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2013

Negotiating_Body.jpgby Robert Lerose.

 

Conflict is an inescapable part of life, but partners in business have a lot riding on the way they handle it. Even co-owners who normally run a smooth operation may not always agree on every aspect of managing and growing their enterprise. These tensions don't have to throw a business into chaos necessarily. Some disputes can be easily resolved, but others have the potential to spiral into bitter feuds that could lead to the dissolution of the business in extreme cases. So, before a conflict irreparably disrupts your business, consider these solutions for constructive negotiations.

 

Listen, don't judge

A negotiation is sometimes thought of as a war where both sides must be tough and unyielding to get what they want, but this is a misconception. Instead, co-owners should view it as a process for maneuvering inevitable speed bumps while keeping their eyes on the overall bigger prize—preserving their business.

 

"Your objectives should be to leverage the strengths of each business partner and recognize the strengths that each person brings to the company," says Florida-based small business consultant Denise O'Berry.

 

For example, a very common dispute among business owners involves one partner feeling like he or she is handling more than their fair share of work. To avoid this, O'Berry suggests that the owners document a clear vision of their company—what they're trying to accomplish, the talents and skills that each side brings, the roles and responsibilities of each partner—at the beginning of their relationship to guide them in future situations and mitigate confusion. 

 

To keep a negotiation amicable, O'Berry advises withholding judgment about your partner's intentions. "Listen to what the person is saying at face value," she explains. "As you're listening, probe to understand more about where they're coming from. Don't just take a position against something. Listen to their concerns."

 

Asking open-ended questions can help you get to the bottom of things in a non-threatening way that engages the other person and shows respect for their position. For example, when one partner raises a concern or objection, you can ask: "Why is that?" Or, "How do you think we would do [what you're suggesting]?" Or, "What is our approach?" "Open-ended questions like these [clarify] the issue so you can resolve it and make that person feel comfortable," O'Berry adds.

 

Be flexible and don't be afraid to consider outside help

Each negotiating session should have a particular goal to keep things on track. The goal can be as perfunctory as hashing out the ground rules and setting up schedules in early sessions to a more substantive agenda later on. While you should always remember what you ultimately hope to accomplish by the end of the negotiation, it's wise to be flexible in what you're willing to accept.

 

"You should always have in mind what you can do if the negotiation doesn't work out," says Bill Painter, president of Tennessee-based Business Negotiation Services. "Have a fallback position because then you don't feel trapped to perhaps accept a bad deal." Painter suggests knowing when to walk away from the negotiation table—the point at which it doesn't make sense for you to continue—and seek redress elsewhere. One alternative is to bring in a mediator.

 

Negotiating_PQ.jpgAccording to Painter, a mediator primarily facilitates the negotiation—such as keeping things neutral and making sure that all the relevant points are addressed—while both sides continue talking. "The mediator acts as a facilitator and that would be very helpful if people are struggling to get their point-of-view across or there's unequal strength levels," Painter explains. For example, "one side is a very accommodating person and the other side is a shark. Then you want to be able to have the person who is more timid to be able to state his case in a safe position. A mediator would be good for that."

 

Even though each partner might have a specific function in the life of the business—one partner could be the "ideas" person and the other partner might put those ideas into practice—Painter admits that questions about pay and ownership can sometimes be hard to assess by the owners themselves. He suggests bringing in an evaluation expert to help determine what each side is contributing. In any case, disputes should be handled promptly and professionally for the sake of the business.

 

"You want to keep the business relationship in mind," Painter adds. "You don't want to get personal with the other person. Don't let things fester. [Otherwise] you're probably going to see that business dissolve or one of the partners leave because you can't maintain that tension forever."

 

Put the agreement in writing

Conflicts may be unavoidable, but they don't automatically have to tear the owners apart. On the contrary, employing a measure of reason and a clear-headed examination of the situation may be all it takes to settle disputes to everyone's satisfaction.

 

That's been the experience of Dave Howell, owner of Blue Planet Marketing, a Texas-based consulting firm, and a SCORE mentor in the San Antonio chapter. Howell owned an insurance company with two other partners. One of the partners—who was not an original founder—felt that his contribution and value to the business had gone up over time, and he deserved a bigger share of ownership. Because it was an insurance company, it was easy to track the revenue he had generated.

 

"He contributed more than what anybody had thought," Howell says. "We did some investigation and analysis, and found out that what he was thinking was actually correct, so we increased his share from five percent to 10 percent."

 

With a different company he owned, Howell and his partners were approached by an outside party who wanted to buy it. The contributions of the four partners were not equal, which raised serious questions. In the end, they were able to hammer out an agreement among themselves—but, more importantly, Howell was shocked to see that he didn't have anything in place to address the situation of a buyout before it came up.

 

When he mentors business owners these days, Howell urges them to consider issues that could arise in the life of a growing business and figure out a method for resolving them in writing before they flare up. "Think through all of these issues upfront with your partners and put them in a contract or bylaws, so that when the contingencies occur, they'll all work out."

 

As with any binding contract, particularly one as important as spelling out the duties in your business partnership, it's likely a good idea to consult with a lawyer to ensure all parties are treated fairly. To get a sense of some of the terms that an agreement can spell out, or for those who prefer a more do-it-yourself approach, resources such as LawDepot and Partnership Agreement Template provide customizable models for business co-owners. 

 

Negotiation takes clear communication, respect for the other party, knowing when to compromise, and remembering that the ultimate goal of any dispute is the ongoing survival of the business itself.

ChangingNames_Body.jpgby Heather Chaet.

