Let’s get ready to Throwdown!
Welcome to the show everybody. We are back still working from home, as are most people. And today we’re talking about something that happens quite often. And essentially, it’s haggling, right, you’ve signed a contract, change orders happen, changes in the relationship. And sometimes it makes sense to pivot. Sometimes it makes sense to stand your ground. And then there’s there’s other components in play. And so I was dealing with some of this earlier this week, myself, and Clint, is working on it right now. So we figured it would be a good topic, because sometimes you have to go back and pick your battles. So, Clint, you were saying before we turn the recording up?
Yep. Sorry. Yeah. What’s, or stand your ground or stand your ground? Right? I mean, and there’s the decision that has to be made. So.
So Clint, you were talking about a change order on a project, and kind of getting beat up on pricing about it, and not to put anybody under the bus? But you know, can you can you give us like a high level overview for anybody listening?
I mean, yeah, I mean, this. So we’ll start with, first off is construction, this happens daily, on every single project you ever do, you know, everybody agrees, no change orders on these jobs. And in a perfect world, that’d be great. But the fact is, is you change scope, you won’t, you know, you can’t first see every single object. In construction, it’s impossible. As much as I’d love to say that all these new programs and stuff, these computer automated, you know, coordination programs that you use, are going to alleviate all those problems, they’re going to alleviate a lot, right. And they do. And, you know, if you have really good prints and blueprints, and you know, you can get everybody on the team from all walks of life, and you can put them in one room and go through how you’re going to work the job before you actually do it. You’re going to alleviate a lot of problems. But eventually somebody is going to get caught, you know, in it in a spot where, hey, this is not what we agreed to, right. And contract language and in construction, and I would guess a lot of other areas, contract language of what you agree to do, is hugely important, because that’s what you’re going to be held with, right? And sometimes the customer, in this case, right? will use that contract against you, when it’s your fault, right? And you’re asking for a handout. Hey, you know, I didn’t I didn’t quite get it all here, I need an extra $5,000. To get this done. They say Nope. In contract, blah, blah, blah, exhibit c line item 45. You stated this, and you signed it. So Screw you, buddy. Right, they say that to you. And the funny thing is, is when when you have to use it in reverse, right? Hey, you’re telling me you’re not going to pay me for this. But clearly in the contract, it states that you shall. You’re trying one you’re trying to navigate the problem with a customer that could give you future work or not give you future work, right. So there’s always that in the balance, right? Not to mention it might be at the beginning of the project is the product or the situation I’m dealing with today is at the very beginning stages of a year long project. What we do today sets a precedence on how we’re going to deal with everything in the future, right? Do you stand your ground now? And you’re gonna stand your ground the rest of the time, but you get paid this time, and therefore you set the precedence get paid for this stuff down the road? Or do you fold because it’s only a little amount now. And then you have a bigger change order and a bigger one and a bigger one, but they’re not going to pay it? Because it didn’t pick first one? So there’s so many situations, I could talk about this all day, you know, we’ll open this up for some discussion. But you know, essentially that’s the thing is, how do you deal with these situations when they arise the pick your battles, sometimes it’s worth it, right? Sometimes it’s not worth the fight. It’s not even worth the paper that is printed on to talk about, just to get through it and make everybody happy, including yourself, right. So yeah, this situations happens. They happen every day in all walks of life.
So So Clint, do you, I mean when you sign a contract? I guess my first question is, and you know, you like you said the principal drawn up and you guys start the project. I mean, is that a binding contract? I mean, that hey, okay, so we will sue if we don’t complete and follow this contractual arrangement to the to the end.
Okay. So that
way, I mean, that was my assumption.
And, and, you know, depending on, and that’s where it gets hairy on. You know, if you’re, let’s say you’re an officer at a company, you’re a VP or president or, you know, CEO, CFO, and you send an email that mentions that contract and you you know, you just happen to have to say Oh, don’t worry about that. We’ll handle it. Just Just forget, disregard. That is now an amendment of The contract whether anybody wants because when you go to litigation, or arbitration, that’s all going to be compiled, all those documents are going to be compiled. So one, you got to be careful what you say, right? If it’s really easy to skim through 100 page contract and miss a few lines, just sign and say, Well, hey, we’re buddies, man, we’re good people will treat you right, you’ll treat us right. Because, hey, people do it every day, right, and they get away with it. 5, 6, 7 times out of 10. But man, when you get caught, and people really press it, and to be honest with you, it depends on who you’re working with, right? If I’m working for a company that has 300, project managers, and I work with three of them all the time, but I get to that fourth one, that’s a stickler on contract language. And he beats me up one time, he could cost me hundreds, or he or she could cost me hundreds of thousands of dollars. So it’s just always funny how it circles back, right? People hold you to stuff. And then when you need, you know, when the new, you have that golden tickets for it to work in your favor. They just act like it’s, you know, we’re not going to honor the contract. It’s like, man, and, and to be honest with you, the money that I’m talking about looking at right now is not worth sending to any lawyers to get involved because the cost’s a wash about the first four hours, right, for both sides.
But But you brought up a key point prior to us going on on, you know, live here is that, you know, this is millions of dollars. And you’re haggling over thousands of dollars. Right, right. You know, yeah, you’re, so when…
I always call it stepping over dimes to pick up pennies.
