Negotiation Strategies For Entrepreneurs: 4 Ways You Are Losing Money

In a recent Forbes post, I wrote about negotiation strategies for the underpaid employee. As an entrepreneur, you also negotiate – when you make a sale, when you decide on specifications or customizations on an offering, or when you change directions on a project. With all this negotiation practice, you would think it would get easier. But it doesn’t, and it won’t, unless you consciously work on it. Unfortunately, there are lots of sneaky ways entrepreneurs unconsciously lose money for their business by failing to negotiate persistently enough. Here are four scenarios, where the best negotiation tactic might be walking away:

Say NO to pro bono work

When you launch a business, pro bono work can get you started with referrals and testimonials. As your business grows, you may continue to do pro bono work for publicity, to test out new offerings, or as goodwill for your audience. However, if you need to grow your revenues, you will need to limit, if not cut out entirely, your pro bono work. Your time, mental bandwidth and emotional capacity are limited. This is your business inventory, and you can’t afford to give it away. Set a maximum for how many hours or how many clients will be served pro bono, and say NO to every other request.

Say NO to scope creep

Let’s say you are disciplined enough to only take paid work. That’s definitely an improvement but it’s still only profitable if you don’t give away more than what you’re charging. Some clients will tack on extra requests or change parameters forcing you to do additional work. This project “scope creep” costs you money. You need to be mindful of where this happens in your business and negotiate via payment policies or change fees that limit your downside in these cases. You might have to train your clients to take up less time with meetings or to limit their access to you. Don’t be afraid to say NO altogether and fire unprofitable clients.

Say NO to friends and family favors

Family and friends expecting freebies is a particular danger in services business. You might be a realtor so your house-hunting friend asks you run searches on the MLS. Or you’re a college admissions coach, so could you help your friend’s HS-age daughter on her essay? Remember that your time, mental bandwidth, and emotional capacity is limited. If you say yes to a friend, you say NO to another paying client. Decide in advance how many hours or requests you will accept, and refer the rest to experts they can pay for (or refer them to your website where they can register and pay)!

Say NO to bartering for food

Maybe your family and friends don’t ask outright for a freebie but couch it as a lunch invitation that ends up being a professional services session for them. So you’re not working for free, but you are bartering for food. Is this a trade you would be willing to make outright? You can’t run your business on calories, so protect your profits and your waistline and stop transacting business over lunch.

For the record, I do pro bono work, throw in extra bonuses for my clients, offer friends and family rates, and share advice over lunch (sometimes even just coffee). When I do, I do this willingly. But I also readily say NO when I’m too busy. So I’m not saying to never do this if you have the capacity and the interest. However, if you’re feeling underpaid or undervalued as a business owner, then start negotiating your pricing and offerings to everyone – non-profits, repeat clients, friends and family alike.

 

Anatomy Of A Thank You Note After Interview

In my latest post for Money and Time, I deconstruct the thank you note after interview. Here is the unedited version:

In my recruiting experience, I came across very few thank you notes, which is a shame. A thank you note is one more opportunity for candidates to stay front of mind with employers. Sending a timely thank you note shows professional courtesy and follow-through (one hiring manager I worked with knocked out candidates who didn’t send a thank you!). Finally, a well-crafted thank you note is a marketing tool that can promote your candidacy after memories of your interview have faded. The best thank you notes go beyond simple gratitude. Here is a breakdown of a productive thank you note:

Personalize by name and quote

Don’t just write to HR or your immediate hiring contact. If you have met several people, write an individual letter to each and every interviewer, and quote or paraphrase something specific they said. “Dear Alan, thank you for taking the time to meet with me. I particularly enjoyed hearing about your upcoming project with Really Cool Builders…” If you have a panel interview and meet several people all at once, still write individual notes. A personalized thank you deepens your relationship with that person and enables you to maintain that relationship separately, long after the hiring process plays out.

Reiterate your strengths

If a particular interview response seemed to resonate or there was something you discussed that elicited strong interest, build on these items in your thank you note. You might share another related example or point to additional ideas along the theme of what you discussed. This reminds the interviewer(s) about why they liked you. “My experience working with creative at Really Funky Advertising seemed to dovetail exactly with what you need for your designers. In another role at Really Inventive Copy, I also supported the creative team….”

