Sep 16, 2019 | Business & Contractual Issues, Risk Assessment
Imagine you’re a practice
owner, and your practice currently has a 12-year history of consistently
grossing $1.5 million—and is actually on track to earn upwards of $2 million
this year! You have three exam rooms and three certified veterinary technicians,
and you’ve just hired an ambitious associate veterinarian to bring your total
up to three full-time associates, with plenty of support staff. Your practice’s
operations are clearly excellent and the camaraderie is there but, you’re
ready. You’ve decided that enough of your life has been dedicated to the
prosperity of your practice and you want to enjoy the remainder of your life
with your family. You have made the decision to sell your practice.
You
meet with an attorney, create your practice’s profile, and garner the attention
of many corporate consolidators (CC) and private contractors (PC). Prior to
entertaining any offers, your attorney asks you about your plans, including
whether you’d like to remain involved in the practice, post-sale. You respond,
“I think I want to retire altogether. I love my practice and my staff, and I’ll
visit from time to time, but I’m pretty sure I want to spend the rest of my
time with my family.” Your attorney then asks about the property and you are at
a loss; you thought that once you sold the practice, the property would be sold,
too. Your attorney informs you that this is not the case and sends you home
with homework to complete, something you haven’t had to do in quite some time. Now
you have to ponder about what you want to do with your real estate if you sell
your practice.
Do
you want to relinquish or retain ownership of the real estate?
This is the first
question that any facility owner who also owns the property needs to answer
because this will dictate what language will be used in letters of intent
(LOI). You’ll need to determine whether you want to retain the ownership of the
property and lease it to the future buyer or sell the property.
If you’re looking to
relinquish ownership of the real estate, then you’ll need to determine how and
when this will change hands—and if this is your plan, then the remainder of
this article will be purely informational. On the other hand, if you want to continue
to retain ownership of the property and become a landlord, then you should continue reading.
As a third scenario, if
you currently lease your property from a third-party landlord, then your
responsibility is to inform the buyer about your current lease’s terms and help
to facilitate the transfer of the contract from your name to theirs.
What’s
the composition of the lease?
Assuming,
from this point on, that you’re the owner of your property and you want to
lease it to the buyer, here’s what might happen next. Typically, the buyer will
present you with a drafted lease with their terms—which likely represents their
interests—and you will have to negotiate from there. Since this will be a
steady stream of income for you, we’ve provided you with information to maximize
the revenue you’ll receive.
For clarification purposes:
“Buyer”/“Tenant” = Buyer of your practice;
“Seller”/”You” = Practice Seller & Property Owner/Landlord
Lease
Terms & Renewals
When
discussing the value of a lease to buyers, you’ll have to think long term,
literally. Most buyers, especially the CCs, express interest in having an
initial 10- to 15-year lease to retain a firm grasp on the practice’s property and
to ensure longevity. This may differ for PCs. You could add more value to the
lease by giving the buyer options to renew at five or ten-year increments. This
assures continued operations for the practice, allows for early renewal
negotiations, and makes it easier for you to refinance the property, if need be.
Now, depending upon your terms, you should determine how much you will charge the
buyer for rent. Typically, rent is calculated as the sum of the base rent and
additional rent, but you should also consider the valuation of your property. That’s
because the fair market value (FMV) of your property may help to drive the base
rent that you set for the buyer.
Fair
Market Value
Agreeing
to a base rent can represent a risk for both you and the buyer. Here’s why. Your
initial lease term would be dictated by the FMV or, rather, the price your
property would sell for on the open market; however, the FMV excludes the value
your practice adds to the property. Zach Goldman, owner of the real estate investment
trust (REIT) company, Handin Holdings, states that the valuation of a piece of
real estate is therefore equal parts of art and science. It involves noting the
global picture along with (1) the structure of the specific building, (2) the
real estate market of the area, (3) the quality of the practice’s operations,
and (4) the economic reliability of the tenants (i.e., will they be able to pay
rent).
Plus,
how you value your property isn’t necessarily how others will perceive its
value. As a practicing veterinarian and owner of the practice, you’ve undoubtedly
worked tirelessly to ensure the prosperity of your clinic. The sacrifices
you’ve made and the time you’ve spent developing the practice to bring it where
it is today, though, doesn’t necessarily add much value to the property itself.
Daniel Feinberg, vice president of finance at the REIT company, TerraVet
Solutions, notes that a common misconception they face when speaking to
veterinary practice owners is that they are often infusing their personal
experiences into the property value. He advises all future practice sellers to
work with REITs, like TerraVet, to help determine the value of their properties
from an objective lens; this way, as a seller, you can work on adding value to
your property prior to entertaining offers.
Once you’ve appropriately
valued your property, you can then determine how much you should charge for
your initial term of the buyer’s lease. We advise that you read the terms of
the lease provided by the buyer very carefully; CCs will typically request a
“reset to FMV” once it’s time for them to renew their lease. This can
effectively eliminate cash flow certainty during the renewal periods and,
clearly, this does not always work in your favor. Whether or not this will be
advantageous to you is highly dependent upon a number of factors, including
your geographic location. Typically, if an FMV reset is included, then an
appraisal will be needed. If you aren’t sure whether this would negatively or
positively impact you, you could create appraisal rules and limitations to
include within your lease. You’ll want to answer questions that add clarity to
and substantiates the FMV reset; these are questions such as:
- What appraisal method will be used and who
will be conducting the appraisal? Your choice or buyer’s choice?
- How will the future rent be determined?
Will it be based on the property’s best or highest value?
- Will the FMV-based rent take into
consideration the practice’s value?
These are only a few
questions that will need to be answered and you can find more information by
contacting your real estate attorney or a REIT company.
Base
Rent
Base
rent is the amount charged to the buyer to simply occupy the premises. It can
be calculated in a variety of ways, with the two most common methods being the
following:
- Based upon a percentage of a tenant’s
gross revenues: This will complicate the lease because the lease parties need
to agree on (a) the method used to calculate the practice’s gross revenues; and
(b) a process to resolve disagreements.
- Based on dollars per square feet, with “square
feet” able to be defined in a number of ways: Most commonly, leases charge a
dollar per foot of either the “rentable space” or the “rented space.” The
former results in a higher rent, but will likely be refuted—and, therefore, the
latter will be more easily accepted. No matter what standard is used, you will
need to clearly define square footage.
Whether
you choose the first or second option to calculate base rent, you will likely
need to negotiate specific.
“Additional
rent,” meanwhile, comprises all other costs, usually related to the facility’s
operations, that your buyer is required to pay you in addition to the base rent.
