December is a natural time to reflect upon the accomplishments of the past 12 months, and to set goals and objectives for the New Year.
In doing so however, most of us think too much about next year, and too little about our longer term and multi-year business horizons.
There are some benefits to this, I mean who can really forecast market and competitive conditions and customer wants and needs beyond just a few months these days?
And, given high rates of personnel turnover endemic to our ever-increasing “low switching cost” workplace, it can feel even more difficult to do so from a “bottoms-up” resource and organizational chart basis.
But forecast we must.
Because it is only through thinking and planning long-term that we access the reflective cores of our minds and spirits to “come up with” breakthrough business ideas simply inaccessible from the “reactive” present.
• How to better leverage our company’s intellectual and brand assets to develop new products and services
• How to lay the ground work for new marketing campaigns, targeting new customers in new markets (with more favorable competitive conditions)
• How to expand globally
• Rethinking our companies’ organizational charts (and rewriting job descriptions)
• How to access outsourced and virtual pools of human talent to scale quicker and more cost-effectively
• Re-languaging our organizations’ value propositions (More pithily describing the features and benefits of our product and service offerings)
• Redrafting our mission and vision statements (and by so doing re-motivating and re-focusing ourselves and our organizations)
• And perhaps most importantly, defining with a laser like precision The Exit Plan for our organizations and for everyone in it (and getting out of No Man’s Land!)
Figuring out how to pursue opportunities and how to overcome challenges like these is almost always best done with a Start at the End approach: visioning out to the future and working backward from there.
How far to look out? I think Three Years is best.
It is long enough to get to that space of the “unbounded future” (reflect on being three years older than you are right now), while being short enough that the projects and action items arrived at very much need to be “gotten after” right away.
So, let’s all use this special time of year to reflect longer term on our more idealistic and on our bigger opportunities…
…the pursuit of which will transform our sometimes humble and prosaic day-to-day work into something far more profound.
Happy Holidays to You and Yours!
When you're selling something to anyone, be it a prospective investor or prospective customer, there are two main types of selling techniques to employ: emotional selling and logical selling.
In emotional selling, you appeal to the buyer's emotions. For example, if selling a sports car, emotional selling would have the prospective buyer visualize how they will feel when they press down on the accelerator and surge forward, and how the wind will feel in their hair when they put the sun roof down, etc.
Logical selling would appeal to the buyer's logic. A more logical sales pitch, for example, would include factors such as why this sports car is better than others (perhaps better gas mileage, better warrantee, etc.) and why the prospect should buy from this dealer (perhaps better pricing, better service, etc.).
The most effective form of selling is generally to use both emotional selling and logical selling. This holds true for "selling" to investors, even very sophisticated ones.
For example, even the seasoned venture capitalist has emotions. Painting the picture that your company will be the next Facebook or Google will excite them. Getting them to think about how they will feel (the prestige among friends, colleagues, etc.) from being an early investor in such a huge success can prompt action.
However, while emotional selling is helpful, the primary selling technique to motivate most investors is logical selling. Specifically, you need to prove to them why your venture will succeed and how they will get a solid return on their investment.
To win over such investors, your logical selling argument should be packed with irrefutable market research. When you present investors with third party research (i.e., research published by sources other than yourself), they gain the confidence that your venture is in fact worthy.
So, what market research should you conduct to logically prove your case to investors? Here are the eleven core areas to answer:
1. Industry Sizing
Investors need to understand precisely how big your market is. Because if your market is too small, their opportunity for returns might also be small. So, start by determining your market size.
2. Key Market and Industry Trends
Investors also need to know the key trends in your market. For example, if the market is currently small, but it's growing rapidly, this might excite investors. Or if new government regulations have prompted industry changes that support your success, they need to know.
3. Details on Your Top Competitors
Having competition is generally a good thing; it proves that customers are buying solutions like the ones you offer. Importantly detail the strengths and weaknesses of your competitors so you and your investors know what you're up against.
Importantly, you don't have to be better than your competition in every single area; ideally you're better in the areas customers care about most.