Shore up your weaknesses

At the same time, if there was a hiccup in the interview – a question you stumbled on, or simply a strength you failed to highlight – address this in the thank you. Let’s say you were asked for an example of when you worked with finance and operations, as opposed to creative, and you didn’t think of anything or you gave one example but thought of a better one after the fact. Include the additional information in the thank you: “I’m excited that the opportunity gives me the chance to work with creative, finance and operations. At Really Stylish Retail, my role as the planning analyst meant I supported our finance team on forecasting, budgeting and trend analysis. This also involved the operations team as I reviewed inventory levels and logistics…”

Forward the action

Don’t just write about this additional information. Include enough so that they realize you have more to say, and then invite yourself to a future meeting so they can hear more about it: “As you can see from additional roles we didn’t get to discuss, I have more to share and would love to schedule another meeting to go into detail.…” In addition to more of your own experience, you might add an idea you have or point to a relevant article and suggest you discuss these further.

Once you have compiled and proofread your thank you note, send it by email. Email ensures the note will reach recipients in a timely manner. If you want to mail the note – to use nice stationary or to include additional material – I would send a quick email first, alluding to the upcoming material and then follow up with the hard copy note. Snail mail can take a really long time to wind its way through large corporate entities. One time, my thank you card to a mentor arrived months later, right before our next scheduled lunch!

Are You Using Old Techniques For A New Job

You may not think you’ve changed jobs, but when you go higher in your career (or larger in your business), your role changes, and you essentially have a new job. I write about preparation strategies for callback interviews in a recent Forbes post as an example of what-got-you-here-won’t-get-you-there. You can’t expect callback interviews to be the same as first rounds – they’re tougher– so you can’t prepare the same way. Similarly, when you advance in your career, you’re in a new job. You have different responsibilities and expectations. What worked before – skills, expertise, even time management approach — won’t necessarily be as effective. Are you using old techniques for a new job?

Do you need new people skills?

This isn’t to imply that you aren’t good with people. Far from it, if you’ve advanced in your career or business, you likely have excellent relationship and communication skills. But you may be managing directs or teams or projects for the first time or in a larger scope and scale. This makes earlier management approaches not as relevant to what you need to do now.

What do you need to learn?

Aside from people skills, you may need to do more exhaustive research or upgrade your analytical skills or start developing business. Identify the new aspects of your role and get support and training for these specifically. Don’t assume you can just figure it out and lose time spinning your wheels or being ineffective.

Does your schedule match your new priorities?

If you’re responsible for new things, you can’t hold onto the old things. It isn’t guaranteed that your promotion comes with additional resources to whom you can delegate all of your old work. You may need to enroll a junior colleague to pick up the extra. You may need to stop doing activities that don’t align with your new responsibilities. You may need to confront your boss about what stays and what goes on your priority list. However you handle it, you need to consciously reset your time management strategy

Have you given yourself enough runway?

All of the above adjustments take time. You are not going to be effective or efficient from day one as you absorb new responsibilities. Build extra time into your calendar because things will take longer. Set check-in reminders at regular intervals (1 week, 2 weeks, 1 month, 3 months) to ensure you’re moving in the right direction and to get help before falling too far behind. Needing extra runway as you tackle something new is expected, so build it into your calendar and your expectations of yourself.

Sales And Marketing: Are You Chasing The Wrong Goal

In a recent Forbes post, I wrote about chasing the wrong goal with the example of landing a promotion and still being unhappy. Aiming for one goal when you’re really after something else is not limited to traditional employees. Entrepreneurs with their attention on so many things, including both sales and marketing, might target one thing but really mean something else. For example, in our February radio show, a greeting card business owner asked about marketing tips, but I bet she meant sales. Sales drives the business. Marketing contributes to sales. If you’re a small business owner and spending time, energy and money on your marketing initiatives, ask these 5 questions to see if you really should be focused on something else:

How long is your sales cycle and do you have the cash on hand to wait?

Even the best marketing initiatives take time. If you’re pressed for money, you need to focus on sales, not marketing.

How many sales conversations do you have – look at this week, this month, this quarter?

Sales conversations are specifically those meetings and calls with a prospect who has authority to buy, who is your ideal customer, and who is primed to make a decision now.

How many of these sales conversations convert?

If you’re getting people interested but they don’t buy, you may need to focus on sales training, as your marketing is clearly working to get prospects to your door.

How do the customers that buy (or almost buy) find you?

These are the marketing initiatives you should prioritize, as you need to keep your sales pipeline full.

How healthy are your profit margins?

You may be selling and marketing effectively, but your costs are too high or pricing too low, so your business never generates the income you need, regardless of how much you keep selling and marketing.

Marketing is critical to a business, just like getting a promotion is critical to career advancement. But many times the immediate goal should be something else. Before you spend too much time strategizing and experimenting to fix something (say marketing) step back and ask what end result you really need. You may find that you need to pick a different goal altogether.

