Acceptable risk and loss in negotiations

Welcome to Building Better Developers, the Develop and Work Podcast, where we work on getting better step by step, professionally and personally. Let's get started. Well, hello and welcome back. We are continuing our season where we're looking at mistakes that have been made. This episode, we're going to get into sort of a follow up, I guess, from the previous episode. We're going to talk about, we'll talk about trust a little bit and your ability to accept risk, but also maybe a little bit into loss. What is acceptable loss and contingency planning even? Now this story begins, as many happy stories do, with the purchase of my first car as an adult or as a off on my own, completely by myself adult. I'd been involved in car purchases before, but not essentially completely on my own. And I guess completely on my own is a little bit off because it was also with my wife at the time, but she was in pretty much the same boat I was. And we got a new car, we purchased a new car, we needed something that was going to last and all that kind of good stuff. That's fine. We had an extra car at that point, so there was essentially going to be a trade in. Well, when we looked at the value of a trade in, it actually seemed like it would be better for us to try to sell it to somebody. It was a difference of I think like $500 for a trade in and we figured we could sell it for $2,500 or $3,000, something like that. And this is before the internet was as big as it is. So there were ways to utilize the internet to sell, but basically you put an advertisement in the newspaper, which this was Chicago, so the newspaper reached a lot of people. But you put the ad in there, you say, hey, we've got a car for sale, or you have to do a one ad kind of thing. And then hopefully somebody would come take a look at it and make an offer. And we did that. And we had, and I'm trying to remember how long time it was, it was probably a couple of weeks, maybe something like that, that we had some people come by that took a look at it and really didn't get great offers. Usually people are wasting our time. Stuff that I think we were asking, I don't know, $3,000, $3,500, something more than we expected. And if you ask $3,000, somebody comes in and says, hey, I'll give you 500 bucks. Well, that ain't going to work. So we were going through that for a little bit and we ended up, we had a couple that were potentials and we ended up with a guy that was the salesman that sold us our new car, said, hey, I've got, I think it was like a cousin or a brother-in-law or something like that that's looking for a car. This would be perfect, but can we do it for, I think it was like 1900 bucks. And this may be a little off on the numbers. That's not really as important. And we said, okay, it wasn't what we were hoping for, but it was one, it was to somebody that we sort of liked the guy and we figured, hey, that's great. You know, this will help out somebody else and it'll all work out. So we said, yep, let's do that. So he sort of walked through the basic stuff. He said, well, okay, well, let's do this. And so we got, did everything, said, hey, here, we'll have the money and all that kind of good stuff. And so we're going to meet somewhere, I don't remember where it was, but we go to meet somewhere that was 20 minutes away from home or wherever it was. It wasn't at my place to swap the car out or to sell the car. And he was going to give us money. And like I said, so let's say it was 1800 bucks. Well, he gets there and he says, well, you know, my buddy only had 1850 on him. So can we just do this for 1850? Which I'm going to call BS. Yeah, that's, that seems like when you've gotten that amount of time, it's not like this was an immediate kind of thing that was done. This was, you know, he had, I don't know, days, maybe, maybe a week to put the money together and talk through all this. So when somebody comes to the table like that at the last second and they have a different value and they say, well, we just can't do whatever the number is, then they're just trying to, you know, they're just screwing with you basically. And this is one that, you know, he said, look, you know, we're, you know, we didn't, we didn't fight it too much. We basically said, hey, you know, we don't have, we don't really have a lot of wiggle room here. We're already giving you a good deal. And he's like, well, this is all this, you know, that's all they've got. So basically he was, you know, he more or less put it unless we had just walked away, but he put it in the situation and the more or less framed it as we either take it or walk away. Fifty bucks out of that for us was not a big enough deal. It's like, all right, I'm not going to give this since we hadn't had a, you know, a ton of offers. So that's fine. We'll just do that. We'll take it. We're good. And we walked away. Now the moral of this story is a little bit is you do need to think about the idea of acceptable risk or acceptable loss, because in this case it was, I mean, we're going to count it as a loss is that what we had planned on was not available. That was the 1900, let's say was not available. So it was 1850 and it may be, you know, off a little bit, but there's a percentage there that was small percentage. Essentially it's enough that we say, okay, no big deal. Sometimes you get this, if you go into a store and you want to buy something and you've got, you know, 98 cents, but it's a dollar and they say, forget it. Just throw the extra two cents. And sometimes the, what is it? a penny kind of thing is it just, you know, hey, use this little pile of coins. So yeah, it's percentage wise, pretty close. And people are usually going to be like, eh, whatever. When you walk into something, you should know what that whatever is. Is there a limit to that? And particularly for this situation, because if somebody comes in and pulls a, essentially pulls a fast one on you and says, Hey, well, we can't do what we already agreed on. Then you have a decision to make. And do you walk away or do you say, okay, that's still within acceptable loss or