on-site, a modern learning center offering classes in blueprint reading, shop math and life leadership. Additionally, we offer on-the-job training for specific positions. Our in-house training department includes one full-time and three part-time trainers who oversee our internal training as well as our tuition reimbursement programs -- all of which help us retain current employees and recruit new ones.

Since 1997, we have become ISO 9002 certified, a process that ensures we have quality systems in place for manufacturing and management. The certification includes a training component, but has also helped us increase our on-time order delivery rate to nearly 95 percent, more than double the rate from 1992.

Employee training and education have also helped us as we've grown and expanded our product lines. In 1959, we became C.O.W. Industries Inc., with machining/fabricating and distribution divisions.

To help us retain our competitive edge, we've decided to expand our paint department and install a state-of-the-art, in-house, automated, $800,000-plus painting and finishing facility. To do that, we found a loan program specifically for purchasing equipment through Columbus Countywide Development Corp.

This program, the Ohio 166, requires a 10 percent down payment -- other financing would have required much more -- allowing us to preserve our working capital for other uses, including employee training and education programs. The City of Columbus Department of Trade and Development was so impressed with this project that it granted us a 5-year, 50 percent tax abatement.

We worked with Peggy Johnson, assistant vice president, and Roger Campbell, senior vice president, at KeyBank. The Ohio 166 program, administered through the Ohio Department of Development, requires borrowers to put down 10 percent, with the borrower's bank financing 50 percent and Columbus Countywide the remaining 40 percent. The Columbus Countywide portion is at an interest rate two-thirds of the prime rate, which lowered our expected payment.

Columbus Countywide also offers the Small Business Administration 504 loan program, designed for healthy, growing small businesses that need long term, fixed-rate financing to buy real estate or construct buildings, and other loan programs for small businesses with financing from $1,000 to $1 million.

Once this project is finished, we'll train some of our employees on how to use the equipment in our new paint shop. We also anticipate creating new positions, thanks to our low down payment and long-term, low fixed-rate loan through Columbus Countywide.

Since 1981, Columbus Countywide has helped more than 1,100 small businesses obtain financing and approved more than $190 million in loans, which have created more than 11,000 jobs and stimulated more than $500 million in new investments in the 13 counties it serves. For more information on Columbus Countywide's loan programs, visit www.ccdcorp.org or call 645-6171 in Franklin County or toll free at (888) 756-2232 from elsewhere.

John Burns is president of C.O.W. Industries Inc. in Columbus.