Relocating For A Job, Job Search Over 40 And Marketing A Creative Business

In the February episode of the SixFigureStart Career Coaching Radio Show, I answer questions on relocating for a job, including internationally, job search over 40, and marketing your creative business:

Check Out Self Help Podcasts at Blog Talk Radio with SixFigureStart on BlogTalkRadio

Julie asks: …I have a sales back ground I have achieved my real estate license and insurance license, and I have worked for a transportation company as their account manager….I really like getting new accounts for companies. Anyway I try not to work for commission and at this point in my life I am trying to relocate to San Diego. I am applying for jobs everyday….I am a real go getter but I’m just not sure where do I start. I don’t know anyone there….. Oh I don’t sell real estate or Insurance anymore.

John asks I have arrived in US during 2014 with my wife who has moved with her employer to a role. I now have a work permit and I am looking to find work in the FS sector (senior Marketing/Business development). Have a long a successful resume in the UK but no real contacts/network in US

Nancy asks: How does one find work/jobs for people over 40 who are labeled overqualified but under-experienced in their field?

Carlita asks I need to find a job that brings me fulfilment and purpose, that affords me more personal life quality time.  I am 53 years old

Vimadinah asks I am an artist and I do not know how to market my prints and greeting cards….I have been successful in the past however the contract is over and the other company had all the contacts. I would like to venture on my own and be independently successful….

Staying Motivated After The New Year Rush

Now that we’re well into February, are you staying motivated on your goals? In a new year Forbes post, I profiled Four Fun Ways To Make Your New Year Resoluions Stick – including gamification, habit stacking, scheduling your worries, and an interesting study on happy faces. If you’ve fallen off track anyway, here are 3 more motivation tips to try:

Pick new goals

If any of your goals are “should’s” (I should lose weight, I should save more money), just drop them right now. They won’t be interesting enough to get you past the tough times. Instead think of something that really moves you and gets you excited. It might even get you to the same end – e.g., instead of losing weight as the goal, you pick running a 5k or learning to tango. How will you reframe a stuck goal?

Shorten your timeframe

A brilliant idea from Miho Kubagawa is to pick 12 one-month resolutions in lieu of annual goals. This way, you don’t feel like you have to press on indefinitely, but there is an immediate light at the end of the tunnel. You can even stack your choices so they move directionally toward a bigger end – e.g., losing weight might be served by running a 5k one month, learning to tango another month, trying out gluten-free, etc. Do you have 12 smaller goals you can substitute for your fewer big ones?

Bundle temptations

The New York Times featured bundling temptations in its round-up of motivation strategies. In their example, you tie a delicious but wasteful habit to a new one you’re trying to encourage – so reading trashy novels might only be done when going to the gym. I may tie my Netflix habit to milestones in my writing projects. What can you bundle?

If one of your big goals this year relates to career, get inspired by this profile of career changer Susanne Rhow. She went from a corporate job in luxury goods to an entrepreneurial role selling high end real estate. Your move!

What If Half Of Your Customers Leave: Retention Strategies For Business Owners

In my Forbes column on the hot job market, I wrote about retention strategies for employers to keep their best staff. This is not just a corporate issue. As business owners, we have staff, vendors, and partners, and we need to remember that when the market improves, they have options for where to work and who to partner with. As business owners, we also have clients to retain. Have you thought about what you would do if half of your customers decided to leave? Here are three retention strategies to ensure that you stay front of mind with current customers:

Check in on a regular basis

Customers will reach out to someone when they have a need, but to reach out to you specifically, they have to remember you. Do you have a system to regularly stay in touch with your customer base in-between orders or services? This could be done via newsletter or an automated email series. Depending on how high touch your offering is, this also might include phone calls or hard copy mail.

Make follow-up generous and non-committal

However you decide to keep in touch with your customers, make the follow up generous and non-committal: generous, meaning that the focus is on the other person and not pitching your stuff; and non-committal, meaning that you’re not actively soliciting a response. Generous follow-up includes an article of interest, a holiday greeting, an idea or recommendation (for something other than your offering). If you’re a personal trainer, this might be an article on health and wellness trends, a Happy New Year greeting with an inspirational quote, or a book recommendation on the latest fitness science.

Offer bonuses

If you’re speaking at an event and have comp passes, offer them to your customers. If you have excess capacity in your schedule, let your customers know you’re available and offer a last-minute special rate. From your entrepreneur network with complementary offerings, pick some referral partners and offer each other’s audiences special packages or extras. Give your customers extra items they are not expecting.

Be proactive in your customer retention strategies because the improving job market means an improving economy, which means you want to be front of mind with your customers if they’re in a buying mood. How will you stay in touch? Let me know your favorite retention strategies and any questions or issues you’d like to explore further!

 

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