Such costs could be a security deposit (often one to three months’ rent) and
reimbursing the landlord for property taxes (monthly or quarterly). In most cases, the buyer doesn’t pay the property
taxes directly; this would typically be handled by you and then you would be reimbursed
by the buyer. You could, however, require the buyer to pay you an estimate of
property taxes monthly or quarterly in advance, subject to an annual
reconciliation mechanism. This would consolidate the buyer’s payments while
concurrently allowing you to receive a portion of the property tax amount in
advance.
Types
of Net Leases
Briefly,
net leases help to define the relationship and responsibilities between the
buyer and seller. The type of net lease—single, double, or triple—determines
whether the buyer will pay, in addition to the rent, any of the following three
expenses: property taxes, property insurance premiums or maintenance costs. You
can equate the type of lease with the amount of responsibility, in addition to
the rent, that the buyer will have. Single net lease requires the buyer to be
responsible for property taxes, a double net lease will require the buyer to
pay for taxes and insurance premiums, and a triple net lease will require the buyer
to pay for all three additional expenses.
The
goal is to minimize your responsibilities as a landlord as much as possible. Therefore,
most leases are triple net leases. Reducing your responsibilities increases the
likelihood that the buyer will negotiate with you on topics like rent during
the initial term of the lease, liability insurance requirements, and a host of
other things. Your best option would be to require a triple net expenses lease while
only being required to cover the maintenance and replacement costs of the
property’s structural components, such as a roof replacement or maintenance of
the property’s foundation.
Annual
Rent Escalations
Rent
increases can be considered the norm in most veterinary practice leases today.
These escalations are usually based on the Consumer Price Index (CPI), produced
by the Bureau of Labor Statistics (BLS), which is essentially an average price
measured over a time range. The CPI allows for you to adjust the buyer’s rent
to accommodate the price change of the current real estate market. Most
commonly, the escalation is represented by a percentage increase over a specified
period of time. Although you are able to determine a percentage and offer it
within the lease, we typically see a two to three percent increase annually.
You can think of this as a compounding scheme whereas you will establish the
base rent for the initial year of the lease, and each year after the buyer will
pay an additional percentage. To illustrate, here is an example:
You’ll
have the buyer pay a base rate of $25,000 annually during your initial ten-year
lease. However, you will add the caveat that states how there will be a two
percent escalation that will be applied to the base rate annually. This type of
increase would result in the tenant paying nearly an additional $41,000 at the
conclusion of their ten-year lease term.
This
provides a better, more stable and predictable method of forecasting what
income you will receive from the buyer. Ideally, you’ll consider their rent in
conjunction with the buyer’s responsibilities as a tenant, so you need to also consider
what kind of net lease you’d prefer for the buyer to have.
Financial
Reports
In
addition to your lease, you can also request an annual financial report of the
practice. While most landlords don’t request this information, there are many
reasons why you should. Annual financial reports allow for you to gauge the
operations of the practice and determine whether the buyer will be financially
self-sustaining. When requesting the financial reports from the buyer, they
should typically provide you with a balance sheet, profit and loss statement,
and a statement that acknowledges any changes in the financial position as well
as any supplemental details to explain the change. These combined reports will provide
an overall view of the financial well-being of the buyer, as well as assure you
of their financial stability throughout the lease term(s).
The
Guaranty
This
seems like a very clear and straightforward issue, right? We generally assume that
the buyer will provide the guaranty, but who exactly is the buyer? In this day and
age when most of the CCs are owned by a larger corporate parent, you have to
ensure that the buyer who is purchasing your practice can provide a guaranty
for your lease. The company backing your lease could range from, say,
Midwestern Pet Hospital, a single hospital with a limited, regional reach, to Animal
Hospital Operations, a generally well-known company with multiple hospital
ownerships. If you did your due diligence, you would discover that Animal
Hospital Operations is owned by Krispy Kreme, a company with the financial
assets to assure you they are committed.
In
order for Krispy Kreme to provide you with stability, using that example, you
would need to confirm that their name is listed in the lease agreement. In
comparison, a review of financial statements shows that Midwestern Pet Hospital
has had a fluctuating history of financial stability and only within the past
three years has begun producing competitive revenue. Which buyer would you
choose to back your lease? You’d likely selected Krispy Kreme and rightfully
so. The point here is that you should always ensure that the buyer can either
provide a corporate guaranty from their parent company or can provide enough
evidence to convince you that they can uphold tenant responsibilities and,
essentially, foot the bill.
Assignments
An
assignment clause in a lease essentially allows for the tenant to transfer the
lease, and all associated tenant responsibilities, to a different entity.
However, this is typically an area that you as the landlord will want to
specify and limit. Commonly, CCs like to freely transfer their leases to any
affiliated entities, which would almost certainly diminish the value of your
property for multiple reasons. First, if the buyer was allowed to sublet or
freely assign the lease, then they would receive the revenue generated from the
sublet, not you. Second, if the tenant isn’t up to par, then the value of the
property itself could be driven downward. Therefore, it’s in your best interest
to add provisions to prevent this free assignment. For example, you can
negotiate by stating that the buyer can only assign their lease to a guarantor
with a net worth that is equal to or greater than the existing guarantor. This
ensures that your property’s value does not decrease and that the tenant
responsibilities are financially accounted for.
Are
there any outstanding rights of first refusal or offer (ROFR/ROFO) with your real
estate?
The
ROFR and ROFO concept can be off-putting for many buyers and could severely
diminish the quantity of offers you may receive. To explain, there are many
variations on a theme when discussing ROFRs and ROFOs, but they all center on
the fact that, as the seller, if you receive an offer to purchase the property,
you are legally bound and required to send notice of the full offer to whomever
holds the ROFR/ROFO. If the offer is incomplete or if you don’t give the holder
sufficient notice of the offer, you have now made yourself, as the seller,
vulnerable to one of two scenarios:
- being sued for failing to protect the
rights of the ROFR holder
- losing the interest of the buyer because
the ROFR holder didn’t respond or didn’t receive the notice of the full offer
with enough time to respond
In
some instances, there’s the ROFO, which is currently defined as “an offer made
in good-faith” by the seller. This means that the seller will inform the holder
of a reasonable offer before any official listing of the property or
entertaining of such offer. The holder can either refuse or accept the offer. With
a right of first refusal, the ROFR holder can opt to match or counter the
buyer’s offer. This leaves you vulnerable to losing your initial buyer’s
interest because the buyer won’t, or can’t, raise their offer to purchase the
estate. Your practice facility’s future is subject to the demands of the holder.
You can choose to accept their offer or remain the landlord. As you can see,
the impact of the ROFO/ROFR can be quite significant; therefore, you should carefully
review any and all documents for such a clause.
What
are your expectations of the buyer?