Yeah. Right. And so, which is a great analogy. I love that. So So how do you foresee I mean, do you spend a year living a death of a million cuts? Or? I mean, or do you just play it as it goes? I mean, is it a day by day scenario?
Yeah, you know, so there’s gonna be some, there’s going to be some hard conversations over over this over the next couple, probably next 24 hours for me. And there’s going to be some hairy conversations with a customer, right? That could easily just say, I’m never dealing with these guys, if they’re, you know, because he’s looking at it the same way. If they’re willing to fight over this 12 grand, or 20 grand or three grand, I don’t want to work with this guy anymore. Because I have another customer over here that’s never bothered me about that stuff. But for me, it’s about well, one of it is his past, right? So how many times has this customer burned you in the past? And is this an expectation? And, and there’s a couple different ways to look at it. I put factors on my, my bids all the time by who the customer is going to be? Because I know who I’m going in into bed with, right? So hey, yeah, the project cost $2 million dollars. Really, it cost me 1.75. But I put a quarter million dollars on there, because I know you’re gonna, you’re not gonna pay me for anything else that I do. So I’m just gonna put this factor on there. I call it the, you know, you call it the fudge factor or, you know, whatever you want to call it, but tection that’s, yeah, that’s, that’s one way to deal with it. Right? Or if you, you signed the agreement, I signed the agreement, we shake hands, we do this deal. But we’re going to do it by what you signed and what I signed and what we said we do, right? So and in this in this specific instance, they’re, they’re using anybody and everybody that can that they’ve ever talked to in our company to say, Oh, well, so and so told me he had it. And I’m like, Okay, well, it doesn’t really matter what so and so said, we spent three, three weeks negotiating this contract, right? And we went through line items on everything like Oh, dude, are you going to pick up your own trash? Yes, it’s a line. Okay. Yeah, we sign that? Are you going to do this? Yes, we signed it. So that it’s so detailed down to that point that now you’re going to use it against me on what somebody might have said six weeks ago, like, You’re crazy, man, you’re crazy.
So in, in the website, world, we so we were trying to be the affordable website, guys. And so because of that, we would tell everybody, hey, look, you know, let’s let’s figure out the scope of work. Let’s figure out what it’s going to make or cost to, like, make this happen. And then in every conversation, I would have to tell everybody, look, once you see this thing, you’re going to want to make some changes to it, right? And some people want 30 minutes to changes. And some people want four to five hours changes. And we don’t really feel right, just putting an inflated number and guessing on your behalf. So instead, we don’t factor in any time for changes. So any changes you want to make are going to be extra. Are you okay with that? And everybody was always like, Oh, yeah, sure. Absolutely. This is no, no problem at all. And then we get going and then because everybody forgets everything. They see it and they’re like cool, John, here’s what I want to change. Right, and then you have to go back in there. And well, we have an agreement that changes are not included. Do you want to handle this now? Or should we work on completing the scope and launching this thing? And then we can do it later? And a couple of times, we had a couple people who were like, you’re nickel and diming me? It’s like, Well, wait a minute, you had other conversations before us. And you were getting quotes, you know, 10 to $15,000. We’re doing this thing for five. And I told you why it’s different in cost. So how are we nickel and diming?
You know, that’s a it’s a good point. Because the other side to think about it, too, is like, and we’ve said this on the show, probably 50 times, you have to look at yourself, as is the doctor, you’re the doctor in your field, right? What you do you do professionally, and what you sell, you sell professionally. And you would never go back to a doctor and say, I can’t believe he charged me for that, you know, outpatient visit, like, of course, he’s going to charge you this freakin job. And nobody ever argues right? In this instant, and what we’re dealing with this like contractual language, you got to look at it like this. You’re the lawyer in your field right now. Right? Like if I pick up the phone and call a lawyer right now, the clock is right in that moment. He answered it, right, the clock started, and I’m gonna pay for that stuff. So these things, these changes you, you pay all these people to write these big contract languages, everybody agrees you sign up the dotted line. That’s what everybody’s held to. Right? If you want something in there, get it in there. Before. Yeah, before you sign it.
The third day of boot camp, there was this guy and he goes up to the drill sergeant. And some conversation ensues, you know, in this in this kid starts talking about going to like airborne school and Ranger School and everything else. And then drill sergeant goes, is that in your contract? And he goes, he goes, No drill sergeant, they just said, If I was good enough, I’d get it. And he was like, You ain’t getting nothing if it’s not in that contract. So welcome. And, and I think about that all the time when I’m like, negotiating with people and stuff like this, because as I see, like, I really want it to be clear, I want to know what what like I don’t like ambiguity in any of my deals, like I get all that I will go to a pretty great lengths to make sure that everyone’s on the same page. But, man, if it’s not in that contract, and it’s not documented in some way, shape, or form, there’s room for it to get misconstrued. And it just goes all over me.
