Negotiation Fox Will Speak at QuickBooks Connect Conference

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NancyFox_cielorothphoto_8_edited I’m excited to be speaking at the QuickBooks Connect Conference in San Jose, CA on October 24-26 alongside Michael Phelps, Malcolm Gladwell, Shaq, Simone Biles and many other leaders in their fields. More than 4,000 people will convene at the conference to learn how to start, grow, run and build their businesses.  If you’re using QuickBooks to manage your finances or have been wanting to get started doing so, I highly recommend attendance at this great event.  For more information, just click here.

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Negotiation Fox to Present Webinar on April 3, 2013

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On Wednesday, April 3, 2013 from 6:00 – 7:00 pm, Negotiation Fox will present a one-hour online webinar, “The Art of Making Better Deals.”  The webinar is sponsored by Artist Trust in Seattle and is open to anyone who would like to participate.  Thanks to support for Artist Trust, they are able to offer this presentation at a very affordable price.  I hope you’ll tune in!  To register, CLICK HERE

Art & Politics

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This recent article from the New York Times questions whether art museums should be more involved in current political issues.  Do museums have a moral obligation to address the political climate as part of their educational mission, or is it better for them to eschew this controversial arena to avoid offending their supporters?

http://www.nytimes.com/2012/11/04/arts/design/american-museums-tend-to-tiptoe-around-politics.html?_r=0

I welcome your comments on this!

Negotiation Fox to Speak at Nevada County Arts Conference on November 17

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The Nevada County Arts Council kicks off its first annual Arts Convergence conference in Grass Valley, CA, on Saturday, November 17, with Nancy J. Fox, a/k/a Negotiation Fox,  a negotiation training and consulting firm, among its esteemed speakers.

According to Brian Buckley, Executive Director of the Nevada County Arts Council, “Arts Convergence 2012 is an amazing collection of presentations designed to inform and inspire artists and arts organizations.”  The day-long conference at Sierra College features 15 workshops and two general sessions that will “lift the spirits, skills and expertise of artists of all genre and experience levels.”

The theme for the conference is ABC:  Arts Build Communities.  Participants will be able to choose from sessions of general interest and sessions specifically geared towards literary, performing, and visual artists. Some workshops will enhance specific artistic skills, and a number are geared toward helping arts organizations.

Negotiation Fox’s Artful Negotiating:  How to Value your Work and Talk with Clients, Vendors, and Suppliers, is included among the general interest sessions.  When asked about her participation at the conference, Fox said, “This conference is truly groundbreaking in its scope, and I am honored to be a part of it.”

Thanks to a grant from the California Arts Council’s State-Local Partner Program, artists can attend Arts Convergence 2012 for only $45 ($30 for NCArts members!)  For further information or to register, please go to:NCArts’ website at: nevadacountyarts.org.  You can also email to: workshops@nevadacountyarts.org.

Nevada County Arts is a member-supported, all-volunteer organization that acts as advocate and liaison to city, county and state government, chambers of commerce and other regional organizations. The mission of NCArts is to facilitate collaborative efforts that promote and sustain the visual, literary and performing arts of Nevada County in order to advance the cultural, social and economic life of our community. To become a member, or for more information please go to nevadacountyarts.org.

How to Gain Confidence in Negotiation Situations

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Our level of confidence can play a big role in the outcome of a negotiation.  If we feel confident and strong, then we will be able to advocate more convincingly for what we want. Yet, all too often we go into a negotiation fraught with jitters and self-doubt.

One way to overcome our nervousness is to imagine that we are advocating on behalf of others, rather than ourselves.  Research shows that the confidence level of most people rises significantly when they negotiate for something that benefits others, such as a co-worker or family member.  So rather than think of the situation as a negotiation, train yourself to view it as an opportunity to advocate on someone else’s behalf.  This change of mindset will allow you to leave the jitters behind and focus on the mutual benefits of coming to agreement with the other party.

Go forth with confidence and negotiate!

Tips for Successful Bartering

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Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.  Whether in your artistic career or in your personal life, bartering is a form of negotiation that can help you:

  • Preserve cash – no or low out-of-pocket to get what you want
  • Improve cash flow – allows you to preserve capital
  • Weather periods of seasonality – survive slow business cycles
  • Turn excess inventory into cash – if you have built up a large inventory of artwork, then bartering is a means to move some of it in return for things that you need

Here are a few things to be mindful of in barter situations.

