Thinking on Your Feet in Negotiations (opinions)

IrishExpat

So, as thread title suggests, I need to improve significantly my ability to negotiate and think faster face to face, without reaching for a calculator.

An opinion:

I take the odd private student for English / German class, usually in the evenings after my full-time job. Adults from intermediate levels and upwards and the usual price is 20eur per hour, but it can go up or down based on many factors (travel, level of prep).

Todays offer:

the sdent needs about 72 hours worth of class for exam prep (Cambridge FCE) at 3 hours a week (24 weeks) in 2 x weekly sessions of 90 minutes. Monday and Friday evenings starting last week in Sept. At usual rate and paying per class that would amount to 1440eur.

Students deal: 600eur upfront, then 600eur again in Dec; he gets a steep discount of 240eur, but I gain some security - as many teachers/tutors can attest that not knowing 100% if the student will pay at the end of the hour (can you wait til next week ...) can add to stress.

Anyway; back to the table or does his offer sound fair?

pedroeibar1

That is not ‘thinking on your feet’, it is asking how to price your product.

You need to look at your business model. It would be a good idea to have a ‘terms & conditions’ sheet outlining "what you do and how you do it" in which you detail the way you get paid (and for e.g. no refunds.) If someone want classes, email it to them. They know where they stand, as do you.

For casual classes (e.g. occasional grinds) you should have a pay-as-you-go model; if someone wants a deal on a series of classes, give a discount, but collect all fees upfront. For a specific series of ‘structured’ classes collect at least 50% up front and the balance half way through, no discount. If the student pays everything up front then give a discount.

Pedro,
a former user of foreign language classes who still remembers the horror of the teacher cutting in on the language lab earphones.

IrishExpat

pedroeibar1 wrote: »

That is not ‘thinking on your feet’, it is asking how to price your product.

You need to look at your business model. It would be a good idea to have a ‘terms & conditions’ sheet outlining "what you do and how you do it" in which you detail the way you get paid (and for e.g. no refunds.) If someone want classes, email it to them. They know where they stand, as do you.

For casual classes (e.g. occasional grinds) you should have a pay-as-you-go model; if someone wants a deal on a series of classes, give a discount, but collect all fees upfront. For a specific series of ‘structured’ classes collect at least 50% up front and the balance half way through, no discount. If the student pays everything up front then give a discount.

Pedro,
a former user of foreign language classes who still remembers the horror of the teacher cutting in on the language lab earphones.

You're right; maybe should have phrased it differently.

I'm sitting down this evening to put the business model to paper,
from price points (x per hour, % off for x classes up-front + y for extra material/support)
as until now it's always been verbal agreement and paid after the session, with cancellations / changes dealt with via a quick call/Whatsapp.

Now as I'm getting some leads to teach in companies (e.g. 6 employees for 4 weeks, english for presenations/emails), my own gig but the same work as my current contracted job - I need to get serious about terms and conditions.

As I hadn't thought it out, I had to accept or counter in the space of 15 minutes earlier.

Thoie

As well as your T&Cs, for your own sake I think you need to work out some "low, medium and high" numbers that you always have in your head to answer questions like that when you're put on the spot.

E.g. No matter where the class is held, I cannot do it for less than €12 per hour if I'm to make some profit. If the class is within 20 minutes of me, I can do it for €20 (which will cover petrol and travel time and profit). If it's within 40 minutes, I can do it for €30 an hour, and I won't do anything over 40 minutes away from me.

Once you have your low, medium, high, then work out what are the most regular time periods that people ask about. Maybe a standard term is 16 weeks, so without having to do maths, you want to know what's 16xLow, 16xhigh, etc.

pedroeibar1

IrishExpat wrote: »

Now as I'm getting some leads to teach in companies (e.g. 6 employees for 4 weeks, english for presenations/emails), my own gig but the same work as my current contracted job - I need to get serious about terms and conditions

If you are dealing with companies prepare a CV detailing your quals, experience and references (ask one of your past pupils who has a senior role if s/he would be willing to speak to any potential customer.)

You need written terms and conditions, as you will probably have to quote for the business and you need to be better than your competitors.

