So the joke goes like this.
A young boy is being teased on the school playground. The other kids think he is stupid. One kid says he can prove how stupid this boy is. He takes two coins out of his pocket and shows the kid a nickel in one hand and a dime in the other.
“Which one do you want?”
The boy takes the nickel.
“See, I told you he was stupid!”
And the kids wander off to tease someone else.
A teacher witnesses all this and walks over to check on him.
“Don’t you understand that a dime is worth more than a nickel?”
“Sure, I do.” The boy says. “But if I ever took the dime they would quit giving me nickels.”
That’s one of my primary business principles. Never take the dime.
I am regularly put in positions where I can take the extra profit or do the right thing. I can do only what benefits me immediately, or I can do what’s best in the long run. Even though everything in us screams to take that stupid dime, we have to take the nickel.
I wish I could say I have always done it right, but I haven’t. The whole purpose of these posts is to encourage you guys to be better men by telling you what I failed at. There are things I know and do right. There are things I understand with absolute and unwavering conviction. Then there’s the rest of it. The stuff I just learned the hard way.
Two recent situations explain this.
One. I still sell on ebay. Several times, I have been ripped off by unethical buyer who file claims to get free stuff. They see an opportunity to steal my stuff, file a claim that they never got it or got the wrong thing, I am forced to refund the money and they get away with it. It has happened enough that I am not shipping internationally anymore.
A few months ago, I sold a very expensive part for a Harley Davidson motorcycle. It went to Italy. The shipping was high, the part sold for less than it was worth, but still pretty expensive. The buyer claimed I sent him the wrong part and demanded a refund. After a lot of hassle, he was told to return the part and his payment was taken from my account.
He had fixed his bike with my parts. He put the old parts in the box and returned them to me. I received something that I couldn’t sell, lost the money and nobody could do anything about it.
That guy took the dime. Where he might have had opportunity to get lots more parts from me and maybe even better deals, he stole from me instead. He cut off any future opportunities with my parts collection. He took a dime that wasn’t even offered.
Right now, I am in a position that looks like a very profitable, long term business opportunity. I am being offered part ownership and a good salary by a local business that I have worked with for a while. They like me a lot. They trust me to do what’s best for the company. They trust my judgement in critical decisions. Want to know why?
They were forced into bankruptcy early this year by someone taking the dime, and trying to get more. The legal expenses and time involved hurt the company. They found people inside and outside the business stealing money and almost lost it all. I volunteered to resign. I told them they couldn’t afford me right then. I offered to continue helping make sales and drive business to them, but they needed to drop my salary from their expenses.
That was a hard nickel to take, but it was the right thing to do. It was the best thing for them and apparently it made a huge impact on that relationship. Now that they are through with everything that was crippling the business, they are determined to make it benefit me.
Another primary business principle I learned the hard way was this one. If anybody compromises, everybody compromises.
Whether selling sound systems, security equipment, quoting event production and rentals or whatever; this one saved my butt.
One scenario. Client wants to hire me to run a show for several days. They need all the gear and a tech to operate it each night. I work out a fair price. They want to argue about the money. Without stressing out or arguing back, I tel them how we can cut some cost. Maybe less monitors. Maybe they get one of my less experienced techs, not the big dogs. Maybe they don’t need quite so many mics. Get the idea?
They want you to compromise your price, they have to compromise, too.
They want the same product for less money. Sometimes I will budge, depending on the client and the circumstances. I can take the nickel when it’s appropriate. But, I also know that some clients are just determined to force the dime from your hand. Even if you didn’t offer it.
Some guys negotiate like this. No matter what price they hear first, act like they were hit in the face with a brick. Even if they are given a sweetheart deal right from the start, they act like they are being robbed. It’s in their nature.
Decide what the deal is worth. Make it fair to everyone. Make sure it’s worthwhile to pursue and make good decisions. You wouldn’t sell a $100 dollar bill for $50 would you? You wouldn’t be in business very long like that. Don’t be afraid to walk away from a bad deal. You don’t have to take every gig. Decide if it’s makes sense to take that deal. Does it benefit you and your family?
I gave up a lot of good years and money when I didn’t get good advice and follow it. I made stupid decisions. You can survive in business and do well by being ethical and smart. The ethics will build relationships that benefit you in ways that can’t always be explained. Being smart will tell you which relationships to avoid.
If you play it smart, the nickels keep coming.