Deal-making for business owners

We've been hearing a lot about the art of the deal lately. For many business owners, making deals is less about thinking HUGE and more about getting deals done right, not that the two are mutually exclusive.

So how can you get your deals done, and done right?

-Some people believe that business deals are a zero-sum game, with a winner and a loser. If you will be working with the other party after the deal, or if you may want additional deals with the same party in the future, OR if you may want to make deals with other people in the party's circles of influence, the win-win deal works better. Period. Business expert Stephen Covey agreed.

-You can make deals only with the decision-maker. If the decision–maker isn't at the proverbial table, you are wasting your time.

-Know who has the power in a deal. Who needs this most? If it isn't you, find ways to assure you are not desperate – or at the very least, that you do not appear so. Here's a fun article on the topic.

-Don't bury important issues just to get (an inferior) deal done. Get them out in the open and get your important questions answered.

-Know what issues are negotiable and what ones are not – on both sides.

-Learn to read subtle signals during negotiations. Here's a good Entrepreneur article on that topic.

-If a deal feels bad while you are making it, it's probably even worse than you think. Apply a multiplier to that gut feeling.

-Unless you are getting married, most deals shouldn't have "forever" or even very long-term clauses. Situations change, and escape hatches or exit plans can be valuable when they do.

-Deadlines can be advantageous. Urgency of real need helps get deals done.

-Aside from deadlines, many deals have organic shelf lives. When stale or stuck, they really aren't happening. Know when to stop chasing a deal.

-Also know when to keep lightly in touch, because some good deals come back to life when you least expect it.

-Negotiating, at its best, is the art of coming to an agreement, not conquering an opponent.

-Not good at negotiating? Attend a seminar or webinar (there are many) or read a negotiation book.

As in all matters, model your negotiation skills after people you admire, not only for their ability to make advantageous deals, but for their overall reputations and ethics as well. This article was originally published in Succeeding in Small Business.

Image © 2004 van Schouwen Associates, LLC, by Stephen van Schouwen.

 

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Worst practices in business: Who DOES that?

You’ve heard of business best practices, of course. They are the subject of books, articles and seminars nearly every day.

Far less often do people talk about the all-too-common everyday worst practices that can annoy your customers and vendors, slow your progress, squander your opportunities, and eventually, lead to serious harm or failure for your small business. You may have experienced many of these either from the customer or vendor side.

But who on earth would routinely behave in ways that could have such a negative impact on their business’ short- and long-term well-being? In fact, these everyday “worst practices” are surprisingly common:

• Fail to provide project or delivery updates when your customer requests them

• Turn in projects late or incomplete

• Over-promise, then under-deliver – and deliver when it’s too late for the customer to request changes

• Cut corners in quality and refuse to make good when requested to do so (or at best make good reluctantly)

• Don’t return phone calls or respond to emails from business associates in a timely manner

• Don’t show up when you say you will; make them wait

• Forget you asked for a meeting at your office, and be out at another meeting when your guests arrive

• Take the attitude that if they want your business, vendors should be available to answer your calls 24/7, holidays, weekends and late nights included

• Argue about price, even if the price you’ve been given seems fair (you can always save a little more, right?)

• Demand that vendors rush to do your work – every time

• Then, don’t pay the vendors for a long time – and make them inquire repeatedly about payment

• Lose your vendors’ invoices – every time, if possible

• Refuse to track your time, expenses, sales, and work product, and then blame everyone around you for poor profits

• Insist that you’ve “always done it this way”

• Think of business as a “zero-sum-game” – one person wins and the other must lose

• Assume that everybody else does business just the way that you do, and that you can go on this way indefinitely

In fact, you can get away with some of this for some period of time. One day, however, your customers may wander away, your vendors fail to jump to attention, your employees bail, and your profits vanish.

Before that happens, if you have an inkling that some of this sounds just a little like you, keep this list handy, and cross off each behavior as you eliminate it from your own everyday practices.

 

This holiday, let's change our world.