You know, my wife used to make fun of me all the time, because we would go to, I mean, I mean anywhere and buy something and they’d hand you this like, like in a, you know, you sign the lease for a house or something, they hand you this like 12 page document. And what’s everybody doing right? initial here, initial here, initial here, it takes you three seconds. And I’m like you just signed 40 pages of like over, you know, hundreds of thousands of dollars in in 30 seconds or less. And I’m that guy that like, kicks his knee up on the conference table and starts reading and everybody’s like, Okay, what are you doing? And I’m like, Well, I’m just let me tell you what that page says. I’m like, I’ll decipher what the page says. And my wife’s like, Oh, he does this all the time. It’ll take him three hours. someone’s like, Hey, man, I’m, I’m signing this, right?
Why not? Hey, there you go. There is nothing wrong with that approach right on either side of the fence. Because I’m in health care. And in health care. Everything’s predicated off of Medicare, I just looked at a contract here recently with my clinics, where we’re going, it’s an insurance company, and they it’s a Medicaid process. So it comes in under Medicare. So everything is medically you know, 95% of Medicare. So Medicare is the benchmark. But I live in a world where we don’t know what we’re going to get paid till we get paid. Right? In a sense of, I can send a bill for a million dollars to see you. And they say, here’s our contracted rate, right? And we’re small. Here’s what we’re going to pay you. And my recourse is almost nil, because to fight an insurance company is to fight a behemoth. And so you then decide do I do business with this insurance company? Or do I not, do I accept because now having said that CareNows. And some of these bigger organizations can collectively go in and say, Hey, we’re nationwide, or we’re statewide, you know, if we’re gonna be working with you guys. And so there is a brother in law deal. Not necessarily brother in law, but you know, power and might in size will determine what your contract looks like. And hospitals get that right, because they have emergency services. People would be dying if there weren’t emergency rooms, correct. So they have more leverage than a family practice does. And it is, that’s the tier that we do. And literally, we build two and a half times Medicare. I’m not ashamed of that. And then we look at our reimbursements. And currently we’re deciding Do we still want to stay on this particular plan and see this group of patients, and remember, patients come in and they have an insurance card in one hand, and problem in their other hand, they know a little bit about their problem, and absolutely nothing about what their insurance either pays for and does not pay for, because they got a book. Okay, that was the contract, they sign for the money that they pay every month. And sometimes these people pay thousands of dollars, and they have shit for health care. It is most f-ed system on the face of the earth. Now, having said that, I like Medicare because Medicare says hey, here’s your standard, we don’t deviate from it, we pay in two weeks. So when we start looking at certain plans, I mean, we’re busy clinic, I’ll take volume and certainty. Therefore I can plan cash flow. And I know what’s what what level I can how many employees I can put on, what kind of building I can rent, or own. You see where I’m going with that. But now, if you talk about Blue Cross Blue Shield, and those guys are going to come cut my testicles off right now. They’ve got 15 different deviations of their plan, right? And so, you know, literally, I my staff has to navigate through all of that. And it’s all contractual, hey, you know, they’ll waive a piece of paper, so that there’s health care for you. And the dilemma there.
I mean, I go back to like something that everybody on this planet can align with what we’re talking about is like, you get a credit card, you sign the agreement, you apply for a credit card, there’s all that language right after so many months and so much dollars 22% interest, and you get your first bill, and it’s like, oh, how do I ever get out? Like, I’m screwed? How do I ever get out of this? Right? And it just, you can’t pay it? And here’s what happens. And like that you sign those things daily? Probably, if not, you know, at least at least a couple times a year you sign these things in your own personal life. And then, you know, like if you’re almost say, ignorant, because I’ve made them stick out 100 times. But if you’re, if you’re doing that in your personal life, you’re damn sure gonna drag it into your professional world. Right? And, and it’s the consequences are just as bad, if not worse.
You said ignorant, I think is that we’re trusting that somebody said something, and that we can use their verbiage. And there’s where salesmen go off the rails all the time. Right? We tend to be, first of all, trying to make a sale. And second of all, thinking that this company, I’m dealing with somebody fairly high up in the company, I’m not talking to the receptionist. I mean, I did talk to her and I was polite, and I got back to the decision maker. This guy carries a VP title, or he carries some kind of stature. And he’s making me promise. Okay, what does that really mean? At the end of the day? If like, you say, Clint, it’s not in the fine print. Yeah, I mean, I mean, yeah, contracts are key.
They are, they are key. And even to the point of, you know, medical commercials on TV, the ads on the radio, right? When they do that, like, one and a half times speed on the all this stuff that they, you know, include exclude. And, you know, people would call it a trip. It’s like, hey, if you take this pill, it will absolutely cure, you know, your psoriasis, but you’re gonna get fucking life threatening diarrhea, vomiting, you know? Right,
exactly. It’s a disclaimer at the end, right? Yeah, take your life. Right. And it’s like when the grave.
Yeah. And when and when you’re when your spouse takes it, right? And they die, you want to go get you want to sue somebody that’s like, Hey, dude, I told you, if you took the pill, you die. You know what I mean? And it’s so easy for people, big corporations to just throw all that shit at us little people. And, you know, you got to be careful, what you what you set your precedence out of what you’re willing to accept. And that’s when it’s, it’s tough.
