Agreements in Advance

I was working on another deal a while back and it was for a residential mortgage, not something I normally work with. I brought the deal to Bill, an acquaintance through the local Chamber of Commerce. I trusted what I knew of Bill and I had always liked what appeared to be his approach to doing business.

This deal was for a large property and I knew it was not going to be a simple process. Now, Bill works for someone else and he does not have approval to make deals with me directly. From the beginning I wanted to have a deal in writing simply stating that we would share all fees. If the deal did not go through, I would be owed nothing, but it was my client and I was not going to just hand him off.

Bill kept telling me that his boss would not sign any form of agreement with me until they knew if they could fund it. This was completely backwards to me. They wanted me to release all of the information I had, but would not give me any form of guarantee, nor would they discuss what sort of fee sharing split they had in mind. This is a classic example of putting the cart in front of the horse. I should have walked away at that point, but I was trusting of Bill and wanted to see this deal go through.

It looked like the deal was going to go though and Bill spoke with his boss and came back to me with his idea of fee splitting. We were not on the same page. I had lost my bargaining power however, since they now had all of my client’s contact information. It turned out they couldn’t do the deal, so I moved onto another connection of mine who was willing to sign a confidentiality agreement and fee splitting agreement before I would even release any information to him. That is how it should always be done from the beginning.

We all learn from our mistakes, but hopefully you can learn from some of mine and save yourself some time!

Agreements in Writing

I have a very good friend, Sam, who I have also been doing business with. When we began working together, we verbally agreed that I would receive a predesignated percent of sales for any customers that I bring to him. He even acknowledged that this would be for the life of the client. Being the stickler that I am, I asked for an agreement in writing. He didn’t feel it was necessary but was willing to appease me by sending me an e-mail.

The sum total of the e-mail was: “[X]% for all sales referred.” Trying to be a trusting friend, I let it go.

Five months later, almost to the day, Sam and I went to lunch to discuss a new direction his business was potentially taking. I brought up the idea of writing this book on business integrity and he seemed all for it.

Around the same time, I set Sam up with an associate of mine in Australia. They chatted and Sam got back to me after their chat, quite excited, that my Australian associate was interested in being a distributor of Sam’s services for the entire Pacific Rim. Fantastic, I thought!

Then Sam sent me an e-mail stating that he felt our agreement might be too large for this deal, so he wanted to discuss restructuring this. What? He would have never met this guy had it not been through my efforts and connections. Wonder why I wanted to have a deal in writing?

Sam and I went up and back a bit. I discussed the situation with my primary mentor, a fantastic businessman, and my father, Peter. Big Pete tried to calm me down and reminded me that I did not want to lose a friendship over this, even though he did agree that I had a right to be frustrated.

I went back to Sam and he definitely caught on to the fact that he was rubbing me the wrong way. He said he would honor our agreement. If only it ended there.

The next stage was that while he acknowledged that our agreement was for the life of the client, he believed that could damage the possibility of his selling his business. Once again, I called Big Pete for help. I received a quick reply, “tell him that he can buy you out of your agreement with his profits if it is a sticking point in selling his business.” I relayed this thought as my own and Sam said he accepted it.

A week later, Sam was to have a meeting with potential investors and I advised him to fully disclose all commission agreements he had in place, including mine. I did ask that we formally put it in writing so that there was no question as to its legitimacy from the potential investors; while I wanted to trust Sam, I didn’t know the investors. I never received much of a reply from Sam and the day of his meeting came and went without my having a formal agreement in place with Sam.

The lesson I learned is that it is important to always put an agreement in writing. I believe even more so if it is a friend. No one wants to lose a friendship over miscommunication. Lay out the agreement in advance so there are no debates after the fact.

More On (or Moron) Phone Use

Have you ever called someone and they answer their phone, listen for a second and then say they cannot talk right then because they are in the middle of a meeting? I sure have and I find it incredibly rude. I think it is rude for a multitude of reasons. Firstly, it says to the caller that the person answering the phone is awaiting a call, but that you (the one calling) are not important enough to interrupt the meeting; now go away. Secondly, it tells the others in the meeting that there is someone more important calling, or the phone would not have been answered, and that they should just sit and wait while the call is taken.

I find the whole business completely inconsiderate. When you are in a meeting, don’t answer your phone. Also, remember to turn off your cell phone. There are not many people that I can think of that need to take calls while they are in meetings. The meeting is a designated time to meet with someone else. Show that person the courtesy and respect that they deserve and simply pay attention to them and no one else while in the meeting.

Phone Use

More and more, people are using e-mail as a form of communication as opposed to simply picking up the phone. I know that I am guilty of it. I was recently at a convention for an organization I belong to where the president of the organization made the comment that when we have direct questions we should just dial and call as opposed to sending a lengthy e-mail.

I felt inspired by this and the following week, I called the president of the organization to directly ask him a question. He was unavailable and I left a message with his assistant. Four days later, I had not heard from him, so I called again. Again, I left a message with his assistant, but this time pointed out that I had called per his request as opposed to e-mailing him my simple question. Later that day he returned my call apologetically and acknowledged that he had simply forgotten to call me back.

I know that I expect a lot from people, but I do not find it unreasonable to expect a return call within forty-eight hours. It may simply be a message acknowledging receipt of my call and that they will get back with an answer as soon as possible. All I need to know is that you got my message and that you will work on my issue.