There are few people in the United States whose past several days have been purely festive, contented or even merely productive. The tragedy of Sandy Hook Elementary School has shaken the nation, and in nearly every home, office, school, mall, and playground, this holiday season has been marked by a terrible sadness.

Perhaps the one thing we as a people can take from Newtown, Connecticut is that something needs to change. In fact, a number of things need to change. Because while this tragedy shook the nation, it is not the first of its kind, and it was the result of many cultural factors that we see all around us every day. American gun culture, violent and cruel video games, still-prevalent bullying in schools, mediocre access to mental health care and the tone and content of media coverage for events such as this are among the topics we need to study as we work to change - IF we work to change. The answers won't be easy, but surely we can do better than we are doing now.

This isn't just an issue for politicians. Business plays a part in deciding what products we develop and market to adults and kids. The public plays a part in not losing interest or focus on this issue two weeks or two months from now. Students play a part in not bullying and tormenting other kids, parents in reconsidering what kinds of video games their kids play - and what they learn about guns and violence. And, yes, our political leaders need to demonstrate sustained courage and wisdom.

May we all do our part. That would be the best way to make this marred 2012 holiday season worthwhile, and to honor all the people impacted by the tragedy at Newtown. Wishing you peace and love during the holidays and beyond.

Google and go: Information demands innovation

[caption id="attachment_1275" align="alignleft" width="120" caption="Has CERN detected a particle traveling faster than light speed? If so, it could change the world."][/caption]

A client commented wryly the other day that the Web as an informational resource is a mixed blessing. Like many other technologies, light-speed access to information has accelerated the pace of business and, much like the evolution from from courier to FedEx to fax to email and beyond, has created higher expectations all around. Ready access to information has made thorough competitive research easier... in fact, it has also made it imperative. This is how a new opportunity transforms into a baseline expectation. Everyone has the same opportunity and so doing business becomes more demanding than it was in more blissfully ignorant times.

Twenty six long years ago, when van Schouwen Associates opened its doors, competitive research (especially for smaller to mid-sized client firms whose budgets had their limits!) was typically a drawn-out and inefficient affair, depending variously on resources such as customers with opinions, loose-lipped sales reps and slyly procured sales literature and price lists. Information was often scanty and in some cases dated or seriously imprecise. But oddly, life was easier because the bar was set lower. We didn't intend that; we weren't lazy. It was just the way things worked.


The challenge today is that, with the exception of not-yet-released products that have been developed with dedicated attention to secrecy, it is possible to find out a great deal about other peoples' products and services, marketing messages, pricing, and the strengths and weaknesses of any competitor's offerings. It is often easy to reverse-engineer technical products. Why? In part because it's all on the Web.

Well, nearly all of "it" is on the Web. A frequent discussion the van Schouwen Associates team has with its clients involves what to include and what not to include in that very public forum. There are several layers of potential privacy clients can employ, including:

No privacy: Placing material out in the public arena online

Moderate privacy with potential for leakage: Offering material protected by passwords (often permission-based passwords with expiration dates and renewal requirements)... plus additional layers of security

Higher privacy but not perfectly secure, just ask Congress how leaks happen: Material that isn't put online anywhere, period.

Today, companies typically have (or should have) vast information about their competitors and their market opportunities. This is excellent.

Vast knowledge (or access to same) has also made business all the more challenging even as it presents clear new opportunities.

At vSA, we (and of course, our clients) know – more than ever before – exactly how high the bar has been set. So does anyone else who cares to look.

Result 1: Increasingly, products developed with insufficient regard to what is already on the market FAIL where once they might have succeeded. Less competitive services do the same because the customer's process of finding a better deal – the best deal – is pretty easy. Just Google and go.

Result 2: We expect that this universal access to competitive information will continue to yield impressive improvement in business innovation. Innovators and marketers have to work harder... and harder... and smarter.

"My boss says we're being bought up by a European company and nobody is supposed to know."

Social media can be an excellent marketing tool for your company. It's also a venue in which your employees are spending a lot of time, and every so often, someone makes a comment such as, "We deliver cold pizzas every Saturday night because it's just too flippin' busy" or "Rumor has it my boss is leaving the company - but he doesn't know it yet." Also every so often, an employee lets the competition know, in no uncertain terms, that they "stink" - or worse.