To go back to a nugget that like Al dropped a second ago. Right, which, which I think there’s a there’s a very quick overlap to how we all kind of talk about selling, you know, Al said that he would take certainty in volume over essentially hope, right, you know, hoping, hoping that he gets paid at close to what he bills at, hoping covers bills, because God knows when it’s going to come in. And here’s the deal. I I see people on Facebook, right people who I follow him in certain groups in there, and they’re putting out the same advice. You know, like I was talking with Clint, that this guy was saying, you follow up with somebody forever and ever and ever just in case you know, they can buy originally or eventually and it’s like, well, that’s an option, right? If you want To spend forever following up with someone in the hopes that they’re going to have money, eventually, you can do that. I want to go spend time where my chances are high. And I’m going to talk about money early. So that way I don’t get into a situation where I qualify, and then I pitch and then I propose, and I do all of this stuff, and then get told that there’s no money, and then I feel obligated to follow up because I’ve fallen into the trap of investing too much time with somebody who doesn’t deserve my time.
Yeah, that’s it. But you’re, you’re he’s not. No. So there’s some truth to what that comment is, right? Let’s get that out there. Because there is some truth that if you, you know, if you throw somebody out to the trash once, because you didn’t like the situation, or, or, or maybe they, they promised you something. And so it’s like, screw those people never talk to them again, which is a very big tendency of myself and and most D’s, right, and screw you, man, I’m done. I’ll never talk to you again, you make those big, bold statements, well, hey, you’ll never get any business. And I mean, that’s a fact. If you ever try, you’ll never get right. So but there is a fine line the other way. That’s, that’s extreme one way, let’s go extreme the other way of, Okay, I bid 600 jobs, this person, they’ve never had the money, they’ve never had to do it. How long? Are you going to continue that? And and the other thing is, too is? How many other people do you have in your pipeline that fit that description, right? Because eventually it becomes compounding numbers and how many people these can have, there’s only so much time in a day. How many people do I put on my team to take care of these people that never give me any work? So so there’s a little truth to the statement of if you if you know if you quit following up? Yeah, you’re right, you’ll never get a job because you quit following up. But there’s also the other side of the equation that that is the untrue side of what he said if you can’t follow up forever, right? Because, because if you never get any work, and your hit ratio is at 1%, because all you have is those type of people, I’ve got to hire 30, 40 people on staff just to keep up with getting those all day long. Like, that doesn’t make business sense, either. So, you know, I’m not shitting on the idea, but I’m shitting on the idea. You know,
I think it’s a I think just like with any other piece of sales advice, and most advice, in general, there’s a slippery slope, because depending upon your perception of and how you want to take that thing, then you run with the ball and right, you know, and I was saying that, that if your follow up is mostly automated, right, you’re going to put them into some sort of like long term nurturing sequence that’s just done by email, you don’t really have to do a whole lot of hand holding, I’m totally fine. But like, I want to know, super, super easy and super early. So that way, I don’t have to spend more time with you. And then also, I have found that it’s a lot easier to get back in front of these people when I have another offer or something else to like, talk to them about. whenever it’s like, cool. Let’s close this. If I see something else, can I come back and talk to you about it? Absolutely. You know,
And you know, it’s funny, because to that point, when the slippery slope side of like contract language to our points earlier, like, you can get into some slippery slopes of how you set the precedence of Okay, I I negated the contract today, but I’m gonna follow it tomorrow. No, once you once you disregard contract language, it’s pretty hard not to just, you know, for them to use that against you down the road. That’s that’s one thing. You know, the other side of it, too, is like, how many people do you know you reach out to? And they tell you no, no, no. And you keep bidding them? You know, you keep you keep trying to get that same answer. And you don’t ever drop them. You put those in your pipeline in their hopes and dreams. And we all I mean, I hate hopes and dreams. So you can’t bank on any of you can’t forecast it. I even tell some of my vendors that will bid me every job that we bid, they bid me they’ve never want anything. And they say man, how do we how do we get business with you? I’m thinking, Man, I’ve told you 100 times, like, your pricing is so far out there from the other three that I get. Your scope doesn’t match. Your pricing is out of order. I even asked him why are you Why do you even bother? You know, like, seriously? I mean, like, of course, I’m going to take your bid, you’re giving it to me for free? Of course. I’m going to take it of course I’m going to compare it. But honestly, like so I have a quick call me.
I have a question, Clint, then who do they sell to you? You seem reasonable. I know you in in a couple of different capacities. So how does that business stay afloat?
I think they get, I think they get lucky. You know, I think that they get somebody that that doesn’t get the other bits, right. So they’re the only one to compare themselves to. So it’s like a this is what it costs. Would that’s just not how we do business here at the company I work in it’s not how I run my team to you know, we don’t just get we don’t just take somebody’s word for it all the time because…
That’s shocking that anyone does.
Well, well, but they do.
Hey, when I when I first got here, we didn’t get bids on anything. We just took knowledge off other jobs and said hey, We’re gonna just bid this $4 million project with hopes and dreams and fields and hope it all works out. And sometimes it did. Sometimes it didn’t. So, you know, is that clear?