acceptable decision for me. And this is huge. If you go into any kind of car purchasing and there's other areas, but cars are, are like just notorious for that, where you'll walk in, you say, this is what I'm going to do. And the next thing you know, you've got them talking to the manager and they say, well, you know, you should probably buy this or you need to add this or there's this extra fee or there's this other thing we need to do. And suddenly, you know, what you bought for $10 is not going to cost you 15. There's some, it's, you know, it's not quite that bad, but sometimes you can see a sizable jump and when you're talking car prices, especially new cars, when you're talking, I don't know, minimums, minimums are 15 grand, 20 grand, and easily you can pay 30 to 40 grand. So if they swing 10%, that's several thousand or at least a few thousand dollars difference, which can be a big deal. So when you go into these things, you need to know sort of what the acceptable level is beforehand and even consider even for him, what sort of role play that out a little bit. What if when I go into this negotiation, somebody changes the rules on me, something that we've already agreed on, they go back on. And there are some, I have some other instances of such thing that have to deal with or experiences I've had that had to deal with contract negotiations for a job and for employment. Those are some things that you're going to see fairly regularly too. Well, not fairly regularly. It depends on who you work with. If you work with a, if you subcontract with companies, there are some that that is like their modus operandi is that they will get you basically to the finish line. And then at the last minute they'll say, Oh, you know, we need, we can only do this, but for 50 cents an hour less or a dollar an hour less or something. And it may not seem a lot, you know, even if it's $25 an hour down to $24 an hour or something like that, it may not seem like a lot, but that's what they do. And I had a situation where I'd literally walked away from it. I said, no, I'm not, I'm not working with you guys whatsoever because it had already talked down. I said, here's my limit. They tried to push it from there. And I said, no, done. And they didn't really, I don't think, which is probably part of their problem. This will be another story. They didn't really come back and try to say, Oh wait, I'll tell you what, we'll make it work. No, I have had that. I've had some situations, which again, in employment type stuff, where they, somebody comes in and they sort of draw a line in the sand and realize that that's not really as firm a line as they wanted to. And he's back off saying, I'm sorry, I can't do it for that. And the next thing you know, they'll, they'll make some adjustments. Now that's not always the case, but it is something to consider. And when you're talking about salary negotiation, when you're coming in for a job and you're negotiating salary, that's a key kind of thing is know what your, your minimum is, but you should be asking for more than your minimum. If you get just your minimum, you're probably in trouble. You should be getting more than that. You should be getting something out of it. That's, you know, that is better than whatever your, your minimum is because it should be based on some of it's going to be just your costs and stuff like that, or your, you know, your cost of living and things, but also whatever your skillset is and your experience and things like that, that if you start nickel and diming it, then you're, you're just setting yourself up for failure. So regardless of what your situation is, be thinking about what, and particularly it's, it's very helpful to do this before you get into that situation is think through what if, what if, you know, the, with a car, like car sales, a great opportunity, cause there's a lot of things there. What if I'm buying a car, a used car and it comes to me and now it's got an extra dent or the tires got swapped out for tires that were in a lot worse condition. There's some things like that that could happen. And what do you want to do? Do you try to barter with them and say, Hey, we need to change the price. Or do you just walk away? And sometimes that's the best option is to say, you know what? You have not dealt with me in a, an honest and straightforward way. So I'm done. I'm not going to do any business with you. But if you want to, if you, you do want whatever that thing is they're selling or that they're offering, then you may have to adjust your, your approach. And you may want to do some give and take. So you may say, Hey, well, you know, like this case, well, you know, you don't have as much money, but how about we do this? You know, let's take this different approach. And in the world of contracting and business and stuff like that, and salaries, there's so much that can go on. There's so many little facets that can go into your compensation, whether it's a contractor or not more than employees are probably even more so, because you got to figure you have your, you have your vacation time and your sick time and your, your benefits like health and dental and maybe 401k stuff or profit sharing or bonuses and salary. And there's so many things that can go into your package, your employment, your compensation package that if they try to push in one area, you can come into it and say, no, then I want you to adjust this other area or vice versa. Vacation is always a great example is I've had multiple situations of people that I've talked to that have said, Hey, I'm getting a new job, but I don't know if I'm going to be able to do that because I've got this one week vacation that I've already got scheduled a month from now. And if I take this new job, I'm not going to have any sick or vacation time yet. And usually it's going to say, Hey, well, just see if you can essentially go, you know, quote in the hole and say, look, I want to have some, you know, some sort of credit vacation time, because I've got this thing that I've scheduled and either I have to wait until after that vacation to start work with you guys, or I