To conclude this three-part series about successful negotiations, we will end with timing. I specifically want to discuss timing as it pertains to re-signing leases. In the previous two articles I spoke about my tough, but lovable, father-in-law, Walter. Despite being a high school dropout raised during the Great Depression, he became a multi-millionaire businessman and a master of negotiation.
There are many aspects to negotiating successfully, and timing is of utmost importance.
As far as renewing leases, timing is critical. You cannot wait so long to renew your lease that your landlord knows you don’t have time to find a new space, build one out, or go through the hassle of moving. Even though my husband is a general contractor, securing a space, building it out, moving in and being operable is at least a four month process in most cases.
If you wait too long to renew or, even worse, let your lease run out, you are at your landlord’s mercy. You have lost your leverage because they know you can’t go anywhere else and provide your customers continuity.
Recently, I heard first-hand a horror story of a very prominent studio in a major city. Their lease ran out in the fall of 2019. They didn’t renew and just let it lapse into another month, then another month. In the meantime, another landlord purchased their building. The new landlord doubled their monthly lease payment in January of 2020. We all know what happened next- COVID-19. Unfortunately, this Pilates studio closed down permanently in April 2020.
Instead, follow these five steps to take charge of your business’ lease renewal:
- Read your lease. Make sure you know the terms of renewal.
- Pick a date that you absolutely must have your lease signed. Once you have the date in mind, mentally move that up one month.
- Get creative. When we were initially negotiating our current leased space, my husband so brilliantly asked our landlord, “Have you ever considered a graduated lease?” The potential landlord said, “No.” My husband quipped respectfully, “Well…why not?” A long pause from the landlord followed, so my husband quickly added, “Right now we are cash poor because we are just starting out. Can you make it cheaper the first year and then recoup your money in subsequent years by adding more onto each monthly payment?” I’m happy to say our landlord complied and the lower initial payments of the graduated lease really helped us out during our first year. Due to COVID, maybe you too have some space to get creative.
- Ditch the procrastination. Do you want it perfect or do you want it done? I had a business coach tell me this once and I absolutely hated it. I mean, I grew up in gymnastics. Perfectionism is my sport. Just like how you hate a specific exercise in Pilates because you need it, you may hate this statement because you need it. Perfectionism is another form of procrastination. There’s nothing perfect about procrastination. Schedule the appointment with your landlord and get it done.
- Embody confidence. Walking into the negotiation session, put your shoulders back, stand or sit up tall (like you tell your clients to do all day) and breathe deeply. (Listening to a Lizzo song beforehand can’t hurt either.) Breathing will help you to keep a clear head, focus on the task at hand and connect with the person in front of you. It’s easy to flippantly say, “don’t be emotionally tied to the deal” when you may really need a lease negotiation to go your way to feel secure. However, people can sense desperation. Whether you’re selling sessions or negotiating a lease with a tough landlord, exude confidence and it will increase the likelihood of things going in your ideal direction.
Again, my father-in-law was a high school drop out. He negotiated deals with people that far exceeded his level of formal education. However, he became undaunted by this because he was confident and well-practiced. It probably didn’t hurt that many times the people he was negotiating with may have underestimated him. But the important thing was that he didn’t underestimate himself.