I would use a flat fee for groups – i.e. separate prices per hour for groups of 4, 6, 8 or 10. Up to you to scale the max size of class on the ground to be covered and if there is ‘homework’.

A business model must be tailored for private client or a business, they are very different markets. Teaching at corporates is good as people are on site and the hours are defined/precise, e.g. class is 5.00 to 6.00 every Monday (or whatever). That allows you to plan. Companies provide the textbooks, you do not want to be buying them and waiting to be repaid (unless you are getting a cut on the material).

Be aware of hierarchies – the class dunce might be a senior manager, the best student the postboy (if they still exist!) so be aware of the sensitivities.

Get your hands on some of the company’s PR material and base your classes on that. Read up on the industry in the language to be learned, look at their trade association documents, as every sector has its own ‘language’ and terminology. You need to know the correct foreign word for what to most is an obscure object/term but one the punters use daily.

Travel time / distance to the students could be a cost factor, but that is for you and not of any relevance to the punters. You are the service provider, you either want the gig or not. Best of luck with it.

IrishExpat

If I could thank your post twice I would. Thanks pedroeibar1, PM sent.

pedronomix

Good, solid, common sense advice from pedroeibar1. The only small point I would offer for consideration is that your modus operandi in the sales situation should be to ask the potential client as to exactly what they want, then get back with your offer in a timely manner, at your convenience ... not theirs. Own the negotiations!!

IrishExpat

Thank you all for the clear and objective advice.

I've worked out a pricing strategy and matrix and currently listening to a lot of Brian Tracy.

As this forum's all above give and take, let me link two very useful documents for the community:

http://100startup.com/resources/instant-consulting.pdf
http://100startup.com/resources/business-plan.pdf
http://100startup.com/resources/promotion-plan.pdf

pedroeibar1

Very basic, very American but a reasonable start. Do you have a partner in the venture to debate those points with?
Selling is selling, but selling a professional service usually means it's to an educated/sophisticated buyer, one where the US approach does not work very well, so be aware of that. Hope it is going well for you,

IrishExpat

pedroeibar1 wrote: »

Very basic, very American but a reasonable start.

The Brian Tracy material or the linked pdfs? On the Tracy material, it´s nothing I haven´t heard before, but has cemented a few thoughts I´ve had when selling, e.g. hygiene-factors and time management tips.

pedroeibar1 wrote: »

Do you have a partner in the venture to debate those points with?

I ´did´ try working with a partner, but the work ethic just wasn´t there. Nice guy to have a beer but employee mentality (clock off at 5, leave presentation work half done). He was a great man to talk all the same.

pedroeibar1 wrote: »

Selling is selling, but selling a professional service usually means it's to an educated/sophisticated buyer, one where the US approach does not work very well, so be aware of that.

Not to argue, but the ´US approach´?

I´ve done my homework and have competitors price lists / brochures, what they add and even had a few friends here sample their services and report back etc, plus with businesses I´m being very fair and offering a free trial and a LOT of extras with an online platform etc

pedroeibar1 wrote: »

Hope it is going well for you,

Thanks. It´s back to a one man band, but slowly building interest.

pedroeibar1

All sorts of things going on there Irish Expat, sign that you are thinking.:)

You have two separate markets, students (young) and business (mature). You need to decide which market to first go for. On-line possibly would work for the younger set, but the business sector would involve bums on seats if only because the employer (he who pays) wants to see what is going on. My guess is that the business sector would be more remunerative and faster to generate cashflow and you could then expand into ‘private’ – and even get leads from business for private.

Some people get bogged down on their website design – that is a mistake, concentrate on the business rather than tweeking the site. (Do not blame the site for not getting business, blame yourself for sitting on your ar$e tweeking the site instead of going out and hustling.;) )

My comments on ‘American approach’ - both items you referenced are American; the US outlook and sales planning are very direct/confrontational/in your face, an approach that is off-putting in most EU markets. Americans generally expect to close the sale very quickly, whereas in the EU more time is taken. The US model is ‘What are you selling, what does it do for me, how much does it cost, when can I have it, where do I sign?’ whereas the niceties of politeness are more usual this side of the pond.