Then? Then I, I have a question specific to just what you said, when you got there was it that they didn’t have a clear cut process to deal with a consistent approach to every job that they bid? No, meaning, I’m assuming they didn’t,
it was a it was the fact that they couldn’t get it because everybody, everybody had pissed off the good people. And so they just said, I’m not going to these guys anymore. And it wasn’t anything to do with. So our process was kind of screwed up, there was a there was a kink in the in the chain, or the armor sort of speak of how our processes went to where our beginning, our pre construction department could gather quotes and get all these promises from people, we’d win the job, we’d Hand it over. And when we handed it over, those people had all the authority to negate all the deals that we had made to get to that number, and they could go, you know, essentially buy from whoever they wanted. So when you do that to people, enough, people get pissed off. And they said, Well, I’m not ever going to bid this to you again, on bid day. Because when you get it, your people that you hand it over to are just gonna use their buddy. So yeah, that was that, that that is the thing that we change, right? It’s like, you know, during our turnover, it’s like, okay, who did? Who did you use? How did you get to this number? Why did you get her number? Why did you guys use these and so that, but you got to have somebody there to explain all that. When you do that. It’s like, Hey, I’m handing this over to you, knowing that I use these guys to get to that number this, hey, buy this out all day long, because they were so close, it doesn’t really matter. Hopefully, you get a good deal. But on this, you know, this portion of the bid, you have to use these people, because we wouldn’t have got the job without these people. So I pushed my prices…
So forego your Did I hear you forego your margins, because you’re going to have to use some more expensive. Exactly. So tractors to get a better job done.
Exactly. I’ve essentially done all the work for you. Before it gets to me turn it over. I’ve The reason I got this price. And the reason I got that job, because we’re in a bottom dollar take, we’ll take whatever the lowest number is market, that’s the market that I’m in. And so you know, I’m constantly cashing in favors, and hey, we’ll get you on the next one. But I need you to do this favor. And you know, it’s just, it’s the world you live in. And it’s the market I live, it’s not the business I like to do, but it’s the world I live in. And I guess, you know, we’re all surviving. So, especially this year, right? It’s not, it’s not the way I do business in a normal healthy year, but it’s the business that I’m doing right now. And it is what it is.
Nan, you’ve been super quiet.
Well, I just don’t have a I do have clients that I have to have a contract with. And, you know, Clint made the statement of 90 pages, probably my biggest contract is 20 maybe, and it’s pretty simplistic, you know, there’s not a lot it’s not very complicated and what they are going to read and have to agree to. I have had times that a client will change not necessarily asking for something different than the contract is stating but they you know, this really isn’t working we in this way can we do it this way so I have to implement you know, a different alternative. And I you know, the reason I haven’t shared is it’s that simplistic that you know, I just offer another alternative and I don’t do that until I’ve let a lot of thought and time go by so that you know it sounds like Clint especially has to pretty much be on task continuously with what changes they want. I don’t really you know, I can go Okay, let’s slow down here and think about it. And it’s just that simplistic I think it constructions really, I mean also i’m not i’m not dealing with you know million dollar deals here either so…
Well but they sell yourself short because Nan has million dollar accounts though.
Well, this is, don’t get caught up on the money side get caught up in the percentage side so you know if $10,000 is you know 30% of your thing and that’s what you’re willing you know denying to pay you then 30% of big freakin deal man. You know 1% 2% I don’t know what’s the big deal on whatever whoever’s market so don’t get caught up on the money get caught up on the percentage what it means to your project. So for me in and i’m not i’m not trying to shit on But like, I look at it like this, if you sell a $4 million job, maybe you’re making 200,000 in profit, like strictly if everything goes right, perfect world over a year, so divide that shit by 12. Or maybe it’s 18 months, oh, it really starts to get thrown. Right? So if you do that more than you do, if you divide 200,000 by a team, and now somebody is wanting to screw you on $12,000, they just took a month out of your profit margin, right? They just took it off, you just lost it. So now, that’s how I always look at it. Right?
So in, if you put our two situations together, as you were talking about that this $12,000 pullback, basically, I was thinking, you know, just instead of seeing it direct, that’s why I brought up the alternative thing, like, you know, just having that in depth conversation with him like, or does that not just happen? I guess that’s just how I, I feel like I deal with any kind of controversy in with my clients is, I never just go What the hell are you talking about? $12,000? I’d be like, okay, now, you know, but maybe you can’t do that in construction. I don’t know. I just and maybe that is because I’m an S, I’m just like, you.
So. So based on something that like Nan said, right there. I, you know, there’s the other side of precedent, right. Like, like, as salespeople, we know that this stuff happens, we know that people like want to beat us up. And sometimes it’s malicious. In some sense. Sometimes it’s just a lack of,
Because they can, you know, I mean, it’s bad that they can, but they can.
Okay, so Clint,, you know, how do you know that it’s a situation where they’re where they’re not just misunderstanding, and just like a really good conversation gets you through it?
So So I mean, like, to me, that’s step one, two, and three, right? You try, once you try again, you try third. And if they’re still not getting it, like, let’s just revert back to plain English language that’s on paper. You know, like, if you’re not trying steps one through three of dealing with it, you know, before it drags other people in because, you know, to be honest with you, my next phone call only goes one way, it’s either we hash this deal out, or it goes up the food chain. And when it goes up the food chain, the first thing that happens in a publicly traded company is What are the lawyers is going to say?
