People are always asking my advice when they are doing business deals. I came up with 10 suggestions you might keep in mind if you find yourself sitting down at the negotiating table. Hopefully they will be helpful to you.
1. Keep a photo of your wife and kids around. It reminds you what you are working for.
2. Go slow. If you are in a deal or building a kitchen, hurrying causes mistakes. Measure twice and cut once.
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3. Keep it simple. Avoid complications. Do deals that are clean and have a beginning and an end. It does not always have to be complex. If the deal can be simple, keep it simple.
4. Use common sense. Do what a reasonable person would do. Do not be convinced to do something that is not reasonable.
5. Be realistic. You live in the real world with real prices and real market conditions. You do not live in a world of depreciated values or projected values or fair market values. Things are worth what they are worth in the market, not what they should be worth or what they are worth on paper.
6. Money is the great equalizer. If you commit to pay money you are on the hook to pay as agreed. $10,000 or 100,000 may not seem like much when you are sitting at the table doing a deal, but when you put it in perspective it is a new car, tractor or vacation. These are all things you put off due to lack of funds, yet when you do a deal sitting at the table you spend money like water. Money that you would not spend in your personal life.
If you forget this, look at the family photo and think about that vacation you won't pay for and you will be willing to pay a fair price and not more.
7. Write it down and sign it. Later on you will forget -- or worse, the parties will have selective memory. Write it down to keep the facts of the deal straight.
8. Most of the time the other guy is out to get as much as he can and leave you with as little as he can. Remember the more he gets the less you get, which is the classic definition of a zero sum game.
9. Don't be too optimistic. Most business people are optimistic and that is why they keep going no matter what happens. However, when sitting at the table, do not be too optimistic because 60 percent of the time things do not turn out as we hope.
10. Be ready to walk away. This is the hardest for most people. It takes the most time to learn. Sometimes you have to say no to a deal. Figure out what your minimum is and if you do not get it, walk away from the table.
Phil is a member of AHRA, HFMA, AAMI and the Cryogenic Society of America. He has contributed to a number of magazines and journals and has addressed trade groups.
Phil's proudest achievement is that he has been happily married to his wife Barbara since 1989, who helped him found DOTmed in 1998.