If you haven't established a clear, written social media policy for your company, you can call your employees to task when and if you catch these indiscretions, but the responsibility for any damage done lies also with your firm.

Just as your company has, ideally, established standards for brand use, for dealing with the press, for giving (or not giving) employment references, for use of company computer systems and more, you must also establish standards for employees' use of social media as it impacts your company.

Certainly, standards include the basics: don't talk online about confidential company matters, don't reveal new products, don't discuss litigation, don't harass or badmouth management or coworkers, don't flame the competition – but there are many other considerations as well.

As a firm that has long been involved in supporting clients in developing and managing their messaging, vSA knows that the power of social media can be used for good or harm - even inadvertently. ("Facebook, are you a good witch or a bad witch?") We work with clients to help assure everyone at their companies with access to a keyboard knows what's okay and what's not in terms of promulgating company-related information that could pop up on Google for years to come. We'll share more on this topic in upcoming blog posts, and are available to consult with clients regarding both their focused use of social media and risk management techniques.

Important tactics garnered from unimpressive sources.

What if I told you I'd learned an important business lesson from The Sopranos? (It doesn't involve "justice", don't worry.) And another from The Simpsons?

I contend that it goes to show not only that the Thomas Carlyle quote, "Every man is my superior in that I may learn from him" may still hold water but that it can extend to popular TV shows, old movies, your mother-in-law and so on.

Here are two offbeat tidbits I've picked up along the way.

Tony Soprano's therapist, Dr. Jennifer Melfi, counseled Tony as he was losing "cred" with his guys: "People only see what you show them." For a manager, an entrepreneur, or a person on an important sales call, this is good stuff. Display your best attributes, focus on making a good impression, and leave your insecurities in the car with your MacDonald's wrappers. Remember that not everyone needs to know all the baggage you have stored here and there.

In a fantasy Simpsons episode in which Homer believes he's sold a company to Bill Gates, the alleged Gates takes over by invading Homer's office with a bunch of thugs, wrecking the place and kicking Homer out. "Gates" explains by proclaiming, "Oh, I didn't get rich by writing a lot of checks!" So true. Forget the old "you have to spend money to make money." Actually, you have to MAKE money to make money. (Skip using the thugs, though, if you will.)

So think again the next time you speculate that a sporty new Jaguar will sort of magically-actually make you richer rather than just making you LOOK richer.

(Ohoh, but going back to the Sopranos, couldn't that be a good thing?) With that, I'll retreat and argue with myself a little.

Happy summer, and promises for a weightier entry the next time. And please share any wisdom you've picked up from unimpressive sources!

How to be smarter than an antelope, part one.

No offense to antelopes, lemmings, elephants or other herd animals. But they do things that we humans should avoid. Like stampede. And swiftly follow their leader when said leader is afraid. (As humans, it may have occurred to us as of late that sometimes our leaders aren't ... oh, shall we say... infallible?)

Watching a news segment about herd mentality on CBS yesterday, I learned the following. "We are mammals, just like the wildebeest in the plains of the African Savannah," asserted Andrew Lo, who studies emotions and economics at MIT. Huh, okay.

But then it gets interesting. Apparently, we turn to our mammalian brains (the autopilot stampeding impulse part) when things get rough, and Lo postulates that we have little choice. We react to fear like animals do, kinda. Fight, flight, panic. All that good stuff.

I don't like it.

Let's take a hypothetical (cough, cough) example. A client just skidded to a halt on a useful marketing project this morning, and did so for one reason only. It looks like time for a slowdown. So they will cut their outreach to customers. Take flight with everybody else! The cloud of dust is thickening and we hear the pounding of... oh, never mind.

Maybe I got separated from the herd at birth, but I can't help but wonder... how about counting to ten, twenty or thirty before following the trends?

