Mind Your Business: The Negotiating Battle

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War Commander Mark Simon, fighting the Battle of the Budget. Courtesy of Mark Simon. [1]

Mayday! Mayday! We have an incoming client with multiple warhead negotiating tactics!

Alright, soldier. Listen up. These clients will hit you with everything they've got to try and pay you as little as possible. You need to have a battle plan so you don't go down in flames.

I recently engaged with a client in a series of animation skirmishes. Lots of budget numbers were thrown back and forth. The initial call sounded like a dream. We were dealing with a number of animated series all at once. It was a long-term contract that would keep my team busy for over a year. At first glance it all seemed like a lot of money, and the client was pushing for quick answers.

I've seen these client tactics a number of times, so I was prepared. Here's how they do it.

Their first barrage will be light. They want to trick you into thinking the job will be easy. When they first approach you, they will give you very little information. This is to lure you into thinking there isn't much to the project in the hopes that you will estimate low.

Be aware. Jobs are never as easy as they first appear. Your best strategy is to ask a lot of detailed questions. Make sure you know all the details, take your time and prepare a detailed budget so you understand all your costs.

The second barrage will be quick. That is, they will look for a quick answer. This is to try and get you to agree to a lower estimate than you should. (Do you see a pattern here?)

If you give a quick answer, you won't have enough time to think about your bid. This is where people tend to underestimate. Your tactic should be to ignore those urgent e-mails and sleep on it. Very seldom is a bid actually due the same day. If the client can't wait one day for a proper estimate, that's another clue that there may be other problematic issues with the project. It is also likely that you will run into working overtime to deliver on an all-too-short deadline. Plan and budget for it.

Their third barrage may be to throw out the offer of a seemingly large sum of money. For a small business owner, figures like $150,000, $750,000 or even several million dollars can sound like a lot of money.

"We'd like to give you these really easy animations and we have $150,000 budgeted for them."

Don't fall for it. $150,000 is only a lot of money if your costs are under $100,000. Break down your costs first.

Let's say you agree to a $150,000 budget. The project may take over a year. You will have to hire a number of people to help you on it. You have expenses, overhead, taxes, salaries, and of course you deserve to get paid and to make a profit. You may find that what first seemed like a lot of money doesn't come anywhere close to covering your costs, much less make you any money.

OK. Maybe you can do more of the work yourself to save costs. But what if another client calls? You won't have enough in your original budget to hire anyone to cover for you.

And then beware of the attack that can sink your battleship: starting the job without a complete contract.

Clients may say a few things here:

"I'm in a real hurry. I trust you. Let's just get it done fast."

"I've been doing this for 20 years and I always work on a handshake."

Insist on a contract before you begin. Make sure both sides understand exactly what is expected.

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Mark Simon. [2]

You don't want to get into a "You said/Client said" skirmish. The client will always win.

You will also find that the same clients who didn't want to worry about a contract will be the most picky about what they expect when it is put in writing.

You need to protect yourself from unwarranted changes and unknown expectations. Detail how long you will work on a project, or how many revisions you will provide, for the given price. List every project detail in the contract and don't forget to negotiate kill fees. Without putting details like these in writing, you will likely fall into a seven-year war... and only get paid for six months of it.

A good contract is a great defense. As they say, the best offense is a good defense.

Now get out there and give them a hell of a great job. Don't shoot until you see the whites of their contracts!

Mark Simon is an award-winning animation producer/director and speaker. He also helps people to sell their shows with consultations, samples and training. He is the co-founder of www.SellYourTvConceptNow.com [3] and will host a three-day conference working one-on-one with people on pitching their TV concepts at www.HitMakerTour.com [4], coming up in March, 2008. Mark may be reached at marksimonbooks@yahoo.com.