4. Website Performance of Top Competitors
In nearly all industries, the web is a great source of leads. Understanding and detailing your competitors' performance on the web gives great insight into them and online opportunities that exist for you.
5. Link Profiles of Top Competitors
Understanding the other websites that link to your competitors is also helpful. You may want to contact and/or partner with similar companies/websites, or use their link profiles to identify other websites to contact to link to you.
6. Web Traffic to Top Competitors
Among other things, understanding the website traffic of your top competitors will show their traffic trends. For example, is one competitor's traffic rising or decreasing? Do they experience seasonal fluctuations? Etc.
Likewise, understanding which keywords are driving their traffic alerts you to the keywords for which you should focus on ranking.
7. Social Media Profiles of Top Competitors
Social media can tell a lot about a competitor. Do they have a large Facebook following? What about Twitter, or Pinterest, etc.? Understanding their social media profiles alerts you to the types of customers they are serving, and how customers perceive them, among others.
8. Detailed Identification of Key Customer Segments
Customers are the key to any company's success, and investors want to know exactly who your customers are. Importantly, identify the distinct customer segments you are or will target.
9. Demographic Profiles of Customer Segments
Once you detail which customer segment(s) you will target, you must detail their demographic make-up. For example, what gender are they, where do they live, how much money do they make, etc.? If you serve business clients, demographic variables also include the size of their company, what their title is, etc.
10. Ancillary Needs of Key Customer Segments
The final step in assessing your customers is to determine what else they might be buying before, during and/or after purchasing from you. This will help in further understanding their needs, and alert you to potential business partners to contact.
11. Financial Research
Financial Research gives great credibility to your financial model and the potential financial returns to investors. Here you should research and present your industry's average financial metrics, such as average industry costs, profit margins, etc.
In summary, when selling to investors, particularly savvy investors, be sure to appeal to their emotions. But remember that logical selling will generally be more effective. So rigorously conduct your market research so you can present facts and logic that convinces them to invest in your company. Not only will the research prove the viability of your business to investors, but it will give you great market and competitive intelligence that allows you to gain more customers and grow faster.
The other day on my drive to work I heard a song on Pandora. The song was called "Just the Girl." And it's by the band 'The Click Five.' I'd never heard of the band nor the song, but one of the lyrics caught my attention:
"She laughs at my dreams. But I dream about her laughter"
This line caught my attention because it reminded me of two extremely important mindset principles for entrepreneurs.
1. You must separate yourself from people who laugh at your dreams
"She laughs at my dreams." Imagine hanging out with someone who laughed at your dreams. Do you think that would help or hurt you? Clearly it would hurt you. And I think it would be near impossible to achieve your dreams when surrounded by such negativity.
In fact, motivational speaker Jim Rohn once said, "You are the average of the 5 people with whom you spend the most time." This is absolutely true. When you hang out with successful people, the conversation is generally optimistic. You hear what the others are achieving, how they are overcoming obstacles, etc. And you adapt their positive thinking and can-do attitude which prompts your success.
Alternatively, when surrounded by negative people, you hear how they primarily talk about their struggles, how they blame others for their problems, and so on. You get brought down, and you start thinking negatively too. The result: you never achieve your goals.
So, the first lesson here is to separate yourself from losers and hang out with winners. There are many ways to achieve this. One of the easiest is to find and attend local business and entrepreneurial events. Another is to find a mentor or assemble a Board of Advisors. In each of these cases, you'll soon be spending time with winners, and their success and mindset will rub off on you.
2. The Law of Attraction
The Law of Attraction is basically defined as this: you get what you think about most. So, if you're constantly thinking about what can go wrong in life and/or your business, things will go wrong. But, if you constantly stay positive and think about success, you'll achieve success.
"But I dream about her laughter." In this line, the singer is thinking positively. He's dreaming about her laughing; so that is what he'll attract/get.
In your business, you do this by setting goals for what you want to achieve. Then, think about achieving your goals and do it often. Visualize yourself achieving the goals too. Doing so is proven to dramatically improve your success.