When I never ever ever wanted to get to that because because I could be wrong, right? I could be wrong and everything I’m saying, and we get caught at fault, right? I hope that I’m not but I’m not a lawyer either. And I’m not I’m not all these contracts are written by lawyers for lawyers. I’m not a lawyer, I’m trying to decipher this shit as much as the guy on the other side of the fence is, too. So we’re not lawyers, we we don’t understand that. Certain languages, you guys have seen those. So when it does go up there, and I get made a fool by letting you know, I didn’t, I deny all this stuff. And we’re Yeah, let’s let our lawyers hash it out. That’s an easy statement to make. But then when you get caught a fault, it’s not a fun situation, either. So you try to resolve it peacefully. 100 times out of 100. And then it gets to a point where it’s like, Guys, you know, I know I’m right. I know that this is wrong. I know what you’re doing is trying to screw me. I have backup to prove it. And I’m going to handle this stuff over. And let’s let him dig it out in the trenches, you know, I don’t know. And, and so, yes, step one little step at all, even I’ll make it extreme step one through 50 is resolve this shit peacefully, just
But did, Clint, Do you think that we’re in a new error of this kind of haggling scenario, because everybody has this whole slowdown in the economy. And we’re all…
Nope, people are getting work in this economy, because they are the lowest price person, you are getting work because you probably miss something, or agreed to miss something that eventually in construction is a prime example. Like, you know, let’s say we we agree to do a job for a price that we would never have done a year ago. Eventually, everybody forgets that right? So I have to constantly remind Okay, and this is why we have a lot of procedures and and sign offs on when I bid a job at let’s say 10% profit, whereas last year, I would have been at 20. And both scenarios I could have got but this year is tough, right? But then that job goes on for a year. So now a year later a year from today, October 2021. My, my my CPA comes to me or my CFO comes to me and he says hey, we’re losing money on this job. We’re not making what we should be making. Well, yeah, if you remember, a year ago, we were a lot hungrier right. And this isn’t a healthy year, because if 2021 turns around like, I think it will. And it turns around, you’ve sold a bunch of jobs in my industry that are going to happen in the good year. Right? And you’re going to forget what it was like to suffer this year. So you know that that plays a big factor of Don’t forget, you know, and that’s why contracts to me are so important. We signed up for this for this job. And we need to put everything that we can down on paper, as much as I hate paperwork and signing contracts. You have to, it’s just liability. And you have to cover your own ass, because everybody else out there. And and I’m not saying everybody will, but every you have to treat everybody like they’re, you know, trying to screw you.
Potentially going to Yeah, potentially going to go this route. Right. Sure. And and I think there’s a take home message in what you just said that you have to be hoping for the best but preparing for the worst. And and the way you prepare for the worst event is to have an in writing, right? There’s your defense in so many cases is here’s the black and white that we both sign up. Now, we were all getting along, going along getting along, and then it hit the skids. Because you either got fed up or I got fed up with, like you say death of a million cuts. And it got a little egregious and we couldn’t work through this, you have to be able to have a piece of paper that picks up and solidifies what was expected out of both sides of this equation. Sure, and then decide, is it we’re suing each other over it? And if it’s not, and I don’t be afraid to say, you know, is this gonna be litigation or, because remember, that’s not an idle threat, because I can get an attorney, you can get an attorney, John can get, you know, we all go get an attorney. The question is, do we want to spend the money to let the courts decide what we should probably try to figure out here now,
You know, what’s funny is, is nine times out of 10. In my business, you know what the lawyers say? What can you guys settle on? What can we all settle on?
Oh, you don’t know how many times they’ve like have you just like picked up the phone and tried to talk this out, and I’m all pissed off. And
I literally tonight, you know, before we got on this, I’m talking to one of our project managers, you know, and he’s telling me, he’s telling me the situation that I’m gonna have to deal with, you know, first thing in the morning, and my first question, and I didn’t read any documents, I don’t know anything. All I know, is the sum of money that everybody’s fighting over. And I said, what are we willing to settle with? As my first question? It’s not saying I will, but I want to know, what are we right to settle with, right? Because if this goes up the food chain, the very first thing it’s going to happen, we’re gonna pay 60 and they’re gonna pay 40 or they’re gonna pay 50 we’re gonna pay 50 that’s what’s going to happen. Nobody’s going to get paid 100% so why can’t we do this now and just say, Okay, do what do you guys want to see? What are we willing to eat to make all this shit just go away. But you got to be careful there, we’ll set the precedence to to know that everything is not negotiable. Right? So like, there’s, there’s a man every I would say this. Every situation about what we’re talking about, has so many factors that are factors on who you’re dealing with what you promised who you are as a person. It deals with the company, how much potential do they have to give you in the future? Do you even want to work with these people anymore? I mean, the list goes on, I could write 50 things.
Ultimately, it is negotiating from the littlest contract. You know, this this evening, I got a flu shot and I had to sign I had to answer all the questions that I had to sign and date for bloomin flu shot, right. But but the clinic that you get the flu shot needs to be protected.
Hey, hey, hey girl, that’s my clinic and damn right, we need to be protected. Crazy girl like you go out there and claim her arm swell up, she had to cut it off at home and then she’s at the emergency room. Left the arm in the freezer, and she wants compensation. Hey,
Hey, when the broke when the broken needles still stuck in the cutoff arm in the freezer, it’s kind of hard to deny.