One older motivational business book I like is Stephan Schiffman's Make It Happen Before Lunch. Among other jewels (yes, I mean that) Schiffman shares his theory of "living off peak" - contrary to the impulses of the mammalian brain (my reference, not his) he urges us to do as others don't. From going to work before anyone else hits the road to gliding down the wide aisles of the supermarket at 10 pm when others are home watching TV, the applications are many. Another expert I trust (and why the heck not?) is the great Warren Buffett, who neatly summarizes one aspect of how he buys and sells investments: "Be fearful when others are greedy, and greedy when others are fearful."

How un-antelopelike.

"In the long run, energy is fate."

The words above have inspired me more times than I can count, not just for business but for every effort in which inertia or failure of nerve threaten to take the day.

I've been thinking that courage in business (and it's safe to call it that right now) typically accompanies an inventive, independent approach. Just as I suspect that brave investors are buying into appropriate stocks while they're in the dregs, energetic businesspeople are grabbing the chance to get their company name and products dancing in the minds of their customers right this very minute. They feel even better as they observe their competitors in hiding, afraid to spend money until "everything is all right again." (And when will THAT be? If you know, you're one of very few seers who does. Why wait?)

This may not be the time for an extravaganza of spending or a great show of flash-and-bluster. We agree on this. But public relations, sponsorships, interactive marketing, online surveys to show customers you're listening... moves like that point out that your firm is a winner - in all seasons and through all conditions.

23 years running this business (Good grief!! Note to self, erase that indicator of my age before publishing post) have taught me that "thinking different" and being a marketing contrarian are signs of business intelligence.

Flying without radar.

[caption id="attachment_121" align="alignleft" width="103" caption="In business, as in life, not having a clue what you're doing often ends poorly."][/caption]

One of the many lessons one could reasonably take away from the Wall Street/Main Street/Bailout debacle is this: It's dangerous not to understand the intricacies of your work. And if you're a boss, and you don't understand these intricacies, you'd better make sure that the people you rely on are on the same page as you. On Wall Street, risk is the name of the game, of course. To a certain extent, risk is inherent in every business enterprise. But the ambient dangers of any business venture (economic factors, competitive pressures, trends that affect the need for your product or service, and all the rest) are sufficient without piling ignorance on top. In the financial sector, we've seen a rather pervasive degree of ignorance of factors including:

-What happens when virtually incomprehensible mortgage-backed securities behave badly

-Why a housing bubble might just maybe burst someday

-Why the likely "depth to the bottom" is going to be really, really embarrassing. To say the least.

Now, turning our attention away from Wall Street... the last decade has challenged many businesspeople, especially veterans (yeah, that means old people, like, you know, 40). For many of us, changes in technology alone - whether in computer science, medicine, biotech or the like - have meant long evenings of research or, in some cases, toying with the temptation of early retirement (like, you know, at 40). The fact is that, when managing any career that matters, each of us has to keep our radar turned on, our eyes and ears sharp and our focus firmly on understanding the changing business/tech/financial concepts that, let's face it, we are duty-bound to master.

Agility: business, watch the candidates and learn...

It's been nearly impossible to tear my eyes away from the computer as of late, because the news is as engaging as... a train wreck. We have financial giants on their knees begging for federal assistance. Plus candidates wriggling to get into new, advantageous positions vis a vis each day's hot issues.

[caption id="attachment_70" align="alignleft" width="80" caption="Gumby knows how to bend with the times."][/caption]

Well, the candidates take it a little far, and tend to be transparent at times. Since yesterday, McCain and Obama have become deeply, deeply concerned about regulating Wall Street. Also, McCain has shrugged off his "experience matters" overcoat to embrace the clearly untested Palin. Obama is sweating to shed his image as an "elitist" and become dearer to the working folks whose votes he so badly needs.

Sure, it's nauseating to watch. (I said "train wreck", did I not?) At the same time, I think our illustrious candidates have a lesson for Wall Street.

Think fast! Act quickly! Change when conditions demand it. And most of all, stay agile. Sinking behomoths like AIG are simply too massive and sleepy to respond promptly when market conditions demand.

Responsiveness is one area in which smaller businesses, or larger ones with smaller, "independent" units, have the winning edge. Although maintaining more credibility than a politician.... is good too!