We all enter into agreements on a daily basis.
For example, when you install an app on your mobile device or install new software on your computer, it always comes with a set of Terms and Conditions that you need to agree to before using the software. And if we’re being perfectly, nobody pays any attention to what those contracts say.
That cavalier attitude, however, is best abandoned as a business owner or in any professional capacity. Not only should you be highly interested in what every contract has to say, you should also know which points are set in stone and which are up for debate.
This article presents two common types of contracts which most us are likely to be faced with, probably more than once, and what you want to look for and try to negotiate on.
Employment Contracts
Keep in mind that salary typically accounts for only about 70% of an employee’s total compensation while the other 30% is made up of various benefits. These benefits often change from company to company and from position to position. In addition to that, some are fixed, while others are negotiable. In the following paragraphs, typical benefits are outlined, along with a short explanation of why you should take them into account.
Benefits
Many possible arrangements fall under the umbrella of benefits and, depending on the company, they may be quite tempting or virtually non-existent.
One of the key benefits that you really ought to look into is insurance – when it kicks in, who it applies to and what it covers. In a way related to this issue are wellness programs and gym membership, if they exist. It is a growing trend which companies are recognizing as wise – investing in your employee’s health and well-being, as it directly reflects on their satisfaction and performance. Last, but certainly not least is professional development. The skills you attain are invaluable to both yourself and your employer, so look for one who fosters it.
401(k)
Since many companies have done away with pension plans, the modern way of saving for your golden years has become a 401(k). Depending on the company and the position you have, this benefit may or may not be included.
If it is, it is not really negotiable. These contracts depends on economic and legal issues a lot more complex than just the good will of the employer. However, if you are looking to make a career change and both position offer these plans, it is a good idea to compare them and project a few decades ahead. Small differences in clauses and percentages have an impact on your future prospects and accrue massively over the years.
Leases
There are two major options concerning leases – either you are looking for a space to lease for you business or somebody is making an offer to you. Both of these share some common areas to look out for and these are presented below.
Leasing for your business
The first thing to do is investigate. Investigate the neighborhood, other business, their rents, their traffic, the people walking around. Does the deal you are in the process of negotiating seem fair and sustainable for you? Are the local businesses complementary to yours? What is their revenue? What about competitors – how many are close by and are they a threat to you? Does it seem that the locals are your type of customer? How do future prospects for the neighborhood look?
All these questions will make it easier to decide whether you want to proceed or you want to renegotiate some points. Just like in employment contract negotiations, it is not always the amount of rent that should be the deciding factor. There are not as overt expenses that can make a great deal of difference in the long run.
Negotiate caps on increases in rent and on costs you are expected to cover. If there is no cap or fixed rate on these, the expenses can become overwhelming for you. Lease contracts tend to be long and complicated, but knowing about these clauses helps you focus on what truly has an impact on your business.
Moreover, inform yourself about who else is leasing nearby. Whether this is a competitor or somebody driving business for you. It is possible to add clauses that prohibit the owner to lease to competitor of your business or to release you from the contract in case of adverse changes, such as a business lead relocating.
Fielding offers from companies
It is not uncommon for companies to express interest in the land you own. This may come as a surprise if you live in a faraway, rural area or if there aren’t factories or other business in the immediate vicinity. However, these things may actually be a draw for some of these companies.
For example, a common occurrence which is likely to continue in the future and even intensify, is mobile companies offering to build cell towers on people’s lands.
There are things you can do, which is look into similar deals being made in your proximity or the overall rate at which others rent out their properties. This usually won’t be enough to give you a complete picture of what is and isn’t a good deal in your particular case since there are many parameters that go into forming an offer which only those in the industry are privy to.
When negotiating a cell tower lease buyout, it is best to bring in an independent expert, someone who has experience in negotiating such deals and who will not be inclined to work in the interest of the company. Companies looking to buyout the land will present the future outlook in such a way that it seems best to take their deal, while experts will recognize these tactics for what they are and implement a strategy that can get you a deal that often over 300% better,
Final Words
Although we have grown very much accustomed to enter into contracts and some of them may seem quite inscrutable and inflexible, educating yourself on what can and can’t be negotiated is very important. You never know when an opportunity may appear and what slight alteration can give you a huge leg up or be a hindrance down the line, especially when it comes to the type of contracts that most people are likely to enter into over their professional career.