The Americans are big into the homily stuff which grates on the average European. It is a totally different culture. In the US the standard greeting is ‘Hey, what’s up/ new/ happening/ goin on/ it at’ or words to that effect. News, what can you tell me? Europeans are different, that ask you how you are. ‘How are you, Come stai, Como estas/Que tal, Comment allez-vous? And they actually mean it.

Tracy spouts a lot of truisms and false sincerity that put my back up (but I’ve been around for quite a while). Stuff like – ‘It’s been my lifetime’s ambition to help folks like you reach your objectives ….’ (No it’s effin not, you are just like the rest of us and want to make money, except we are more honest about it!)
Nothing wrong with using the US approach when forming a business plan / thinking about formulating a sales strategy, just remember to apply EU ‘culture’ to it when putting it into use this side of the pond.

Junemoon

Hi All , new to this so not sure have I the right section . Anyone every sell a small business to a Multinational?

IrishExpat

Sorry for the delay and thank you for the long reply.

The more sales calls and networking I'm doing here the more I see your point on the American sales approach versus European/Spanish/Madrid - there's a lot of relationship building and it's a case of build trust before offering your service.

On your point about different market segments, I'm focusing on the mature/business side for a few reasons: cash-flow and future leads. With students (parents paying) it's a few classes to focus on exam-prep or a few doubts and that's the life-span of the customer (3 months max).

The method so far has been to drop-by, offer a sampler - 25 minute class, a free workshop or level tests for x employees; and then follow up. It's all go from January.

On the website; again correct. I did spend a lot of time tweeking as I had no cash for a designer, but that time should have been used to 'get out of the office'.

I'm currently renting a desk and resources in a popular co-working space; and would recommend it to anyone as a mid-way point between kitchen table and office overheads.

pedroeibar1 wrote: »

All sorts of things going on there Irish Expat, sign that you are thinking.:)

You have two separate markets, students (young) and business (mature). You need to decide which market to first go for. On-line possibly would work for the younger set, but the business sector would involve bums on seats if only because the employer (he who pays) wants to see what is going on. My guess is that the business sector would be more remunerative and faster to generate cashflow and you could then Yexpand into ‘private’ – and even get leads from business for private.

Some people get bogged down on their website design – that is a mistake, concentrate on the business rather than tweeking the site. (Do not blame the site for not getting business, blame yourself for sitting on your ar$e tweeking the site instead of going out and hustling.;) )

My comments on ‘American approach’ - both items you referenced are American; the US outlook and sales planning are very direct/confrontational/in your face, an approach that is off-putting in most EU markets. Americans generally expect to close the sale very quickly, whereas in the EU more time is taken. The US model is ‘What are you selling, what does it do for me, how much does it cost, when can I have it, where do I sign?’ whereas the niceties of politeness are more usual this side of the pond.

The Americans are big into the homily stuff which grates on the average European. It is a totally different culture. In the US the standard greeting is ‘Hey, what’s up/ new/ happening/ goin on/ it at’ or words to that effect. News, what can you tell me? Europeans are different, that ask you how you are. ‘How are you, Come stai, Como estas/Que tal, Comment allez-vous? And they actually mean it.

Tracy spouts a lot of truisms and false sincerity that put my back up (but I’ve been around for quite a while). Stuff like – ‘It’s been my lifetime’s ambition to help folks like you reach your objectives ….’ (No it’s effin not, you are just like the rest of us and want to make money, except we are more honest about it!)

Nothing wrong with using the US approach when forming a business plan / thinking about formulating a sales strategy, just remember to apply EU ‘culture’ to it when putting it into use this side of the pond.

pedroeibar1

Hi again IrishExpat,
Great to see progress being made. It does take time but momentum grows after the initial bit of inertia is overcome - a bit like a bike on a hill, once the start is made it does get easier. Do not be afraid to ask existing customers if they have any leads you could follow-up on. Good teachers develop a rapport with their students. Use that, but politely & gently. Also good to get an office workspace, a kitchen table is not conducive to good work and also an opportunity to bounce ideas off people & network.
Feliz natividad!