As
a practice owner preparing for the next step, it is important that you think
about your lease, your practice, and your future, post-sale. You have to
determine what responsibilities you are expecting the buyer to take on and be
willing to negotiate those from the
very beginning. Knowing what terms of your lease are non-negotiable from
your perspective before you begin the bidding process could prove to be
advantageous because you can provide them with your terms and negotiate from
there. With respect to the lease obligations, the buyers can’t change the terms
of the deal or alter the purchase price later in the process because you’ve
already informed them of your lease terms and have negotiated the obligations
at the start. Informing your buyers of what the lease terms are in the
beginning and having that full transparency gives you the most leverage to
guide the conversation how you see fit.
So,
what does all of this mean?
There
are numerous points to consider prior to the sale of your practice to prepare
you for negotiations. The process of
selling your practice can be long, and it can easily be extended if you have
not addressed your personal, practice and/or property needs. Many sellers are
not prepared to deal with a facility lease when they sell their practice, but
doing your homework now can give you the knowledge and confidence to negotiate
a lease with your buyer that will benefit you for years to come.
WORKS CITED:
- Lacroix, Charlotte. “Property Lease
Dangers, Part I” | Real Estate, 2012, Veterinary Business Advisors, Inc. http://veterinarybusinessadvisors.com/wp-content/uploads/2016/07/Property_Lease_Dangers_Part-1_2012.pdf
- Lacroix, Charlotte. “Property Lease
Dangers, Part II” | Real Estate, 2012, Veterinary Business Advisors, Inc. http://veterinarybusinessadvisors.com/wp-content/uploads/2016/07/Property_Lease_Dangers_Part-2_2012.pdf
- Lacroix, Charlotte. “Negotiating a
Commercial Lease” | Real Estate, 2018, Veterinary Business Advisors, Inc. https://veterinarybusinessadvisors.com/negotiating-a-commercial-lease/
- Gosfield,
Gregory G. “A primer on real estate options.” Real Property,
Probate and Trust Journal (2000): 129-195.
- Ackerman,
Lowell, ed. Blackwell’s five-minute veterinary practice management
consult. John Wiley & Sons, 2013.
- Bank, LiveOak. “Veterinary Acquisition Due
Diligence.” Veterinary Practice Acquisitions | Due Diligence Services |
Mergers, 2017, www.veterinariancpas.com/acquisition-due-diligence.htm
- Stein, Joshua “The Most Important Issue in
Every Ground Lease: Rent Resets and Redeterminations, Fair Market and
Otherwise” New York State Bar Association | Real Estate, 2018, http://www.nysba.org/WorkArea/DownloadAsset.aspx?id=86403
- McCormick, David; Mamalis, Leslie.
“Monitoring Practice Profitability” Veterinary Hospital Managers Association
2013 Annual Conference, https://cdn.ymaws.com/www.vhma.org/resource/resmgr/imported/MonitoringPracticeProfitablityfinal.pdf
- Bank, Live Oak. “Veterinary Practice
Acquisitions Guide 2018” Veterinary Practice Acquisitions | Acquisitions, 2018,
https://www.liveoakbank.com/wp-content/themes/LOB2017/assets/downloads/Live-Oak-Bank_Vet-Acquisition-Guide.pdf
- US
Bureau of Labor Statistics. “Writing an Escalation Contract Using the Consumer
Price Index”. Real Estate. November 2012. Beyond the Numbers, Volume 1, Number
19. https://www.bls.gov/opub/btn/volume-1/pdf/writing-an-escalation-contract-using-the-consumer-price-index.pdf
Jul 26, 2019 | Business & Contractual Issues
As the presence of corporate consolidators in the veterinary field increases, it has become even more important to understand what to look for when negotiating an associate contract with a corporate practice. Generally speaking, corporations can have a significant edge in negotiations because they can cause you to believe that their contracts are non-negotiable. They may, for example, say the following: “This is our contract for everyone.” In reality, everything is negotiable, and it’s your value that allows you to negotiate your own contract.
While it’s true you may have less negotiating power with a corporation than with a private practice, you will have more legal protection under the employment laws with a corporation. Ideally, all contracts should be reviewed by an attorney or translator experienced in reviewing veterinary employment agreements, because contracts are intended to prevent miscommunications in the future. Below are some key points to consider when negotiating a contract with a corporate consolidator (“CC”).
1. Term and Termination: How long will it be until your contract expires? Does the term automatically renew at this time? Note that, if a contract has a one-year term, that does not guarantee you a one-year employment. The employer may in fact have the ability to terminate you sooner. CCs like to use the term “at will,” meaning they can fire you at any time for any reason. Other ways of termination would be “without cause” with both parties agreeing to give “X” number of days’ notice before termination. Many CCs, though, will not want to give you advance notice, especially if they are taking over a new practice.
2. Schedule: How many scheduled hours per week are you required to work? Beyond that, how many additional hours must be spent calling owners, overseeing patient care, and more? Are there any required emergency hours? What about holidays, weekends, and nights? CCs tend not to give exact number of hours to be worked. They tend to use language such as “minimum of 40 hours” as opposed to “from 35-45 hours.” Specificity is against the interests of the CC.
3. Duties: What, as an associate, are you required to do? Review this, because some CCs may require you to do additional work that you didn’t need to do for old management. Do you, for example, have to organize staff meetings? Participate in marketing? Handle emergencies during work hours? Being specific in the contract almost always benefits the employee. Note that private practices tend to be more willing to mentor you in these duties than CCs.
4. Compensation: Typically, compensation is paid by salary, commission (production), or a combination of both. How is your production calculated? Do you get production reports? Are there any deductions from your salary and, if so, what are they? Is there negative accrual during slow production months? CCs can change how they calculate their production pay. If you’re not aware of how you get paid, you may not realize why your production pay has changed.
5. Benefits: Most practices offer some sort of benefits package, and CCs typically offer larger and better packages than private practices. However, these benefits can be subject to change and are not guaranteed by the employer. CCs tend to comply with state and federal employment laws that govern how benefits are given, while private practices may not, due to lack of knowledge. These benefits are tax deductible and are not calculated as employee income. Therefore, there is a large savings to be gained with a larger benefits package. This usually includes but is not limited to health insurance, professional liability insurance, and retirement benefits. Note that, if a CC offers malpractice insurance, it often does not cover license defense.
6. Exclusivity: Employers will usually require you to perform services for their hospital alone. This would prohibit you from doing any shelter or relief work on the side. This may even prohibit any other type of job, even if not related to veterinary medicine. CCs are no exception here, and you must negotiate specific exceptions if you wish to work outside of the CC.