Looking at the line as a whole -- "She laughs at my dreams. But I dream about her laughter" -- you can see how clever it is. Even though she's a negative influence in general, he turns it into a positive.
Even more clever is for you to surround yourself with successful entrepreneurs. Their mentality and success will rub off on you. And set your goals and dream about achieving them. When you do these things, you'll start achieving a lot more success. You'll achieve your goals and start creating even bigger and bolder ones.
Suggested Resource: As you just learned, the way you think as an entrepreneur is absolutely critical to your success. In fact, it's arguably the most important factor in your success. Check out our Millionaire Mindset program to learn how to improve the way you think so you achieve more entrepreneurial success.
Thanksgiving is the quintessential American holiday.
It acknowledges the best qualities of our blessed land - hard work, diversity as strength, and a focus on solutions not problems.
Whenever I am feeling down about America’s prospects in this brave new world of ours, I reflect on Thanksgiving’s timeless lessons.
As every schoolboy and girl knows, Thanksgiving traces its origin from a 1621 Pilgrim harvest feast to celebrate surviving an extremely difficult first winter in the New World.
The Pilgrims owed their survival to the goodwill of the Wampanoag Indians - the original inhabitants of the area - who taught them how to grow corn and how to fish in the very unfamiliar New England soil and seas.
As a gesture of thanks and goodwill, the Pilgrims invited the Wampanoags to sit down and break bread in a spirit of friendship and camaraderie.
What a story! First, let's reflect on the guts, tenacity, sense of adventure, and just “never say die” hard work and perseverance of the Pilgrims.
Think about it - if they can make it then with their oh-so limited 17th Century resources, what can we do / where can we go with our virtually limitless 21st Century ones?
And let's reflect on that happy day of brotherhood and be justifiably proud of the powerful diversity of modern America.
Doubt me? Then spend a Saturday with me and my 7 year-old son’s AYSO soccer team.
With its Hawaiian coach.
Its son of Ethiopian refugees star player.
And its African - American, Mexican - American and suburban white kid players all happily frolicking in a melting pot scene not to be duplicated anywhere in the world.
Soccer with my sons is a welcome break from what I am sad to say has become a bad, gossipy vice – keeping up with the “news.”
Between the dire talk of tepid economic recovery, government gridlock, perpetual Mideast crisis, disease scares, and impending environmental doom, if you don't catch yourself you can't help but feel sorry for yourself, the country, and the planet.
It is 99% bunk.
Both the world and America have NEVER offered more opportunities for a larger percentage of
us to live affluent lives, to do self-expressive, remunerative work, and to be amazed daily by the wonders of modern technology than it does right now.
On Thursday, let’s give thanks for all that and more.
Happy Thanksgiving to you and yours!
Every day I see entrepreneurs trying to find that right balance between keeping their intellectual property and business models confidential while sharing and promoting themselves to the investors, partners, and customers whose interest they so very much need to pique.
My bias generally falls strongly on the side of transparency - both because it is a virtue unto itself - and because it takes a lot of effort in our “everything end up on the Internet for all to see” age to truly maintain confidentiality.
However, I have a more fundamental reason why I generally advise entrepreneurs and investors not to worry all that much about confidentiality.
Supply and demand.
Quite simply, there very few entrepreneurs out there with the “right stuff” to actually build profitable businesses.
And those that have it are on balance, either too busy, too rich, and/or my favorite just too ethical and decent that 999 times out of 1,000 as opposed to the problem being someone of substance stealing a business idea, that the far more likely reality is a vast and unrelenting sea of apathy toward it.
Now, this does not mean that there is no place for confidentiality in modern business.
But the reason why it is important is usually more subtle than the fear of idea theft.
You see, for the vast majority of companies without eight figure+ R & D budgets, the reason why confidentiality is important has to do with the under-appreciated context of mystique.
Oxford defines mystique as "a fascinating aura of mystery, awe, and power surrounding someone or something."
I would combine this definition with one of my favorite lessons from my long ago MBA marketing class - namely that in a modern marketplace there is zero difference between "actual" and "perceived" value.