Hold on. Wait a second. Not my needle. I don’t know what you’re talking. Yeah, sure. Show me the serial anyway, serial number.
So anyway, all I was saying gonna say is it’s a contract is just the guidelines for negotiation right. So, the problem is that we are
That’s a good saying actually yeah,
We are in most cases, the person at the mercy of the person that is buying from us, right? That will right and so we want That right? But what you said a few minutes ago, it ultimately is a negotiation should be a negotiation. And there should be for both people the benefit. So exactly what you were talking about, Clint, you, you don’t you’re not at someone’s mercy even if you want the sale you should never be at the mercy. So just think of it as a negotiation and go in there with I mean, you already know all that but it it sounds so terrible that we’re the sales people and that we’re at the mercy of our client because they’re going to hold us, you know and threaten us with they’re going to their lawyer well, oh, well, you know, and I know we need the money because that’s part of our that’s our job to get the money right. But it’s it’s, you
know, jilted lovers out there. Bunch of jilted lovers.
I was totally expecting her to be like taking the approach of well, it’s okay, because we’re the ones who want the contract and wants the money. So it’s okay for us to have the pressure but she’s not going that way. She’s D-ing up, I like it.
She comes in late, but man, it’s impactful.
No, no, that’s not it at all. We had to we had to put down a deal earlier this week, because this guy, you know, we were going to come in and handle sales and marketing for this company. And we were he kept trying to rush us onto the phone. Hey, like, like, when can you guys start taking calls when you start taking calls? And it’s like, well, after the paperwork, right, I’m not, I’m not taking calls for anybody else until I until I know what the terms are. Then we had all these conversations about like different levels of equity and commission and stuff like this. And every day, it was changing, and changing and changing and changing. And so then it changed again, and I was like, guys, like, like, we need to just put this down, because as of right now, these guys don’t think that they need us. Right. So so we’re being treated like nice to haves, right? I don’t think that they can, you know, hit these numbers without some some serious help. So, you know, look, let’s go find something else. And the other two guys are really invested in this right? And so now they’re No, we can save it, we can save it. If we do this one, well, the other ones are going to go better. And I was like, why would they give us more next time when we were okay with not as much this time, right? Because like, you know, they’re talking about doing multiple projects. And they’re like, well, because if we kill it, and and I said, Okay, ask me for more money. And he goes, he goes, Well, we’d like a little bit more on this one. Well, you did it just fine. Last time without that much. Why should we change it? Now? You guys, you guys know.
So I’ve been in that situation. And when I deal with a manufacturer, right, they make a particular widget that I’m going to go ahead and sell in that silo. My first conversation is, today, we’re going to work on these margins. If I meet the benchmark, and we’ll make sure what that benchmark is never, I mean, it’s okay to concede in the beginning, I’m not sure how much of this I can sell. But if knowing my trends and knowing my industry, if I meet this benchmark, right, you’re gonna owe me more money from this point going forward? Because we’ve got a good thing going. And at a certain point, if I can’t sell it, then it won’t matter. Either way, we’ll know. Right.
And I have a small point to that, you know, I think we’re dealing with a lot of stuff or how you treat your customer on project one, you know, sets a precedence for Project 10. Or, you know, and I will tell you, I caution you on this, because, as a as a person that manages a sales team, when somebody tells you, we’re going to do this project for cost, because we’re going to get 10 more, bullshit. I mean, because I mean, because the reality is, is like, I just don’t do I just don’t work personally and professionally that way myself. But why do I have to do this at cost for you now? I mean, you you want me to do the next 10 projects, I should be a valued customer. Why are you asking me to do this for basically free? And if anything goes wrong, I’m going to lose money. And then the thing is, is, so we agree to the one, right? And then on the next one, you set the precedence to say, Well, you did it for this last time. I want you to do it for this again, and you’re hungry again. Because it’s a bad year, you haven’t sold anything. So you do it again. Right. And Project 10 rolls around and guess what? You ain’t sold nothing that made any money. That’s tough.
So So Clint, I you just sparked an analogy, you know, like you go to Costco, and they got a little sample guy out there. You know, he’s got the little tray of the little tasters, right. It’s okay for a taster to be like at cost right or a loss leader. Sure, but don’t call it a whole freakin meal. Because no, don’t give that away for free, right? That’s right, you know, you get the little blue little cup that you get the taste. But the rest of it you pay retail for right?
It doesn’t hurt to be kind, but you don’t need to be generous, overly generous.