7. Performance Evaluation: Will you be provided written or oral evaluations? When? Does this correlate to compensation?
8. Signing/Relocation Bonus: In today’s market, veterinarians are valuable and most places will offer some kind of sign-on bonus. CCs can usually offer a significantly higher bonus and, depending on where you are coming from, often offer a significant relocation allowance as well. Most of these bonuses are tied to retention, meaning you must work there for a predetermined amount of time—perhaps one year—to keep the bonus. If not, the money must be repaid. Also, in your contract, it’s important to find out if the bonus can be kept if you are fired without cause. One perk of working for CCs is that, if you are moving, they can often help you to relocate to another one of their locations, which can make the process significantly easier.
9. Non-Competition: The agreement states that the employee will not directly compete with the employer after termination of employment. The provision must state a specific distance and time (e.g., two years, ten air miles). This area should cover where 85% of the practice’s clientele comes from (trade area). When does your non-compete kick in? When does the non-compete become enforceable? CCs often have a much stricter policy than private practices. For example, some do not allow you to work in proximity to any of their hospitals. This could easily double or triple the area you could be prohibited from working in and can change if new hospitals open up. Also, the scope of restricted activity may be broader with CCs. In addition to small animal medicine, they may include intellectual property, research, practice management, and so forth.
10. Non-Solicitation: This agreement states that the employee will not try to poach other employees away from the business to work elsewhere. This would apply even if you are outside your non-compete area. It is important to also know that some CCs will not allow you to solicit employees from any location of theirs, even if you don’t personally know them.
11. Assignment: There is currently a very active market for the sale of veterinary practices. Many employers include provisions that allow your original contract to be signed over to the new owner. This means the buyer would not need to negotiate a new contract with you. It is important to check for this provision, whether you currently work for a private practice or already work for a CC.
It is important to understand all aspects of your contract while negotiating your associate contract to decrease any confusion during and after your contract period, whether a private or corporate practice. With the rise of corporations in the Veterinary industry, it is also important to note the differences between what a private practice and corporation could look like relating to an associate contract.
Try to make the contract as specific as possible so there is no ambiguity if an issue arises. Ask as many questions as you need prior to signing to clarify what exactly your job will entail. Always have the contract reviewed by a lawyer familiar with the field and do not feel pressured to sign prior to this. Corporations may be pushy and imply they do not negotiate, but this is your well-being and livelihood, not theirs. Know your value and pursue it in any contract.
Jun 21, 2019 | Business & Contractual Issues
Experts today often discuss the importance of being empowered, and feeling that way can be a key part of living a full and healthy life. But, take a second look at that phrase—being empowered—and you’ll see that it actually refers to a passive process, of other people empowering you. We’d like to suggest that, instead, you should empower yourself by understanding what you’re truly worth, embracing a philosophy of lifelong learning, and then using that combination to earn more money in the workplace. The following steps can help you achieve those goals.
#1 Conduct a Realistic Self-Assessment
There are self-assessment tests online, and there are consultants who can help you with this process. If you can be honest with yourself, you can do your own assessment. At its core, self-assessment is a process whereby you determine your strengths and weaknesses, and their value. Strengths can include:
- work experience
- educational degrees and certifications
- volunteer and other non-paid experience
- leadership skills
- communication skills
- organization skills
- strong work ethic
- problem-solving skills
- good judgment
- flexibility
- self-discipline and initiative
- analytical ability
- empathy
This is just a partial list of what you could consider your strengths during your self-assessment process. To brainstorm an even more complete list, it could help to use Google to find additional traits and experiences to include; sites that focus on resume writing, for example, often have an excellent list to browse through and consider.
You can use the same list to determine which of these are your weaknesses—meaning any educational, personal and work-related areas where you could use more bolstering of skills. When you create an actual list of weaknesses, note where you are already working on improving that skill gap, and then brainstorm ways you can further your worth even more.
As noted in the subheading of this step, it’s important to create a realistic list. If you’re too modest, then you’re likely undervaluing yourself in the workplace, which means you may be earning less than you deserve. If this resonates with you, why are you doing this? How can you build your self-esteem? Were you taught growing up that bragging was inappropriate, and that humbleness was a virtue? If so, then the task in front of you is to work on being honest about your accomplishments in a professional way.
Conversely, if your self-perception is higher than the reality, you may ultimately suffer negative consequences. It may enable you to convince a supervisor that you deserve a promotion and a raise, but if you can’t perform appropriately then you may get negative reviews and eventually lose that job. Take a step back and realistically self-assess. Then boost your skills, both hard skill sets and soft ones.
#2 Create an Ongoing Improvement Plan
Few of us can rest on our laurels. For example, if you’d like to continue to advance in your career and continue to raise your salary, then it makes sense to use your self-assessment list to create an ongoing plan for further advancements.
It can be beneficial to have a trusted mentor to serve as your sounding board. This can help if you tend to be overly critical of yourself, as well as if you internally overstate your levels of job performance. When choosing a mentor, select one who can offer direct, constructive feedback; you may discover that you could use more than one mentor. Perhaps one is excellent in giving feedback about your actual job skills and performance, while another can guide you towards your goal of being more empathetic towards clients.
If you have mentors, focus on being open to hearing what they have to say, putting aside any feelings of defensiveness. If you have the right mentors, those who have your best interests at heart, then actively listening can provide you with excellent gifts of insight. (If you don’t think you have the right mentors, then that’s another situation entirely, and one that needs to be addressed.)
Take notes as your mentors offer feedback so you can refer to them and reflect. This can help you to gauge progress and it also shows your mentors that you’re committed to the process and the time they’re dedicating to help you.
#3 Formulate Your Personal Branding Statement
Once upon a time, branding was for products. In today’s times, personal branding is key, and when properly articulated, it can serve as a beacon for understanding your true worth at work. When you create a personal branding statement, you are stating what makes you unique and valuable, and this helps you to proclaim your worth in the workplace in a professional way.
Remember when, at the start of this article, we differentiated between being empowered and empowering yourself? The reality is that if you don’t present a certain brand, others will decide your brand for you. Which would you prefer?
Questions to ask yourself as you create this statement include what you stand for and what you advocate for. What do you aspire to do now? In five years? Ten? In what areas of work would you make a good participant? A great leader? Where are you continuing to advance?
Here is a starter statement: I am focused on developing profitable new lines of service at work, while cultivating authentic relationships based on trust and respect. My ability to stay calm in crises is a central tenet of my leadership skills.
After you’re clear about your personal branding, think about how to most effectively articulate it—not only in words, but also in how you act and interact each day, as well as doing what you say. If you don’t do exactly what you say, make sure it’s because you over-deliver, not under-perform. Your appearance is also important. This doesn’t mean wearing the fanciest attire, but it does mean the most appropriate. Being well groomed always matters.