So, in these contexts, the value of non-disclosure derives not so much from the threat of a nefarious competitor stealing an idea as it does from how the aura of confidentiality bestows on an idea that “fascinating aura” that draws people and resources to it.
And from this aura flow many wonderful things: brand equity, pricing power, and marketing effectiveness being chief among them.
Now for those who say that this is quite the cynical view of things, I would encourage them for the next seven days to not take in any entertainment media - no movies nor television nor Internet - nor to appreciate the lovely design of an iPhone, and certainly to not gaze fondly on an elegantly dressed and coiffed woman or man.
In other words, to suffer for just one week like the terribly poor, extraordinarily unfortunate and very mystique - deprived people of North Korea must unconscionably suffer through every day of their lives.
And then come back and tell me that mystique doesn’t matter.
So let’s appreciate mystique - that beautiful elixir of the modern marketplace – for its own sake as the incredible gift and blessing it is.
And as marketers, as salespeople, as product designers, as entrepreneurs let’s gracefully use confidentiality and discretion to help create it.
In April 2012 the Jumpstart Our Business Startups Act (called the JOBS Act) was passed and signed by President Obama.
The JOBS Act Opens Up Equity-Based Crowdfunding
The key goal of the JOBS Act was to make it possible to raise funds from investors through certain crowdfunding sites in exchange for equity in your company.
To clarify, there are many sites online where you can raise Crowdfunding today. But on these sites, the money you raise is either in the form of donations or are in expectation of rewards; you were previously unable to raise equity via Crowdfunding.
The JOBS Act Today
While the JOBS was signed in April 2012, it did not allow for equity-based Crowdfunding...until the SEC approved certain regulations.
The first major regulations were approved last month, on September 23, 2013. Specifically, on this date, the JOBS Act removed the ban on general solicitation.
General solicitation is the act of telling people, with whom you do NOT have a pre-existing relationship, about the opportunity to invest in your private company. This had not been allowed for 80 years prior to September 23.
So now you can tell the world that you're raising equity funding. You can shout it from the rooftops, tell people about it who are leaving a library, post it on Facebook and Twitter, and so on.
The JOBS Act Tomorrow
However, there is still one BIG limitation the JOBS Act has not resolved. That issue is that, as of today, you can only raise equity Crowdfunding from accredited investors.
While the full definition of "accredited investor" is slightly more detailed, it generally means that the investor is sophisticated and has a net worth (excluding the value of their primary residence) exceeding $1 million and/or has annual income greater than $200,000 in each of the two most recent years or (or $300,000 if including their spouse).
As you can imagine, the vast amount of people who might want to invest even a small amount in your company are NOT accredited investors. That's where Title III of the JOBS act comes in; we hope that sometime in early 2014 the SEC finalizes Title III and legalizes equity-based Crowdfunding to non-accredited investors.
In the meantime, you CAN raise rewards-based Crowdfunding and equity-based Crowdfunding from accredited investors. And hopefully within a few months, the Crowdfunding opportunity will be even bigger.
Suggested Resource: Do you want Crowdfunding? If so, don't try to raise it from scratch -- the 14-step blueprint already exists. Get the Crowdfunding blueprint here.
Negotiating is one of the most powerful skills you can use regardless of your business type.
Not only are there ample negotiating opportunities when buying, selling, or managing for growth; being able to negotiate well can mean the difference between reaching your desired outcome or not.
Make it a habit to negotiate all important items and it will add up in a major way. For example, think of what it would do to your bottom line to reduce expenses by 10% across the board!
Below are 7 "sneaky" negotiations tips. There not "sneaky" in that they're not deceitful or lying (which I do NOT recommend). Rather, they are techniques that you probably are not familiar with, don't do as much as you should, and which DO work.
Tip #1: Schedule the Negotiation Close to a Deadline
Ideally, you can schedule the negotiation close to the other party's deadline by which they need a completed agreement. This will put you in a more powerful position, because they are more motivated than you.
You would know their deadline by gathering research about them in advance. Scheduling the negotiations later also gives you more time to do further research and prepare for the meeting so you'll be even more effective when the time comes.