Or you don’t have to be free either. You don’t have to be I think it’s really so yesterday,
I met with a client that a year ago. And I gave him the contract. Here’s how we’re gonna do this. And they were like, Oh, no, no, no, we can do it on our own. And I’m like, Alright, cool, you know? And, you know, I still have a little piece that I do, but it’s not huge. And each time I go in, they’re like, Well, now, what do we do about this? And I said, Well, you know, that’s, that was the original contract that I was going to help you with that. And I would, you know, whatever, facilitate this and facilitate, you know, I would have a game in this. And each time, they’re just complaining, but I ne-, I’m done. Like, I never say anything. I never give any advice. You know, I’m not here to not be paid for giving them advice, right? Yesterday, they were like, Man, this, this is really difficult. This, we need to know. And I said, Listen, I gave y’all a contract, we can open that up again, look at it and see how to proceed. And they went, Yeah, we might need to do that. Because this is not working. And I’m like, Alright, so you know, to Al’s point, I think also I think we’ve all said it, it. It’s not a matter of just being a complete jerk in the beginning, you know, and gone. Alright, I’m done. So, so I kept working with them. But I’m not what what did we always say to Al? I can’t remember but free counseling like if you he he’s so knowledgeable. So everyone’s constantly To this day, people. Surgeons? Yeah, just like, tell me tell me what, and I’m just sitting there. Like,
here’s what you do with free consulting. And I hope I didn’t offend anybody, but tell him to F off man. Nothing’s free man, I like the electricity up here costs money, right? And well, everybody knows that.
So I do have a little nugget because I run into the free consulting thing. We’re probably getting a little bit off topic. But here’s something you have to ask.
Hey, real quick. Let’s do let’s see the Throwdown real quick. Because we’re because we’re 45 minutes. So we’re gonna go around the quick, around real quick. Let’s start with Clint, nuggets, takeaways. haggling?
Oh, yeah, haggling, you know, the way. The way you start the initial contract or dealings with somebody, you’re literally setting a precedence for how you’re going to deal with forever. And it’s really tough to get, you can change it, it can be changed. But it is not as easy as doing the right thing up front. Doing it the way you want to do business up front that will follow you and they’ll know, this is why this guy does business. And don’t forget you you should be in charge as a salesperson with any situation of anything you sell. You are in charge, right? So how you how you present that on day one, is how everybody will look at you on day 30. Right. So just just the, you know, how you set the precedence is huge. And as a D from from our corner, right? That’s usually not a problem. But don’t forget that people also look at your personality of how you present that deal. So don’t come off too strong don’t come off too. You know, abrasive, watch those tonalities you know, no knife hands in the face. Don’t be kicking him in the shins, that kind of thing. You know, how you deal with those people on day one will follow you forever.
All right, Al, I’s healthcare, what you got?
Well, you know, for all the I’s out there, you guys will get bogged down in a lot of conversation that gets you nowhere, sometimes you got to you got to cut to the chase, you got to stick to the process. You don’t cut price to get a deal done, you stand on the work that you should be doing. And you work through this equation. And every time that you have to take your process off the rails because of a haggling issue, you’re losing money, you really are your margins are going out the window because the time and effort that you’re having to spend on correcting a problem or giving a concession that either the other side is going to come your direction you’re either going to figure it out or it’s going to get go to litigation, right. So get to the point where you got to make a decision and you got to move it forward. In anything in between the sideways shit is just, it just sucks money out of both sides of the equation.
Awesome. Nannette, for S’s and also healthcare, any takeaways?
So I just think it’s really important that you at the beginning state what is expected on each person side? So there’s no unmet expectations. I think unmet expectations are usually no one had a clue what it what it was. And, you know, that’s the reason for a contract. And so it seems like, um, but that’s easy for me to say, I think with my contracts, but with Clint I get when you have like these multiple, you know, just pages that go on forever, and just nauseum. You just people can’t it’s hard to negotiate, I think, but I think that it has to be upfront, just upfront. What is everyone wants?
Awesome. Um, for me, the I think the biggest nugget I have about this is when when you kind of figure out your process, right, you know, your margins, you know, what makes sense, you know, what doesn’t, and then there’s always going to be extenuating circumstances, right? The relationship and the potential of other deals, right, if you’ve been treated well in the past and stuff like this, but when you put in the time, and you really kind of figure out, like, what’s acceptable and what isn’t in a non emotional situation, it’s a little bit easier to like, stick to it, when when emotions are high. The the other side of that is, like, as a C, I tend to be very black or white, it either makes sense, or it doesn’t. And there there are days where I get on my high horse and I go die on the hill that I don’t really need to go die on. But the the thing that’s really important is like when you make a decision, you got to like, stand by it and like own it, right? Don’t Don’t apologize for you know, killing a deal because like the terms don’t match up, because you’ve already decided that they don’t match up, right? Like, like, live that and go figure out who else you can go talk to you and go find out the next deal. Because for a long time I was I was too, too willing on certain deals to make exceptions and not willing on others. And it just kind of drove me crazy. And it was largely because I was I was emotionally invested in some deals and I wasn’t another’s so awesome, guys, this was a good discussion, right? Because this is stuff we all run into in different various formats. And, you know, you got to know what makes sense to stand your ground on and what makes sense to give a little bit of ground on so I hope this was helpful. It for anybody who’s listening. If you know someone else who’s in sales, and they’re struggling, please share this with them. If you have a question that you’d like us to talk about, or a situation you would like our unique, awesome expert advice on Send us a text, 817-345-7449. We will talk about on the show we can keep it keep you anonymous if you don’t want your company or you know anybody getting upset. If you’re watching this on YouTube, please like and subscribe. It would be huge. And yeah, go out there. Right. We’re finishing up the year so finish strong. Get your planning done before January and yeah, we’ll see everybody really soon next week. Cheers.