The way you treat someone when it doesn’t necessarily benefit you may be the litmus test that determines whether you truly believe in and live out your branding. Your personal branding statement isn’t an overblown marketing slogan, written just to pull out of your pocket when you want to get ahead of the next person. It should always accurately reflect the authentic, genuine you.
#4 Asking for More Money
By living life as an ongoing learner, always filling in gaps and improving yourself personally and professionally, you are creating a scenario where you deserve more money. Sometimes you also need to ask for that extra cash.
Entire books have been written on how to ask for a raise. Overall, it involves research and preparation. Be prepared to discuss your accomplishments and how, specifically, they have added value and will continue to add value to your workplace. Quantify benefits whenever you can while also discussing how they add to the quality of the company and customer service provided.
Be aware of what the industry standards are for your position, and if you’re asking to be paid on the high end, be ready to share why you’re worth it and how you can continue to move the company forward, including financially. Be courteous and clear in your request and consider how much more responsibility you’d be willing to take on if that’s a counteroffer given.
Practice giving your pitch in front of a mirror. Watch your body language. Is that the image you want to portray? Practice your pitch in front of your mentor and/or other trusted colleagues. What feedback did you receive? What did you think of any comments made and how does that change your pitch? You don’t need to use all feedback that’s given, but thoughtful consideration of advice provided by intelligent professionals is wise.
Anticipate questions you may be asked and consider how you might answer them. Conversely, don’t create prepared answers that may sound stiff in the meeting with your supervisor, and may not precisely fit the actual conversation that’s taking place
Prepare your response in case the answer is “no”. Could you counteroffer by asking to meet again in six months to discuss the requested raise? If not, what does make sense as a next step?
At a minimum, this conversation demonstrates that you value yourself and gives you a chance to discuss your contributions with your supervisor. It may ultimately lead to a raise at your current workplace or it may give you confidence to job seek elsewhere, in a place where your skills can be put to even better use with better compensation given.
Bonus: Pay It Forward
As you continue to move forward in your career, any advancements that you make will likely have occurred—at least in part—because of mentors and other supportive professionals. So, it makes sense to consider how you can pay them back by paying it forward. Ways you can do that include the following:
- serving as a mentor/role model to others
- helping others in less formal ways
- encouraging co-workers who are feeling down
- introducing people in your industry who could likely help one another
- complimenting people who are going the extra mile
- keeping calm in an office crisis
The various ways to pay it forward are as unique as you are. Once you have figured out how to empower yourself and increase your net worth, take the time to help others do the same.
Jun 21, 2019 | Business & Contractual Issues
When you’re offered a job at a veterinary practice, it’s important to get as much information as possible about the specifics. You’ll typically be offered a certain wage, often along with benefits such as health insurance, retirement benefits, vacation time and the like. But the offer may not mention workplace flexibility and other perks that can have a significant impact on your job – and so it’s crucial to negotiate all of the key elements of the offer.
Many people feel uncomfortable when negotiating a work package, but gaining the ability to negotiate well help you to be more successful at work long after you’ve begun a particular job. As a part of a veterinary practice team, you may need to negotiate with vendors, and with challenging clients – and almost certainly there will be times that you need to negotiate with your employer about a raise, a revised benefits package, and evolving workplace perks and policies.
When you negotiate fair compensation for yourself, you will become more committed to the practice, which translates into better care for the practice’s clients and their pets. As an employer, when you negotiate fairly with employees, you will help to build loyalty that will stabilize and strengthen your practice.
What Negotiations Are & Why They’re Needed
A negotiation is a process in which two or more parties attempt to resolve differing needs and interests through a series of communications. An employer, for example, may want to offer someone higher wages, but needs to consider the overall profitability of a practice. Meanwhile, an employee may understand and support the need for a thriving practice, but also needs to earn a certain wage to support his or her family.
Employers and employees negotiate because they each have what the other one needs, and they believe they can obtain a better outcome through the process than if they simply accept what the other party is offering. Sometimes, negotiations occur because the status quo is no longer acceptable for one or both parties.
Negotiations take finesse because, besides dealing with specific tangible points (wages, insurance benefits and workplace perks, as just three examples), emotions play a part and ongoing relationships are involved. The parties are choosing to try to resolve their different positions through discussions, rather than arguing, ending the relationship, having one person dominate the relationship or taking the dispute to another party with more authority.
Negotiation Terminology
Using the example of wages, employers and employee alike have a target point, which are the wages they would like the other party to agree to. The difference between what an employee wants to be paid and the employer wants to pay is the bargaining range. Meanwhile, the resistance point is where a party would walk away from negotiations; if too low of a wage or raise is proposed, an employee may begin job searching or a job candidate may decline an offer; the employer also has a point at which he or she will reject a wage request and end negotiations.
When the buyer (employer) has a resistance point that’s above the seller’s (employee), this situation has a positive bargaining range. The employer, in this case, is willing to pay more than the employee’s minimum requirements, so this situation has a good chance of being satisfactorily resolved. With a negative bargaining range, though, one or both of the parties must change their resistance point(s) for there to be a possibility of resolution.
In a wage negotiation scenario, either the employer will offer a starting wage or raise, or an employee or job candidate will request a certain dollar amount; the first person to name a dollar amount is making the opening offer. If at least one of the parties has a BATNA – best alternative to negotiation agreements – then he or she will probably approach the discussions with more confidence, having another alternative. So, if an employer offers someone a job, but has another excellent candidate waiting in the wings, the employer has another alternative and can set a higher and/or firmer resistance point. Conversely, if an employee or job candidate has a unique set of skills that are needed in today’s practices, that person probably has more options in the job market – perhaps even other pending offers. The quality of a negotiator’s alternatives drives his or her value by providing the power to walk away and/or set a higher and/or firmer resistance point.
Bargaining Styles
There is more than one type of bargaining style. One way to differentiate them is to divide them into distributive bargaining and integrative bargaining.
In distributive bargaining, parties’ needs and desires are in direct conflict with one another’s, with each party wanting a bigger piece of a fixed tangible such as money or time, so these negotiations are typically competitive. Parties are not concerned with a future relationship with the other person. A slang term for this type of negotiation is “playing hardball” or “one upping” someone. Strategies often include making extreme offers, such as an employer offering a very low wage or a job candidate asking for an exceptionally high one. Tactics include trying to persuade the other party to reconsider his or her resistance point because of the value being offered – in this example, the job candidate might say that a high salary was required because of his or her abilities or an employer could say that lower wages would be compensated by a great work environment.