If you are the buyer, keep the end of the week, month, or year in mind. They might have internal goals and quotas in their company and will be willing to give away more in order to reach them.
Tip #2: Don't Get Emotionally Attached Inside
There are two main ways to get overly attached. The first is attachment to outcomes. The reality of negotiating is that any time you go into one, you may have to walk away, or only get part of what you wanted.
Be willing to do your best and then accept whatever outcome takes place. Fact: when you play the game you will lose some of the time. But when you cling to outcomes too much, you lose more of the time.
Be willing to walk away. This brings us to the second way to get too attached...by reacting to the other party, their attitude, and what they say (which may be designed to get you to react). Stay calm and patient, no matter what they do. Your calmness will help you think clearly and also make you appear more powerful.
Tip #3: Don't Look Too Attached on the Outside
If you're attached inside, it will probably show through your body language-so work on your inner game first. Then, pay attention to your physiology and what your posture is conveying.
Without even saying a word, you can give the impression that you're willing to walk away from the deal and that doing so wouldn't be a big deal for you. Think about how you would sit, stand, lean, listen, and the tone of your voice while speaking, and try to act the part.
You'll find that just paying attention to your body leads to it correcting itself and conveying the image you want. Try to get in the right state of mind before the negotiation starts, and check in with yourself throughout to make sure you're not slouching or appearing less confident.
In reality, you're sending messages through your body language that many salespeople or experienced negotiators are trained to read. The only question is whether to pay attention it to yourself or not. And the answer is "yes!" Try it and see.
Tip #4: Never Be the First Person to Name a Figure
For example, if someone asks you what your firm's hourly rate is, don't just react and answer it right away! You'll be tempted to blurt out something that is less than you wanted by the time the meeting is over.
You could respond by asking what their budget is for the project with which they need help. A low-anxiety way to turn it back on them is to respond with a clarifying question. Then, ask a second question like the one above to the other party that's aimed to find out what they can pay, or are willing to pay.
Tip #5: Always Ask for More than You Need
If you can't avoid naming the first figure, then make the best of it by asking for more than you need, to start the negotiations with plenty of room to come back down later if you must.
Sometimes the other party will accept this higher offer right away! These are the exceptions, but always do it anyway because you never know.
So if someone asks for your hourly rate, as mentioned above, you could answer with a higher hourly rate than you would typically bill. This also gives the impression that they are getting more value in the deal, as those who "typically" bill a higher rate more are usually seen as more competent professionals. (I would then suggest that if you get the deal, to work extra hard on it to make it worth the higher price.)
Tip #6: Never Take the First Offer
If you CAN get the other person to name the first figure, here's what to do-balk, then ask them to do better. I know a few guys who do this out of habit no matter how low the starting price is.
When they name their figure, try to look shocked or surprised. This does wonders to manage expectations for the same reason that starting with a lowball offer works. Then, even if it's a lot better than you expected, calmly and assertively (but not arrogantly) state "Is that the best you can do?" or "I think you'll have to do better than that."
Tip #7: Don't Get Suckered by the "Rules" Trick
Don't think for a minute that all contracts must be signed as-is. If the other party has a contract to sign, feel free to cross out anything you don't like in it. You can also add items you feel should be in there. Don't just sign away your chance to improve your outcome! It's all negotiable.
Some companies or salespeople will try to tell you that the contract can't be altered. Find out if this is truly the case by asking where it says that. Is it law? Is it company policy? Has an agreement ever been changed before? Who could approve it? Find this out and have them get permission from their manager if needed.
If the boilerplate language of the agreement really can't be altered, take this as a cue to go back and renegotiate one of the previous items by saying something like "Okay, well if I can't change this paragraph, lower the price by $X and you've got a deal."
There are dozens more negotiating and persuasion tips I discuss in "Getting What You Want." The key is for you to not only know these tips and tactics, but to use them in the daily course of running your business.
It is hard not to laugh when I hear tired old refrains like "Nobody reads business plans anymore" or "In a world of lean startups, there is no time for strategic planning."
Why do otherwise intelligent and well-meaning businesspeople say and think things like this?
