Don't Forget The Goal
For two years my business partner and I had been working on selling an excellent commercial corner we had developed. This corner property of nearly 3/4 acre fronts two very busy streets. It is an excellent location. We were working with a restaurant owner. The owner had an existing restaurant on the other side of the city and wanted to open a second location on this side of town.
In designing a restaurant there are many elements. This restaurant was also to have a drive through window. The process goes like this: First, you put in an application with the City to see what they would require such as design, ingress, egress, parking, landscaping, entrances, exits, fire code compliance etc., Second, you retain an architect to design the building and provide the actual working drawings. Third, you select a bank who will do the financing for the project.
The bank wants to know how much the restaurant will cost including land. This cannot be determined until the plans have been drawn and approved and put out to bid to all the subcontractors. In this case the plans were changed several times by the restaurant owner to make the final building as efficient and attractive as possible. This takes time. Also, the financing was to go through the Small Business Administration, more time. An appraisal, more time. All this took time, lots of time ... almost two years!
The buyer was really getting frustrated at how long this process was taking. As we neared the final approvals he said: "If this deal doesn't get done this month I'm not doing it". It took longer. When the bank called him and said we have approval he said: "I'm not going to buy the property and build the restaurant". When my partner and I found out we said to ourselves: "After all this he's not going through with the deal".
What happened? The buyer in his frustration let a non relevant point distract him. He forgot what his original goal was: to open a new restaurant!
My partner and I told the bank: "Don't cancel this package. We believe we can put it back together." We called the buyer and explained we understood his frustration. We pointed out to him that if he would go ahead he would relize his original goal. After thinking it through he deceided we were right and he went ahead with the deal.
Many times in our frustration we're looking for a place to vent it. Don't choose to vent your frustration at the cost of sacraficing your goal!
A final footnote. Before the restrauant started construction the City raised the required traffic impact fees. Since the application was already in and the plans submitted the new fees would not be charged. The fees went up over $250,000! What a savings to the restaurant owner. Keep your eye on the goal.
A Second Illustration
Years ago I lived in Hawaii on the island of Kawaii. I was a licensed real estate salesman. In an attempt to get new listings I would visit for sale by owner open houses. I visited one such house and talked to the lady who together with her husband owned the house. I told them they had a very nice house. Before leaving I asked if she would consider listing the home with me and allowing me to market the home for her. She got a little indignent and said: "You'll charge 6% comission and I won't pay that". I said I thought we could add the 6% comission to the price she was asking. She didn't see how we could sell the home for more than she was asking and said no.
I visited her open house nearly every week. After about six weeks I noticed a lot of the furniture was gone and asked where it went. She said her husband had gone back to the mainland and she was staying until the house sold. I again asked if she would consider letting me market the house. Now she had softened some and said: If I don't sell it in three weeks I'll list it with you. Three weeks went by and she still had not sold the house. She then listed the home with me and I priced it adding the 6% sales comission to the price she wanted.
When lsiting the home she said the dining room light was not to be included in the sale as it was an anniversary gift. I said I understood.
I advertised the home and held open houses. I had a call from a man who was looking to own a home in Hawaii as a rental. I told him about this home and he wanted to see it. I showed it to him and he said I'll take it. I said the dining room light is not included. He said that was fine as long as she put some kind of light in to replace it.
In presenting the offer over the phone I told the seller about the dining room light. The lady said: "I won't replace it. I said it wasn't included and he will need to buy his own light." I told her I would buy the light from my commission. She said she would not allow it. It was the principle that counted. (I didn't understand what principle she was talking about, but didn't ask) I told the buyer about the counter offer saying he had to buy his own dining room light. He said: "This is crazy. I want to rewrite my offer." His rewritten new offer was for the same price with him buying the dining room light, but now instead of all cash he was requiruing the seller to carry a $20,000.00 second note for 20 years at a low rate of interest! I presented the new offer to the seller. She accepted it and said: "It's ok because he is buying the dining room light."