 

Before the launch of your company, you may spend hours, days, and, yes, months thinking of that just-right name. You begin your journey into the business world, but soon a slew of customer feedback, repeated misinterpretations of your product, or (gulp) a call from your lawyer can put that name choice once again at the forefront of your agenda. So, when do you make the hard choice to change your company’s name? We have four scenarios answering the “Why?” and “How?” of a name switcheroo.

 

Scenario #1: A name switch to reflect an evolved business and attract new customers

Jane Glazer started her business in her home in 1983, but now it is a 100-employee company, producing two national catalogs and reaching 35 million people annually. As her business evolved over the years, Glazer realized the previous name—Home Trends—wasn’t properly reflecting everything her company now offered, and it wasn’t attracting an essential piece of the marketplace: the younger demographic. As detailed in this interview with CBS News, she switched her name to QCI Direct, with the “QCI” short for “Quick Cook Incorporated.”

 

During the first two months the new QCI website was live, sales doubled. But that successful transition took hard work. “It takes a consistent rebranding effort to make a new name work. You definitely need a plan and to evaluate the plan along the way. It involves a lot of small and large details—from the logo on your stationery to the name on the thousands of boxes we use to ship out orders,” says QCI Direct spokesperson Kyra Mancine. “We also upped our PR efforts this year to get the name change out there. It has worked. We’ve been [featured] in many media—print, TV and newspaper—and won awards as well, all under the new QCI Direct name.”

 

Scenario #2: A name change as part of brand growth

“This summer we changed our name from Laniado Enterprises to Main Merch for several reasons,” says George Fox, marketing coordinator of Main Merch, a company that owns and operates a handful of e-commerce websites. But this wasn’t the first time the company has changed its name. “The company began seven years ago in a New York University dorm room. The founder, Roy Laniado, began by selling t-shirts from his dad's beachware store, Bargain Beachware, on eBay. He soon started a website, WearYourBeer.com,” Fox recalls. “But vendors were wary of partnering with an online-only brand, so Roy created the name Laniado Enterprises because he thought that it would sound like a more professional company with a brick-and-mortar presence.”

 

With 55-percent annual growth as proof, that name switch was a huge success and allowed the company to step beyond the beer realm. “We began acquiring more vendors while branching out into different product niches—superheroes, TV show merchandise, movie merchandise and so on,” says Fox. However, Laniado Enterprises wasn’t fully working. “The name Main Merch is easier to spell and comprehend, especially over the phone. Main Merch is also a much shorter e-mail address,” notes Fox, “[In addition], Roy Laniado, the founder and president, didn't want many of the third-party people we work with to know right away that he was the company owner. A lot of service providers would [treat Roy differently] and didn't seem to be as genuine as they might be if they were just talking to someone who worked for the company.”

 

The Laniado Enterprises name also didn’t reflect the essence of the company. “We wanted our umbrella company to have a more fun, light-hearted name that still sounds professional. We want vendors and partners to know that we are a couple of guys in our late twenties that grew up with this pop culture and really get what we're selling. We wanted to make sure that if any of our customers stumbled upon the umbrella company, they wouldn't think of us as suits, which the name Laniado Enterprises seemed to infer,” says Fox.

 

Scenario #3: A change because the current name doesn’t reflect how consumers think of your product

CEO Steven Sashen started his company—a “modern spin on the traditional barefoot running sandal”—with the name Invisible Shoes. But he soon realized the folks buying his shoes didn’t think of them as invisible or wear them that way. “We found that our customers began using our product in ways that were not consistent with the name. They started decorating them and making them more visible,” says Sashen, “Our new name, Xero Shoes, is more brand-able.”

 

Sashen notes this brand transition has come with some bumps in the road. “The biggest  challenge has been timing—we've had the new name for a year. We've been putting it on our product for six months. But the website build has taken way longer than expected. We've had a few trade shows and magazine articles where we needed to use the new name and special deals for advertising that we needed to jump on, well in advance of [the website] being ready.” Sashen’s main tip? “Don't expect it to go smoothly. Expect a transition period.”

 

Scenario #4: A change to avoid a legal name war

You may do all of the legal research and due diligence before selecting your name, but sometimes even that isn’t enough, as Eshe Glover, owner and “idea maestro” of BluePepper Public Relations, can tell you. Glover changed her company's name to BluePepper from Peppercorn PR on January 1. “We vetted the [former] name and filed for a trademark. Two years later (trademark still pending), we received a 'cease and desist' letter from an attorney claiming our name infringed upon their client's trademarked name. After several conversations with our attorney, we opted to change our name,” Glover explains. “We were a young firm and didn't want to potentially have to change our name years later after we were more established.”

 

Glover details all of what goes into a name change. “Before deciding to change our name, we pondered the impact on the firm, on clients—past, current, and prospective—and on brand awareness. [We also looked at] the opportunities a new name brand presents, as well as the financial investment associated with the name change,” she says. “After deciding on our new name, we pondered how to increase brand awareness, how to seamlessly transition to and unveil the new name and brand, and what other changes—i.e. services—should be made simultaneously.”

 

Glover suggests selecting a target date for completing the rebrand and to use the
deadline as a motivator. “Allow a minimum of six to 12 months to roll out the new name and/or brand. This will ensure you have enough time to notify all clients and customers and transition 'on paper,’” notes Glover. As you venture through the ins and outs of the switch, Glover encourages owners to outsource projects. “Hire others—a graphic designer, a web master, a trademark attorney, a PR or marketing agency—to assist you, as necessary. Trying to save money by doing it all yourself, unless specifically experienced in the various areas, can ultimately cost you more money, time and frustration,” says Glover. It is a big endeavor, possibly one of the most important ones you may take on, but Glover notes a name and brand revamp can be a positive move. Says she: “View it as an amazing opportunity to reinvent your firm or increase brand awareness.

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