can start earlier, but what I'm going to want to do is be able to treat that like vacation and just let me go in the hole and then I'll be able to earn it back later. Some companies won't do that. Some companies are fine with that. And they're like, you know what? That's okay. We're you're earning, you know, whatever it is, a 0.8 days a month or whatever of, of PTO time. And so we'll let you do this. We'll write a special, you know, cause sometimes it's a special thing. HR normally says you can never go zero, but it's just like, Hey, we'll write that into your contract. You can go down, go below zero. But then after that, you have to, you know, you can't take a vacation again for, you know, six months or whatever it is until you build up that, that time again. So there's a lot of ways to go into these discussions. Now, sometimes it's very like the car thing was probably, it's just not a lot of ways you can go with it. It's basically you either, you know, that was basically either take the money or walk away. It's not like we could say, Oh, well, in that case, we'll, I don't know, take one of the tires with us or something like that. You know, there's, there wasn't a lot of things to work with. It was pretty much stuck on take it or leave it. But when you get into a lot of other situations, you're going to find that there are many options to make adjustments. And if you're going into a situation that could be a take it or leave it kind of situation, then this is where it's really important to think about what is, what is my leave it point? What is the point where I'm going to say leave it and you need to, that's another one. You got to really think about this before you get into them. Cause once you get into those situations, there's, there's emotion and other things that are not very helpful that come into play. For example, I, you know, if that guy had done that at my place, I would have simply said, okay, go drive home. But the fact that I had already driven, you know, 20 minutes or whatever it was to deal with that. And I'd set everything up and done, you know, gone through all of this planning to get that done, ticked me off, but also was like, gosh, I don't want to have to go through all that crap again. I just, so it was worth it to me and he probably knew that. And that's why he, he pulled that. But, you know, if I was a little more savvy, I would have said something like, okay, this is a deal. Yeah. This is what I expect from me. If it's not there, we walk away and then walk away. If it's not there, you leave. Just, you know, that may be sometimes that's the easiest way to do it. And sometimes it doesn't hurt to set that up, you know, state that upfront. Say, look, here's the thing. If I have to invest time or something like that into this, this negotiation, then if you pull out or if you don't deal honestly, then maybe there's going to be some sort of cost or, you know, maybe it's like, okay, you need to give me some earnest money upfront or see, you know, there's things like that. Which you do see in like, for example, housing, if you want to buy a house, you have to put, when you put an offer in, you have to put money down with that offer that says, Hey, because you're taking this off the market and it will cost you money to put it back on the market, then this is the money that you get as sort of a payment. If you have to put it back on the market, if the buyer or the potential buyer backs out for basically for whatever reason, without, you know, with it within reason, you know, if they find out the house is falling apart or something like that, then that's okay. But that also depends on how the contract's written. So this is just, you know, really sort of the lengthy way to say, you know, Hey, when you walk into negotiations, think about it beforehand. Think about what you're, you know, there's sort of a, what you want to push for, but then also what you, what is unacceptable and then make sure that you have defined for yourself what unacceptable is beforehand so that if it hits there, you can just sort of like check it off against your list and say, Oh, nope, sorry, that's unacceptable and walk away as opposed to trying to think through it at that point. And, you know, when you're already emotional and all these other things are involved, if you do that, I think you'll find that things will work a lot better for you. And like I said, I think the employment and salary types of discussions, particularly if you're dealing with like contracting or third party groups or something like that is amazing how often that kind of stuff gets just brought, just brought into there and is brought up as part of the discussion because you may have a, like a recruiter that really, you know, they get paid if you take that job. So they want you to take the job. They're almost, they're really on the side of the employer in that case. And then, you know, yeah, they would like you to get more money because there's a percentage, but they would much rather you have less and they get the money than you get more and they don't get the money. So there's things like that, that you've got to think through when you walk into these, but don't be afraid to ask and don't be afraid to walk away. And that being said, I think it's time to walk away. So go out there and have yourself a great day, a great week, and we will talk to you. Next time. Thank you for listening to building better developers, the developer podcast. You can subscribe on Apple podcasts, Stitcher, Amazon, anywhere that you can find podcasts. We are there. And remember just a little bit of effort every day ends up adding into great momentum and great success. One more thing before you go, the developer podcast and site are a labor of love. We enjoy whatever we do, trying to help developers become better. But if you've gotten some value out of this and you'd like to help us be great, if you go out to developer.com slash donate and donate whatever feels good for you. If you get a lot of value, a lot. If you don't get a lot of value, even a little would be awesome. 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