Victoria Pychon’s post “Hard Bargaining” reminds us that we have to live with every agreement we make.
“Yet it is Lou who taught me that the deal you drive too hard is the one that will come back to bite you.
Why?
Because you have to leave enough profit in it for your negotiating partner to survive.
Once, Lou says, his company drove so hard a bargain, leaving so little profit to its bargaining partner, that the contract had to be renegotiated, on terms less favorable than originally offered. Had the stronger party been content with the deal that could have kept its negotiation partner healthy, it would not have had to take a worse deal months later based upon the other's inability to comply with the harsher terms originally imposed.
You not only have to leave them "face," you also have to leave them with enough money to survive.”
Judging from decreased traffic and lower check averages restaurateurs understand that we are in a recession. There are also a lot of deals out there now. The temptation is going to be substantial for you to drive the very best deal you can. Additional pressure is being put on you by your customers to offer them concessions.
Taken in the aggregate you will want to pummel your vendor, do not do it. Your vendor has to survive to be able to fulfill the terms of the agreement. There is no benefit to craft a deal that results in the insolvency of one the parties. The same caveat applies to you, do not craft a deal which you can’t fulfill