With integrative bargaining, though, the goal is win-win collaborations that will provide a good opportunity for both parties. The employer would acknowledge the employee’s value and need for a decent wage, and negotiate accordingly, while the employee or job candidate would recognize the value of working at a particular practice as well as the fact that the employer has numerous other financial commitments to fulfill. They recognize that they need one another to maximize their respective opportunities and negotiate from a place of trust and integrity, with a positive outlook that recognizes and validates the other party’s interest in the transaction.
Here’s an interesting psychological truth. Negotiators are more satisfied with final outcomes if there is a series of concessions rather than if their first offer is accepted, because they feel they could have done better.
Negotiation Styles
To successfully negotiate, it’s crucial to clearly define the issues involved, and to prepare for the negotiations. Each party should be clear about his or her target point, opening offer, resistance point and BATNAs.
Multiple negotiation styles exist, each on the spectrum of assertiveness and cooperativeness. Here are summaries of common styles:
Competing (high in assertiveness, low in cooperativeness): these negotiators are self-confident and assertive, focusing on results and the bottom line; they tend to impose their views on others
Avoiding (low in assertiveness and cooperativeness): these negotiators are passive and avoid conflict whenever possible; they try to remove themselves from negotiations or pass the responsibility to someone else without an honest attempt to resolve the situation
Collaborating (high in assertiveness and cooperativeness): these negotiators use open and honest communication, searching for creative solutions that work well for both parties, even if the solution is new; this negotiator often offers multiple recommendations for the other party to consider.
Accommodating (low in assertiveness, high in cooperativeness): these negotiators focus on downplaying conflicts and smoothing over differences to maintain relationships; they are most concerned with satisfying the other party
Compromising (moderate in assertiveness and cooperativeness): these negotiators search for common ground and are willing to meet the other party in the middle; they are usually willing to give and take and find moderate satisfaction acceptable.
As long as both parties are committed to the business relationship and believe there is value in coming to an agreement, negotiations can typically proceed. If one or both parties, though, are unreasonable, uninformed or stubborn – or listening to advisors with those characteristics – negotiations can fall through. Other challenges exist when one party doesn’t necessarily need the deal, isn’t in a hurry or knows that the other party is without other options and/or in a time crunch.
Negotiation Fears
You may dread negotiation. If so, you’re not alone. There are many reasons for not wanting to negotiate, but some common reasons include the following:
You have not yet solidified your position: in this case, more preparation is clearly needed.
Fear of looking stupid: nobody likes looking foolish, so some people will avoid negotiations altogether rather than taking the risk of not negotiating well.
Liking people and wanting to make them happy (but perhaps not being able to give them what they want)/not wanting to affect someone else in a negative way: if you are interviewing for a promotion at a practice, and you really like the practice manager, you may worry that negotiations will upset the manager or put her in a difficult position.
Fear of failure: some people would prefer to not negotiate at all, rather than making an unsuccessful attempt.
Feeling uncomfortable with money: some people were taught that it wasn’t polite to talk about money.
Other people have an aversion to conflict, overall, and so they miss out on the potential of it by not negotiating, in order to avoid feeling vulnerable.
Women in particular are reluctant to negotiate, with only 7 percent doing so. They suffer the costs associated with not negotiating because they tend to have lower expectations, fear being considered a “bitch” and can be penalized for negotiating. As a solution, women can consider framing their wants into the value that they will bring to the other party, and share how they can solve the underlying problem of the other party.
Areas where negotiating may not feel as intimidating include:
- Negotiations for resources, whether it’s asking for more equipment or for a practice to hire more people
- Negotiations about how to use resources; with a common purpose, solutions can be reverse engineered fairly easily
- Negotiations where you have expertise
- Negotiations with big companies where nothing is personal
- Negotiations where you have evidence to support your position, including facts, data and logical reasoning
Salary and Benefits Negotiation Tips
Even though the examples given so far have focused on monetary compensation, when negotiating, don’t focus solely on wage or salary. Also discuss benefits offered and workplace perks – meaning the entire package. This can include, but is not limited to, health care coverage, life insurance, retirement programs, vacation time and flextime. If you’re job hunting, investigate what companies are offering. Where do you think the place you’re interviewing falls on that spectrum? What is the minimum pay level that you’re willing to accept? What is your preferred wage? What benefits are important to you?
If you want to work at a particular practice, but the pay rate isn’t quite what you want, ask if you can have a salary review in, say, six months. This doesn’t mean accepting a salary that is clearly sub-par, nor does it mean that you should try to put more pressure on a potential employer who is already offering you a good deal. It is simply something to consider in relevant circumstances.
What workplace perks might be desired? Would a company cell phone help you? Better equipment or software? If so, you could consider accepting somewhat lower pay if you get more tools to do your job.
Although telecommuting is seldom an option for veterinary staff, outside of perhaps financial or other purely admin functions, you could negotiate coming in half an hour later so that you can take your children to school or schedule a lunch break that coincides with when you need to pick them up. If you bring crucial skills to the negotiating table, you’re more likely to get these concessions than if you are entry-level.
If relevant, ask about practice policy if you become pregnant. How acceptable is the policy to you? How important of a negotiating point is this for you? What about if you are injured in the workplace? Educate yourself on your workplace rights before negotiations occur, as well as company policy. If you are valuable to the practice, perhaps you can negotiate some additional flexibility.
Who should be the first to make an offer? Some experts believe that, if you allow the other party to provide a starting dollar figure, he or she has shown his or her hand. But, research indicates that final figures tend to be closer to the original number stated than what the other party had originally hoped.
What NOT to Do
Beware of “between”! It probably feels reasonable to ask for a certain salary range – or range for a raise. But if you do that with a current or prospective employer, you have basically tipped your hand as far as how low you would go. Using the word “between” is actually a concession!
Another risky term: “I think we’re close.” A savvy negotiator will recognize “deal fatigue” on your end and perhaps stall in the hopes that you’ll concede, just to complete the deal.
Negotiating with Brokers
If you’re buying or selling a veterinary practice, then your negotiating skills will likely come in handy. For example, let’s say you’re selling a practice. In your listing agreement contract, you’ll typically need to agree to a period of time wherein the broker has exclusive rights to sell, perhaps six months or a year. If you’re not satisfied, can you terminate the agreement? It depends! It depends upon how well you negotiated the original contract with the agent. You may, for example, negotiate a clause stating that you can terminate the listing immediately for good cause or with a short period of prior notification if the termination is without cause. In exchange for that clause being included, perhaps you’ll agree to reimburse expenses incurred by the agent during the listing period and/or pay commission if the buyer is one that the agent initially identified.
