Shedding The Status
To an entrepreneur, what’s the difference between a vice president, a director, a general manager, a partner and a chief? Nothing. When creating your corporate governance and management structure, keep this in mind. A job title is nothing more than a tag line on a business card and an email signature. However, job titles in general are one of the most important elements when going into negotiations.
The Multi-Hat Advantage for Entrepreneurs
As a start-up, you are free to label you and your initial employees whatever you want. This means you and your team can virtually be any employee of the business. In essence, you can construct a much larger business in the minds of prospective clients, companies and the public. Do you think the CEO of your competitor is going on sales calls? Probably not. But the senior account manager is. Swallow your pride and shed the founder label. Become the account manager on sales presentations, the director of marketing when buying advertising and the vice president when negotiating for better insurance rates.
Why is this so important?
The most important negotiation tactic to expose upfront is higher authority. And what better way to make the other side assume you have little to no decision making authority than by lowering your job title. When you become a mid-level employee, you shed the start-up stigma and create a virtual chain of command. This allows for constant supremacy on your side of the negotiations. For example, what sounds better?
You: “Oh this is for six months. I am not sure if I can manage that. Can you do better?” Them: “Take it or leave it, we have spent enough time on this and you know you can sign off on it.”
You: “Six month contract? We were looking for a nine. I am going to have to take this back to my boss to see how we should proceed. It’s unfortunate, as we were all looking forward to this and as it stands, I don’t think they will be inclined to sign off on this.” Them: “Ok, I guess, let me know what they say and get back to me”
Watch The Counter
An experienced negotiator will prelude any talks with the question:
“If everything here is to your satisfaction, are you able to sign off on this today?” (Or something to that extent)
This question will expose you as the decision maker if not handled correctly. The good news? Most people don’t know to say this. But if they do and throw this line at you, there are counters to the counter. The two that have worked the best for me (and kept the talks flowing) are:
1) Admit to having the ability to sign off on the deal but eventually finding something ambiguous, overpriced or faulty with their terms. You will be able to go back to the beginning and throw another decision maker in the mix. And without much push back since the talks have gone in a new direction.
2) Create a committee. It may be you and an absent partner who is unfortunately never available to talk. Or a vague oversight group that may consist of only you. Either way, by creating an advertising committee, for example, you are allowed to hear what they have to say and relay the info and pricing for review.
By being a mid-level employee, the need for higher authority approval is much more believable and easier to pull off. Does a CEO or President have to ask permission to buy a $2000 service? Not usually! (besides the Board of Directors, I guess) But an office manager probably does. And guess what supplier? They didn’t approve anything higher than $1,800 – what now?
Good luck managers, I mean entrepreneurs!