She had forgot the goal: To sell the house and get the money.
In designing a restaurant there are many elements. This restaurant was also to have a drive through window. The process goes like this: First, you put in an application with the City to see what they would require such as design, ingress, egress, parking, landscaping, entrances, exits, fire code compliance etc., Second, you retain an architect to design the building and provide the actual working drawings. Third, you select a bank who will do the financing for the project.
The bank wants to know how much the restaurant will cost including land. This cannot be determined until the plans have been drawn and approved and put out to bid to all the subcontractors. In this case the plans were changed several times by the restaurant owner to make the final building as efficient and attractive as possible. This takes time. Also, the financing was to go through the Small Business Administration, more time. An appraisal, more time. All this took time, lots of time ... almost two years!
The buyer was really getting frustrated at how long this process was taking. As we neared the final approvals he said: "If this deal doesn't get done this month I'm not doing it". It took longer. When the bank called him and said we have approval he said: "I'm not going to buy the property and build the restaurant". When my partner and I found out we said to ourselves: "After all this he's not going through with the deal".
What happened? The buyer in his frustration let a non relevant point distract him. He forgot what his original goal was: to open a new restaurant!
My partner and I told the bank: "Don't cancel this package. We believe we can put it back together." We called the buyer and explained we understood his frustration. We pointed out to him that if he would go ahead he would relize his original goal. After thinking it through he deceided we were right and he went ahead with the deal.
Many times in our frustration we're looking for a place to vent it. Don't choose to vent your frustration at the cost of sacraficing your goal!
A final footnote. Before the restrauant started construction the City raised the required traffic impact fees. Since the application was already in and the plans submitted the new fees would not be charged. The fees went up over $250,000! What a savings to the restaurant owner. Keep your eye on the goal.
A Second Illustration
Years ago I lived in Hawaii on the island of Kawaii. I was a licensed real estate salesman. In an attempt to get new listings I would visit for sale by owner open houses. I visited one such house and talked to the lady who together with her husband owned the house. I told them they had a very nice house. Before leaving I asked if she would consider listing the home with me and allowing me to market the home for her. She got a little indignent and said: "You'll charge 6% comission and I won't pay that". I said I thought we could add the 6% comission to the price she was asking. She didn't see how we could sell the home for more than she was asking and said no.
I visited her open house nearly every week. After about six weeks I noticed a lot of the furniture was gone and asked where it went. She said her husband had gone back to the mainland and she was staying until the house sold. I again asked if she would consider letting me market the house. Now she had softened some and said: If I don't sell it in three weeks I'll list it with you. Three weeks went by and she still had not sold the house. She then listed the home with me and I priced it adding the 6% sales comission to the price she wanted.
When lsiting the home she said the dining room light was not to be included in the sale as it was an anniversary gift. I said I understood.
I advertised the home and held open houses. I had a call from a man who was looking to own a home in Hawaii as a rental. I told him about this home and he wanted to see it. I showed it to him and he said I'll take it. I said the dining room light is not included. He said that was fine as long as she put some kind of light in to replace it.
In presenting the offer over the phone I told the seller about the dining room light. The lady said: "I won't replace it. I said it wasn't included and he will need to buy his own light." I told her I would buy the light from my commission. She said she would not allow it. It was the principle that counted. (I didn't understand what principle she was talking about, but didn't ask) I told the buyer about the counter offer saying he had to buy his own dining room light. He said: "This is crazy. I want to rewrite my offer." His rewritten new offer was for the same price with him buying the dining room light, but now instead of all cash he was requiruing the seller to carry a $20,000.00 second note for 20 years at a low rate of interest! I presented the new offer to the seller. She accepted it and said: "It's ok because he is buying the dining room light."
She had forgot the goal: To sell the house and get the money.
posted by Paul Edgren at 2:55 PM
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