BEST PRACTICE // Negotiation
The art of negotiation A useful skill to have in the current climate. WORDS Ken Burgin SUDDENLY, WE ALL have to do a lot more negotiation, and it’s not just the small stuff.
information gives you time to assess. • B ack up every phone call with an email
Three months ago, you were arguing over a
outlining what you understood was agreed.
20c increase in chicken prices or the chef
• Never give anything away without something
wanting a $30 wage rise. Now you’re dealing with a stubborn landlord, an unknown bank manager, impatient suppliers and an impatient partner.
in return such as an extension of the lease or help with refurbishment in exchange for paying more rent than you anticipated. • The first offer has more influence on the
Most of what you did before was haggling,
final deal than any other factor, so plan and
but now it’s time to up the ante.
make it carefully.
Negotiating with landlords is a good place
Mero on the first steps of rental negotiation • Preparation and planning are two of the most important components of a negotiation. Without them, you negotiate with force, threat or bluff, which is not desirable and can break down the communication. • Understand the other side — what do they need? What is the landlord’s financial position, or if it’s in a shopping centre, what are they allowed to offer? • At the beginning, create the right atmosphere. Communicate your position and learn theirs. Asking questions and gathering 12 | Hospitality
landlord immediately. • Crunch the numbers and make a plan. Be ready with up-to-date bookwork — your sales data, P&L statement, bank statements, etc. • B ack up your argument with honest, transparent information. • Do all that you can to meet your current rental obligations. landlord and look at it from both sides.
financial return if you get it right. Julian Mero and business broker Paul Leach.
• Act quickly and communicate with your
• Work out what help you need from the
to start, and is likely to give you the largest Here are some tips from leasing executive
Leach’s advice for negotiating
• Don’t take “no” as being final — it might be
“Preparation and planning are two of the most important components of a negotiation. Without them, you negotiate with force, threat or bluff, which is not desirable.” – Julian Mero
the start of some serious discussion.
Common mistakes to avoid • Rushing; the person with the most time pressure has the lower hand. • Letting price dominate all other interests — there are other concessions that may be worth more than just a rent reduction. • Neglecting the other side’s position or problems — the landlord is not a demon! • Searching too hard for common ground to make the deal happen. • Neglecting your ‘walk away position’ previously set — if it looks like you were bluffing, you immediately lose leverage. Buckle up — you’re about to save yourself quite a lot of money! ■