Negotiating Lab Contracts
You’ll probably also need to negotiate contracts with labs that provide diagnostic services for your practice. You can work on a pay-as-you-go arrangement, sending work to different labs, as needed. The flaw is that you won’t get the financial incentives offered to practices who sign contracts. By signing a contract, you can negotiate lower fees or better rate schedules. When you pay less in lab fees, you could decide to offer lower rates to your customers, which will probably make more of them agree to pay for diagnostic testing in the first place. If you sign a multi-year contract with a lab, you may also be able to lease in-house lab equipment as part of the deal.
For Best Results
People tend to feel more confident during negotiations when it focuses on an area of their expertise and/or where solid evidence exists to back up the negotiations. Overall, success is achieved when you first:
- Determine the interests of the other party
- Embrace compromise
- Observe the Golden Rule, treating others as you would like to be treated: fairly and reasonably, without defensiveness
- Be prepared, both in factual information and in strategy
Know what’s most important to you, run the figures, and negotiate for what you want!
Mar 26, 2019 | Business & Contractual Issues, Human Resources, Practice Management, Risk Assessment
To be successful in the workforce today, and throughout your life, you must successfully engage with people from the beginning to the end of each day. Often, it’s with people whose viewpoints don’t always match your own. And when viewpoints don’t match but you need to resolve the differences, it’s crucial to be able to effectively negotiate with the other parties to create a mutually-agreeable solution.
Quality negotiation skills are vital in situations such as accepting a job offer, asking your boss for a raise or to boost your workplace benefits, or when an organization to which you belong is making decisions that will impact people’s lives.
Traditionally, women have been more reluctant to negotiate than men, which means they have disproportionately suffered from the costs associated with not negotiating. Even today, there is a frequently-noted “confidence gap” between the genders, with one study showing that only 7 percent of women attempted to negotiate their salaries, whereas 57 percent of the men did.
Women are as competent as men in the workforce, with global studies by Goldman Sachs and Columbia University demonstrating that companies employing women actually outperform their competitors on every measure of profitability. So, the issue is confidence, not competency – but, because confidence is a critical component of success, this article will share information about how women can successfully engage and negotiate with others to receive what they deserve.
First, here is a definition of negotiation and why it’s necessary.
Nuts and Bolts of Negotiations
A negotiation is a process in which two or more parties attempt to resolve differing needs and interests through a series of communications. An employer, for example, may want to offer someone higher wages, but needs to consider the overall profitability of a company. Meanwhile, an employee may understand and support the need for a thriving business, but also needs to earn a certain wage to support his or her family.
Employers and employees negotiate because they each have what the other one needs, and they believe they can obtain a better outcome through the process than if they simply accept what the other party is offering. Sometimes, negotiations occur because the status quo is no longer acceptable for one or both parties. Negotiations take finesse because, besides dealing with specific tangible points (wages, insurance benefits and perks, as just three workplace examples), emotions play a part and ongoing relationships are involved. The parties are choosing to try to resolve their different positions through discussions, rather than arguing, or ending the relationship, having one person dominate the relationship or taking the dispute to another party with more authority.
So, here are helpful tips to help you to effectively negotiate for what you deserve.
Six Negotiating Tips for Women
Tip #1 Be Prepared
First, you must clearly define the issues involved and prepare for the negotiations. Be crystal clear about what you want to accomplish, your opening offer, your resistance point (the point at which you would be willing to walk away from the bargaining), and what alternatives you have if the negotiations don’t culminate in a solution that is acceptable to you.
Also, as much as possible, know relevant information about the other party to the negotiation. What is he or she likely to want? Understanding where this person is coming from and what he or she wants to accomplish will help you to manage the negotiation process more effectively.
Tip #2 Be Aware of Fears and Address Them Appropriately
Common negotiating fears include:
- that your position will not be solidly presented
- looking incompetent
- liking people and wanting to make them happy (but perhaps not being able to give them what they want!)/not wanting to affect someone else in a negative way
- worrying about failure
- feeling uncomfortable about talking about money
- aversion to conflict, overall
Sometimes simply recognizing your fears can be enough to put them into context and allow you to move forward. Other times, they point out weaknesses in your preparation – and, in that case, your fears can help you to solidify your research and negotiation approach. Overall, it can help to reframe your wants, focusing on the value they will bring to the other party, and to be prepared to share how your approach can solve the underlying problem of the other party.
Some women must also work on silencing their inner critic, a critic that might be saying how only “bitchy” women negotiate or that you somehow don’t deserve the full benefits of your hard work. Again, you can use these fears to identify places you need to bolster up your attitude and solidify your approach.
Tip #3 Recognize and Optimize Your Negotiation Style
Multiple negotiation styles exist, each on the spectrum of assertiveness and cooperativeness. Here are summaries of common styles:
- Competing (high in assertiveness, low in cooperativeness): these negotiators are self-confident and assertive, focusing on results and the bottom line; they tend to impose their views on others
- Avoiding (low in assertiveness and cooperativeness): these negotiators are passive and avoid conflict whenever possible; they try to remove themselves from negotiations or pass the responsibility to someone else without an honest attempt to resolve the situation
- Collaborating (high in assertiveness and cooperativeness): these negotiators use open and honest communication, searching for creative solutions that work well for both parties, even if the solution is new; this negotiator often offers multiple recommendations for the other party to consider
- Accommodating (low in assertiveness, high in cooperativeness): these negotiators focus on downplaying conflicts and smoothing over differences to maintain relationships; they are most concerned with satisfying the other party
- Compromising (moderate in assertiveness and cooperativeness): these negotiators search for common ground and are willing to meet the other party in the middle; they are usually willing to give and take and find moderate satisfaction acceptable
Simply by recognizing your style, you can highlight your strengths and know where to work on weaknesses. This isn’t to suggest that the process will be quick and easy, but it can be a vital step of the process in helping you get what you deserve on an ongoing basis.
Tip #4 Practice!
Becoming effective at negotiating seldom occurs overnight and it can be helpful to first practice your negotiation skills in areas where the process may not feel as intimidating. These can include negotiations:
- for resources, whether it’s asking for more equipment or to hire more people
- about how to use resources; with a common purpose, solutions can be reverse engineered fairly easily
- where you have expertise
- with big companies where nothing is personal
- where you have evidence to support your position, including facts, data and logical reasoning
Consider practicing what you’ll say in front of a trustworthy friend or colleague, or practice in the mirror. Imagine different scenarios for the upcoming negotiation and prepare how you might answer, doing so by answering out loud (which is quite different from simply running ideas through your head).
As you become more experienced with the process and as you experience some successes, even relatively small ones, this will help you to gain confidence and become better at negotiating, overall. This will then help to prepare you for more challenging or complex bargaining processes.
