CHAPTER 17 - NEGOTIATING YOUR BEST DEAL
First learn to say NO. Now you're ready to
negotiate. Most Entrepreneurs approach the issue of negotiating with great stress and
anxiety. This leads directly to weak negotiations or becoming defensive about being asked
too many questions. Either way, you lose! In order to avoid this happening to you, make
sure you have clearly defined what you are looking for before the negotiations begin.
- Determine which points are worth fighting for.
- Express your objections and questions to any point.
- Get it in writing, leave nothing to verbal agreements.
- Subject everything to your long range goals.
- Pay close attention to what triggers default.
- Establish ceilings and caps. You don't want to be stuck
paying huge payments if rates go up.
- Plan for the downside. Attempt to have an "interest
only" clause or "skip payment" provision in the event of slow downs.
- Look for no pre-payment penalty or the right to buy back
your stock at a fixed price.
- Pay attention to covenants, conditions, ratios, restrictions
or other clauses which can have serious long term effects.
- Try to minimize pledging collateral. You may need those
assets in the future to raise additional capital.
- Seek professional counsel before you sign anything. Lawyers
and accountants may not help you fund your deal, but they can help you spot the small
details that may burden you down the road.
Remember you are out there selling yourself and your company. Be a closer! Only
accept "No", as being one step nearer to "Yes". We sincerely
hope the material presented here will help you plan for your success and locate the
funding that every business needs. Good luck, in your search for funding!
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