Well, for starters as human beings we all struggle to emotionally grasp the impact of the history not made, of the things that don't happen.
You see, poor strategy does not manifest itself as much in high profile flame-outs as perhaps it did in days of yore (see Pets.com, eToys, etc.) as it does in nothing of note ever being accomplished.
As in companies that grow slowly, if at all.
And make no profits.
And are led by entrepreneurs whose talent and work ethic doesn’t translate into the kind of pay and lifestyle they seemingly deserve.
Missed opportunities, lost years, unrewarded work.
These are the real but hidden costs of poor strategy.
Now, the other big misconception around strategic plans is confusing the “form of deliverable” with the process itself.
Again, this is a case where otherwise smart and well-meaning businesspeople make an obvious, but critical error: They equate the plan with a physical document.
And when done poorly, more often than not a document that is only tangentially connected to the “real business” it supposedly represents.
Now, the good news is that the literature is filled with great best practices - tested over thousands of businesses - as to how to lead strategic planning processes that are connected to the actual marketing, sales, operations, and finances of a company.
Even better news: Inexpensive, effective, and everywhere accessible business software-as-services are connecting the dots between “big” strategy and the “small” to do’s, tactics and action items at the living, breathing heart of a business.
Tools like CapitalIQ, Simplycast, The Resumator, Box, Grasshopper, Wufoo, Smarsh, IfByPhone, SnapEngage, Docusign, Hootsuite, Infusionsoft, and Interspire that automate traditionally laborious and repetitive business functions.
This is where 21st Century Strategy lives.
Now, as for those who prefer to cling to their tired clichés, well I guess they can always reminisce about how things were back in the 20th Century.
But for those who need more than nostalgia to sustain them, there has never been a better time to win by doing strategy right.
P.S. Like to demo our dashboard offering? Then Click Here to learn more.
If you're looking for funding and/or to successfully grow your business, a little known secret is to find and leverage Advisors.
So, who or what are Advisors? Advisors are successful people that you respect and that agree to help your company. Advisors are generally successful and/or retired executives, business owners, service providers, professors, or others that could help your business.
Advisors generally will not cost you any money (you don't pay them), although I do recommend giving them stock options to incentivize them to contribute as much as possible.
Getting Advisors is not a requirement for raising money, but they have multiple benefits as follows:
1. Practice: if you can't successfully pitch an advisor to invest time in your business, then you're not going to successfully pitch anyone to invest money in your business. So, practice your pitch on prospective advisors first, and use that practice to perfect it.
2. Connections to capital: as successful individuals, advisors often have the ability to invest directly in your company; and/or they tend to have large, high quality networks of individuals they can introduce you to.
3. Credibility: having quality advisors gives your company instant credibility in the eyes of lenders and investors. For example, if you started a new hockey stick company, having Wayne Gretzky as an advisor would certainly give you great credibility (and connections). But even having much smaller names than Wayne Gretzky as advisors can build enormous credibility.
4. Operational success: In an interview I did with Dr. Basil Peters (a wonderfully successful entrepreneur, angel investor and VC), Dr. Peters said that mentors and advisors are an entrepreneur's "single most controllable success factor." Having Advisors with whom you can discuss key business matters as you grow your venture will help ensure you make the right decisions, particularly if they have encountered and dealt with the same challenges already in their careers.
I have seen these four benefits first-hand for my own companies and for companies that we've helped build their own boards. Click here if you'd like to see the list and bios of Growthink's Board of Advisors.
So, how do you build your Board of Advisors?
The steps are fairly simple:
1. Create a list of people you would like to be on your Board
2. Contact and meet with them
3. Secure the best Advisors you meet with
The final step is to hold formal and informal meetings with your Board members to leverage them -- to get them to fund your company or introduce you to other funding sources; to answer key challenges that you are facing, etc.
I must admit that years ago I wasn't thrilled about investing the time to go through the steps of creating a Board of Advisors. But I can assure you; those hours spent have yielded an enormous return on investment. In fact, I should have developed my Board much sooner than I did.
So, go out there and start building your Board of Advisors today. And start reaping the enormous benefits.
