Negotiating 2: Advice from the masters
Many contractors pride themselves on their abilities to negotiate. Sadly, many others haven't a clue.
You are highly unlikely to become a successful contractor – profitable over the long term – without being as sharp a negotiator as you are a builder.
Yet of all the business and building skills that renovators and home builders talk about when they get together at our annual RenoFocus sessions, learning to be a better negotiator rarely gets a mention.
When contractors talk about moving their businesses to the next level, “technology” is frequently talked about. Then there’s “building your team,” “social media,” “green building,” developing your “systems” and then, eventually, “salesmanship.” It’s my experience that negotiation training is rarely sought out, formally, by most contractors.
Why is this? Possibly because many contractors think they are pretty good negotiators already. Unfortunately, vast numbers of them aren’t. When we look at the wide spreads among gross margins and profits in our industry, it’s pretty clear that some contractors are much better deal-cutters than others.
If you know that your negotiation skills are not as sharp as they need to be, here are three excellent print sources of negotiating expertise.
Number one is the book On Negotiating by Mark McCormack. McCormack started one of the world’s most aggressive and influential sports agencies, International Management Group (IMG), with about $50 in his wallet, somehow charming Arnold Palmer into letting McCormack, a rookie lawyer, represent him in the early 60s. I predict that you will learn more about negotiating from this book than you will if you read 50 others. It’s masterful.
Then, pick up a copy of Relentless, the Ted Rogers autobiography he published in 2008, shortly before his death. Whether you love or hate Rogers as a company, you will be amazed, if you read this book, at Ted’s unorthodox and creative methods of cutting deals that he had pretty low odds of obtaining. Ted’s secret, he said, was that he knew that he was never going to be the smartest person in the room. So he decided to be best prepared person in the room – especially where a negotiation was about to take place.
For negotiating advice from contractors just like you, we think you will enjoy reading Rob Blackstien’s article “The Art of the Deal” in our upcoming September/October issue. (Digital edition up next week!). Rob interviewed eight of the top renovators and custom homebuilders in Canada, strictly on the topic of: “How do you negotiate?”
We think you will find it a profitable use of your time to read it.