Tip #5 Fairness is Important
As long as both parties are committed to the relationship and believe there is value in coming to an agreement, negotiations can typically proceed. If one or both parties, though, are unreasonable, uninformed or stubborn – or listening to advisors with those characteristics – negotiations can fall through.
Or, if one party doesn’t necessarily need the deal and/or isn’t in a hurry – or knows that the other party is without other options and/or in a time crunch – then negotiations may not end up being fair in the long run.
You can’t change how fair the other party will be, but you can determine if your own position truly is fair. Don’t use the “gender card” to get your way, as just one example, because fairness and equality should be at the heart of every negotiation. Conversely, don’t accept an unfair agreement just because, for example, you’re tired of negotiating or you don’t think the situation can ultimately be fairly resolved.
Tip #6 Calmly Ask for What You Want
Be calm, be professional. Unfair as it may be, women who are negotiating can be watched especially closely to see if they show signs of emotion, whether anger or excitement. Ask for what you want, be willing to pause to let the other party consider what you said (rather than quickly filling in the silence) and then respond appropriately.
Always keep your pre-established resistance point front of mind. But, having said that, if a granted concession is unexpectedly greater in one area of more complex negotiations, consider if and how you might be willing to adjust your resistance point in another area as part of the overall negotiations.
Understanding Negotiation Terminology
Another way to close the confidence gap is to ensure you understand what negotiation terms mean and can use them – confidently. We’ll use the example of an employer-employee wage negotiation as our example.
Each person will have a target point, which are the wages he or she would like the other party to agree to. The difference between what an employee wants to be paid and the employer wants to pay is the bargaining range. Meanwhile, the resistance point is where a party would walk away from negotiations; if too low of a wage or raise is proposed, an employee may begin job searching or a job candidate may decline an offer; the employer also has a point at which he or she will reject a wage request and end negotiations.
When the buyer (employer) has a resistance point that’s above the seller’s (employee), this situation has a positive bargaining range. The employer, in this case, is willing to pay more than the employee’s minimum requirements, so this situation has a good chance of being satisfactorily resolved. With a negative bargaining range, though, one or both of the parties must change their resistance point(s) for there to be a possibility of resolution.
In a wage negotiation scenario, either the employer will offer a starting wage or raise, or an employee or job candidate will request a certain dollar amount; the first person to name a dollar amount is making the opening offer. If at least one of the parties has a BATNA – best alternative to negotiation agreements – then he or she will probably approach the discussions with more confidence, having another alternative. So, if an employer offers someone a job, but has another excellent candidate waiting in the wings, the employer has another alternative and can set a higher and/or firmer resistance point. Conversely, if an employee or job candidate has a unique set of skills that are especially needed today, that person probably has more options in the job market – perhaps even other pending offers. The quality of a negotiator’s alternatives drives his or her value by providing the power to walk away and/or set a higher and/or firmer resistance point.
Bargaining Styles
Plus, there is more than one type of bargaining style. One way to differentiate them is to divide them into distributive bargaining and integrative bargaining.
In distributive bargaining, parties’ needs and desires are in direct conflict with one another’s, with each party wanting a bigger piece of a fixed tangible such as money or time, so these negotiations are typically competitive. Parties are not concerned with a future relationship with the other person. A slang term for this type of negotiation is “playing hardball” or “one upping” someone. Strategies often include making extreme offers, such as an employer offering a very low wage or a job candidate asking for an exceptionally high one. Tactics include trying to persuade the other party to reconsider his or her resistance point because of the value being offered – in this example, the job candidate might say that a high salary was required because of his or her abilities or an employer could say that lower wages would be compensated by a great work environment.
With integrative bargaining, though, the goal is win-win collaborations that will provide a good opportunity for both parties. The employer would acknowledge the employee’s value and need for a decent wage, and negotiate accordingly, while the employee or job candidate would recognize the value of working at a particular company as well as the fact that the employer has numerous other financial commitments to fulfill. They recognize that they need one another to maximize their respective opportunities and negotiate from a place of trust and integrity, with a positive outlook that recognizes and validates the other party’s interest in the transaction.
Here’s an interesting psychological truth. Negotiators are more satisfied with final outcomes if there is a series of concessions rather than if their first offer is accepted, because they feel they could have done better.
Salary and Benefits Negotiation Tips
When negotiating at a workplace, don’t focus solely on wage or salary. Also discuss benefits offered and workplace perks – meaning the entire package. This can include, but is not limited to, health care coverage, life insurance, retirement programs, vacation time and flextime. If you’re job hunting, investigate what companies are offering. Where do you think the place you’re interviewing falls on that spectrum? What is the minimum pay level that you’re willing to accept? What is your preferred wage? What benefits are important to you?
If you want to work at a particular company, but the pay rate isn’t quite what you want, ask if you can have a salary review in, say, six months. This doesn’t mean accepting a salary that is clearly sub-par, nor does it mean that you should try to put more pressure on a potential employer who is already offering you a good deal. It is simply something to consider in relevant circumstances.
What workplace perks might be desired? Would a company cell phone help you? Better equipment or software? If so, you could consider accepting somewhat lower pay if you get more tools to do your job.
Or, if you have children, you could negotiate coming in half an hour later so that you can take them to school or schedule a lunch break that coincides with when you need to pick them up. If you bring crucial skills to the negotiating table, you’re more likely to get these concessions than if you are entry-level.
If relevant, ask about company policy if you become pregnant. How acceptable is the policy to you? How important of a negotiating point is this for you? What about if you are injured in the workplace? Educate yourself on your workplace rights before negotiations occur, as well as company policy. If you are valuable to the business, perhaps you can negotiate some additional flexibility.
Who should be the first to make an offer? Some experts believe that, if you allow the other party to provide a starting dollar figure, he or she has shown his or her hand. But, research indicates that final figures tend to be closer to the original number stated than what the other party had originally hoped.
What NOT to Do
Beware of “between”! It probably feels reasonable to ask for a certain salary range – or range for a raise. But if you do that with a current or prospective employer, you have basically tipped your hand as far as how low you would go. Using the word “between” is actually a concession!
Another risky term: “I think we’re close.” A savvy negotiator will recognize “deal fatigue” on your end and perhaps stall in the hopes you’ll concede, just to complete the deal.
For Best Results
People tend to feel more confident when negotiations focus on an area of their expertise and/or where solid evidence exists to back them up. Overall, success is achieved when you first:
- Determine the interests of the other party
- Embrace compromise
- Observe the Golden Rule, treating others as you would like to be treated: fairly and reasonably, without defensiveness
- Be prepared, both in factual information and in strategy
Keeping these suggestions in mind will help you to achieve success in all areas of life.