Suggested Resource: Want advisors? Want funding for your business? Then check out our Truth About Funding program to learn how you can gain advisors and access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.
This article presents 14 times and ways when you can negotiate to get a better deal for your business.
After reading this, I want you to choose the ONE most significant thing in your business that you must negotiate in the near future.
I'm not talking about buying a used swivel chair on Craigslist. I'm referring to one of the various opportunities that you have as an entrepreneur to determine your own end results-possibly saving thousands or tens of thousands of dollars-on some significant expense or transaction coming up.
Since so many things in business are negotiable, keep negotiations top of mind. Generally you should always try to negotiate as you often have nothing to lose.
Here we go...
Negotiating with Suppliers
1. Cost of high-end purchases - Typically, items you buy in the hundreds or thousands of dollars have a more involved sales process, so the vendors offering them are more likely to adapt and negotiate in order to secure your business. They also have more leeway between their cost and what they charge than if they were selling commodities.
2. Payment terms - Oftentimes you might rely on customer payments to cover your purchases. IF so, you'll ideally want to pay your vendors after your customers pay you. So negotiate this preference
3. Quality/Scope of Offering - Maybe your budget is limited and you just can't pay more for something than you have. Don't stop negotiating! Just change what you ask for. Suppliers might be able to offer you better service, some freebies, or an upgraded package just by asking for it.
4. Volume discounts - If you're a startup and don't have volume yet, then share your vision with suppliers of how you will grow and what your company will become. Use this vision to negotiate a volume discount over time that starts immediately.
5. Office Space - It's funny how many people walk over dollars to get to the dimes. The same people who drive 2 extra miles to pump gas at a station that's $.02/gallon cheaper will not bother negotiating on major purchases and save thousands. Your working space is one of your highest expenses-so fight for the best price!
Negotiating with Employees
1. Salary - Obviously, when hiring a full-time employee there will be salary negotiations. This is the final part of the hiring process and it pays to prepare as it might save you thousands of dollars per year. And, with freelance service providers, they will often offer discounts off their regular hourly rate in order to get a first project started with you, or in exchange for consistent work.
2. Equity or Partnership - in the beginning, you might not have the cash to offer real players a full-time job, but you can attract them by offering a piece of the pie, if you can show that the opportunity is great enough. You can avoid paying market-level wages.
Negotiating with Investors and Lenders
1. Basically, everything you agree on with an investor or lender is negotiable, including:
Negotiating with Buyers
1. Price - Your customers generally want the lowest price, and you probably want the highest. So try to offer other concessions besides price to close sales when customers won't pay as is. For example, you can include an additional product or service to influence the customer to buy.
2. Special Discounts - These are made on a case-by-case basis, and should be used sparingly. These are different from sales, which is a pre-emptive concession to get people in the door. Only agree to lower your price in exchange for something else, or if they commit to buying now.
3. Offering bonuses - These are the extra add-on items you can offer the customer that add value but don't affect your cash flow as much. You might upgrade or further personalize the product or service you offer-anything to sweeten the deal.
4. Extending financing or payment plans - This is another way to keep your price high and still make more in the long run, if you don't mind waiting a little longer and also not being able to collect a certain percentage of the remaining payments (hopefully a small number).
5. Collecting accounts payable - If someone falls behind in making payments to you, the best thing to ask them is how much they are able to pay, and when. Let them tell you...and this will start the negotiation and give you a better idea of what's possible.
Which of these negotiating scenarios do you see coming up soon on your radar? Which could you make happen now? What would you stand to gain by having the courage to ask for more?
And what do you stand to lose by asking? The odds are, nothing. The worst they can say is "No." Don't worry...few deals have been lost because someone got offended by an attempt to negotiate. They may even respect you even more for having tried!
Now, since the first step of negotiating is to begin with the end in mind, and picturing a clear outcome in your mind, take the negotiating opportunity you choose and break it down in to specific objectives, like "Save 25% on our office's new security system" or "Work a deal with our new CFO to work for $2500/month in addition to 10% ownership" or something equally specific. The time to negotiate starts now.