5 Negotiations That Save You Money
Posted on September 7, 2010
Filed Under Business, Computers and IT, Financing, Leasing, Negotiation, Printing and Graphic Arts | Leave a Comment
While companies slug through this financial crisis, their equipment ages, frequently breaks down and needs replacement. Business owners and customers want technology that runs faster and leaps tall buildings in a single bound.
How do you pay for these Superman wonders? What financing is best for your business?
After you decide to replace the five-year-old “antique” digital press, add new production capacity or update your computers, you enter the confusing finance world. Traditional payment options are cash, the bank or leasing.
What’s right for your business? You want to invest your money wisely. No surprises! No “Gotchas.”
There are five negotiations in every equipment decision that will save you money.
- Equipment Cash Purchase Price. Focus on the right equipment, not the monthly payment. Keep your eye on the total cash purchase price. Every $1,000 discount reduces the lease payment. The lease negotiation is the fourth step not the first. To receive the biggest discounts, negotiate as if you are a cash buyer.
- Trade-In. Check out used equipment dealers, online sites or talk with industry experts to determine values. Face the hard facts. The used market is flooded with equipment, so don’t expect much for yours. Do not mix the trade-in negotiation with the new purchase.
- Existing Lease. If you still owe on the old equipment, negotiate the payoff yourself. Do not allow the new equipment supplier to negotiate with the incumbent leasing company. Early termination payoff discounts may be possible if you negotiate yourself. Reread the old lease contract to uncover possible discounts.
- New Equipment Lease. All leases contain “Gotchas.” All leases are negotiable, if you only ask. If you are uncomfortable negotiating complex lease lingo, find an advocate to negotiate for you. The negotiator who will save the most money will be familiar with your equipment, current market lease rates and equipment lease contracts. After ink is on paper, options shrink.
- Maintenance Agreement. Some leasing companies bundle the lease and maintenance costs into one payment. This can cloud early lease buyout and termination payoffs. Keep maintenance payments on separate contracts. Ask questions if service is not satisfactorily defined.
To learn more and receive our complimentary reports, “Top 10 Lease ‘Gotchas’” and “10 Tips for a Better Lease,” go to www.IndependentLeaseReview.com/workshop-keynotes-lease-negotiating.
Leasing Term # 194 – Stipulated Loss Value (SLV) Table
Posted on August 5, 2010
Filed Under Business, Computers and IT, Financing, LeaseSpeak Dictionary, Leasing, Negotiation, Printing and Graphic Arts | Leave a Comment
Will the Stipulated Loss Value (SLV) Table look good with two chairs or four in my office?
That’s a crazy question! The SLV Table is not something you sit at. But you will wish it was an expensive oak table if you ever have to pay off a leasing company for damaged or missing equipment.
You say you’ve never received the SLV Table with your lease contracts. No surprise. Unless you ask for it, you won’t receive it.
Some leasing companies act shocked at your request. They say, “No one ever asks us for that, why do you want it?” A bunch of baloney there! Don’t fall for it. You need to see and understand the SLV Table before signing a lease.
Every leasing company has this information. It’s part of their internal documentation files. How else can they determine how much you owe if equipment is damaged or disappears? And of course, the SLV protects their return on investment. Big time protection as you will learn.
Sometimes the Stipulated Loss Value Table is contained in a lease paragraph. Confusing language abounds. Hire an Einstein to decipher the pay off puzzle. No Einstein on your staff? Then you need to require a copy of the SLV clearly spelled out.
What is the SLV Table? Holy Guacamole! (That’s another of my technical terms.) It means you are in deep poo if your equipment is damaged, lost or unavailable to return at lease end.
Day one of the lease, if the equipment is damaged after the lease commences but before you make the 2nd lease payment, you owe 110% of the equipment purchase price.
That means on a $1,000,000 lease, after making one payment of $84,440, you owe the leasing company $1,100,000. Now that’s a quick profit for them.
Worse yet, after making 12 quarterly payments of $86,440, you’ve paid out $1,037,280. If all assets are destroyed, you still owe the leasing company an additional $350,000 Stipulated Loss Value. You have no equipment. You’ve paid out $1,387,280. That is comparable to 19.95% interest rate at the bank.
TIP: Get a copy of the Stipulated Loss Value Table. Negotiate it. Always!
REAL LIFE: In my workshop at the Association of Legal Administrators Annual Conference in May of this year, I asked the audience how many knew of or received the SLV Table with their stack of lease contracts. Out of 70 law firm administrators, only one in the room said he received the table. His table showed the value of the equipment at 35% of the purchase price after the 36th month of a 60-month lease.
He called us in to help negotiate fair lease terms and a reasonable SLV. On his firm’s $500,000 technology lease, we negotiated the SLV down from 35% to 15%. Should there be a total loss of equipment, the firm or their insurance company would owe the leasing company $75,000, not $175,000. In my book that is serious loss prevention savings.
Moral of the story: 1) Always ask for a copy of the Stipulated Loss Value Table and negotiate it. 2) Everything is negotiable, even the leases you already have if only you ask.
www.IndependentLeaseReview.com
Why should you care if men and women negotiate differently?
Posted on July 22, 2010
Filed Under Business, Negotiation, Professional Speaking | Leave a Comment
Recently, I was asked to present a negotiation workshop at a conference with more than 30,000 attendees.
While the industry is male-dominated, women have consistently risen through the ranks and today hold prominent positions at the top of many companies. Women sell equipment, run large purchasing departments and own businesses in this industry.
Knowing this, I proposed my workshop “Men and Women do it Differently…Negotiate, that is!” As you know, I speak on how we all need to understand the opposite sex as well as our own gender when we negotiate. This holds true in business and in our personal lives.
How well we listen to others and communicate with them directly affects our success and happiness. How we read and interpret body language is a big part of this too.
The speaker selection committee wanted my negotiation message. However, the committee did not think attendees (who they said are usually sales men and male business owners) would care that much about communicating better with women.
This is a shame, and very short-sighted. Men and women communicate differently. Understanding and appreciating these differences will only help everyone in business situations or, for that matter, in relationships they have throughout their lives.
The sad thing to me is that the committee consisted of three men and three women.
“Men are taught to apologize for their weaknesses, women for their strengths.” - Lois Wyse (1926 – 2007), Advertising Executive, Author and Columnist
“I haven’t even had a chance to be unreasonable yet!” – Chris Simms, Controller, Bickerstaff Heath Delgado Acosta LLP
What do you think about gender communication styles? Do you have a personal story you’d like to share?
If you want to learn more about how to improve your negotiation skills with the opposite sex, check out this CD.
“Everything is negotiable, if only you’d ask!”
- Mary Redmond
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