Negotiations Are Never Final
NEGOTIATION SHOULD be seen as an ongoing process. No negotiation is ever final. If you get new information that changes your perspective on the situation, go back and ask to reopen the negotiation. We talked before about the “Chinese contract.” If you are negotiating with another party with whom you intend to negotiate again and again over the years, the happiness of the other party should be an important concern of yours. Invite the other party to come back to you if the situation changes and the party is no longer happy with what you have agreed upon.
Never feel trapped after you have signed an agreement after a negotiation. Always be willing to go back and ask people to change the terms and conditions. All they can say is no, and in most cases, when it is a long-term negotiation, intelligent businesspeople will seek a way to make you happy, taking into consideration the changes in the situation that have taken place.
Offer Something in Exchange
When you go back and ask to renegotiate an agreement, be sure that you have something to offer. No one is going to seriously renegotiate an agreement with you unless it is somehow apparent that there’s a benefit or advantage to them of some kind. It is your responsibility to think through what you can offer the other party before you ask the other to relent on a condition that will end up costing him money in some way.
Think through the benefit or advantage that you can offer to the other party as an incentive to reopen the negotiations and change the terms and conditions. Write out a list of all the things you have to offer, and “sell” your request to renegotiate on the basis of these benefits to the other party.
Go to Your Bank
Earlier in my business career, I ran into financial difficulties. The economy had collapsed suddenly and my business had shrunk by more than 50 percent. I had a bank loan and I could no longer make the monthly payments on that loan. What could I do?
I found out a little secret in the banking industry. If a loan goes bad, bank managers or loan officers get into serious trouble with their superiors. But you can keep a loan current if you simply pay the interest every month. As long as the bank is receiving the interest on the principal that it has advanced, the loan is still considered current on the bank’s books and no one gets into any trouble.
So I went to my bank manager, Bob Murray, and told him that I could no longer make the monthly principal payments, but I would keep the loan current by making the interest payments if he would cut me a little slack for a few months until my business improved. To my surprise, he agreed immediately. He rewrote the loan in front of me, calculated the amount of monthly interest on the loan, and asked me if I could make those payments each month. I assured him that I could. He thanked me very much, shook my hand, and our relationship went on without a hiccup.
Call Your Creditors
On another occasion, my business got into serious trouble and I could no longer pay all my bills. I had thousands of dollars of accounts payable for printing, rent, utilities, shipping, recording, and legal and other business services. It is a very unpleasant situation to be in. So, instead of avoiding the phone calls and collection agents, I made a list of all of my creditors, and then visited each one of them personally, face-to-face. I told them all the same story.
“In this economic recession, my business is in serious difficulty,” I said. “But there is light at the end of the tunnel. I can see that within three to six months, my business will recover substantially, and I will be able to repay you every cent I owe you, with interest. However, if you continue to call me and insist on payment, I will simply collapse my company, put it into bankruptcy, and walk away. You will not receive a penny. What would you like to do?”
Businesspeople Are Flexible
Again, it was amazing. They said, “If you will commit to making a small payment on your account each month, this will enable us to keep your account current. In that case, we will work with you until your business turns around and you can pay it all back in full.” So I did, and they did, and we all did. Within six months, my business had recovered and I paid back every penny that I owed. If you are currently in a bad situation because of a negotiation you entered into in the past, or because of expenses that you incurred that you cannot currently meet, don’t be afraid to go back and ask for a change in terms and conditions. If you are reasonable and offer a reasonable solution, you will be amazed at how reasonable other people will be as well.
