“You don’t get what you want, you get what you negotiate.”
— Harvey Mackey

Last time around we spoke about leases and how important they are to your success.  There are so many fixed costs associated with doing business. Most of the time people will tell you that you cannot do anything about any of your costs except the controllable ones, mainly food cost and labor cost. That may be true at a certain point and definitely true month to month. However, what about at the beginning of your contracts? That is when it gives you a chance to negotiate your fixed costs.

There are so many of your monthly bills that most operators treat as a cost of doing business, but in actuality you can have some say over them. Think about all of your monthly costs for services you will incur. To give you an example of what I am referring to, this list is not to be limited to: cable provider, pest services, dumpster services, internet services, laundry services, monthly POS contracts (and the list goes on and on). It is extremely important to take the time when all of this is being set up to go through every contract and negotiate your terms.

The ongoing monthly fees and rates associated with the contracts is the starting point for the negotiations.  There is always room to take some of that away and try and get the best price possible. If you are dealing with a company that won’t budge on price, bringing in a competitor to have them quote you is a strong lever you should not be afraid to pull. Even if you know you want to go with company A, having a quote from company B will start to give you some leverage on negotiations.  Once you have worked out your rates, then you can start to look at other factors in the contract.  Are there delivery fees, set up fees, or any other fee that looks like it is just their way of adding on to your costs? All of those can also be negotiated.

I also like to look at the length of the contract. Many companies love to just stick a 3- or 5-year term on something. About the only time in history it was a good thing to have a locked-in price was the last five years with the after-Covid market we are living in. Even with that said I always try to start at a smaller term, preferably two years. The easiest way I have been able to negotiate is simply at the end when everything else is negotiated. I strike a line through their time length and write my own and then ask them to initial it. Sounds brash but it works.

It may sound like a lot of work to negotiate every single thing you do, but my rule of thumb is if I am paying for something then it can be negotiated — and I treat it as such. When the cash flow of the month to month starts to crunch, knowing that you already have the best pricing and terms should give you some peace of mind. Speaking of peace … in the next issue we will dive into a topic that needs to be discussed more — the well being and self care of YOU!

Nick Bogacz is the founder and president of Caliente Pizza & Draft House in Pittsburgh.  Instagram: @caliente_pizza