1.        Establish a time and/or money equivalent

In a barter situation, the two parties are not trading apples for apples.  Therefore, in order for a win-win situation to exist, both parties need to find measurable, quantitative standards for exchange.

  • If bartering for services, the standard could be a reasonable hourly rate for the parties’ respective services multiplied by the amount of time each of them will have to spend.
  • Hard costs (cost price) could be another standard.   Let’s say that you need a new refrigerator and the owner of the appliance store is willing to trade for one of your artworks.  A comparison could be made between the appliance dealer’s cost to replace the refrigerator on his showroom floor and your cost to replace the artwork.  In your case, that price would include materials plus your time to re-create it, and perhaps a gallery commission if you’re bound to pay it.
  • Related to the point above, consider the distribution level at which each party is bartering.  Some industries have multiple distribution/pricing levels, e.g., retail, wholesale, distributor, manufacturer, in descending price order.  As an artist, you have one or possibly two, e.g., retail and gallery (wholesale).

2.       Know the lowest price for which you can buy the barter item  with money elsewhere

This may not impact your decision about whether to barter, but it will keep you from getting the wool pulled over your eyes if the other party starts to cite a unrealistic “retail price” as a standard of measurement

3.       Know your own hard costs, but don’t be enslaved by them 

If you are in a cash flow bind, or if your studio’s back room is stuffed with older works that you need to move out, you may be better off bartering below your hard cost – which is already a sunk cost – to get the things you need.

4.       Don’t let others convince you to barter for things that you don’t want or need

If your best friend tries to convince you to barter an artwork for awnings for your house, because s/he owns an awning company, then that’s only a good deal if you really want or need the awnings.  If you don’t, then don’t barter.  Instead, negotiate with your friend over the price of the artwork and make an art sale! 

When I worked in the corporate sector, I built up a huge number of frequent flyer miles from all the travel I was required to do.  Those miles were of little value to me, because the only place I wanted to go was home.  While a contractor was doing some work in my house, he mentioned that he and his wife were planning a trip to Spain.  The cost of the skylight he was putting in became a barter transaction for two airline tickets!  That was a real win-win.

Real-Life Negotiations: Lessons for Artists

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Has my October 2nd post about the possible merger between T-Mobile and Metro PCS left you wondering what this has to do with artists?  Let me explain.

1.  Artworks are often sold at auction, a situation that involves competing bids.  We see from the research that if two or more people are bidding on something, the final price might well exceed the estimated top price.  Case in point:  the recent sale of Edvard Munch‘s “The Scream“, which – at approx. $120 million – set a record for the highest work sold at auction.  If you have two or more parties interested in your work, play it to your advantage.

2. Artists may want to try re-structuring some of their works from “for-sale” items to auction items.  Consider trying it at an art fair or gallery opening.  The internet offers numerous possibilities for that, as well.

3. Beware of this human tendency when you are the buyer in a competitive bid situation.  Before you start bidding, be sure you have a top price in mind, and don’t let your emotions cause you to exceed that price when the bidding begins.

Let the Buyer – and Artist – Beware

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This is a great article from the Huffington Post that points out some terms that should be negotiated with someone who wants to represent your work.  How do you, as an artist, feel about this?

http://www.huffingtonpost.com/daniel-grant/do-art-gallery-practices_b_1922981.html?goback=%2Egde_4249192_member_172005180

Real-Life Negotiations: T-Mobile’s Bid for MetroPCS

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Real-Life Negotiations:  T-Mobile’s Bid for MetroPCS

In Negotiating Rationally, Professors Max H. Bazerman and Margaret A. Neale maintain that in competitive bidding situations, often the buyer falls prey to the “Winner’s Curse.”  In practical terms, this means that the winning bidder often ends up paying more than necessary – frequently more than the actual value – for the thing that s/he acquires.

Why would someone voluntarily pay more for something than it’s worth, you ask?  Some common reasons follow:

  1. Bidders often don’t have enough information; therefore, they may overestimate the present value of what they’re bidding for.
  2. Acquirers frequently don’t consider that the other bidders may not have any more information than they do.
  3. Bidders may think the synergy created between something they already own and what they’re buying will make the acquisition worth the inflated amount they paid for it
  4. Fear of competitive offers often leads bidders to be content with less information than is truly needed for a thorough analysis.

Let’s examine these reasons within the context of a real-life negotiation situation:

Last week, T-Mobile announced its intent to purchase Metro PCS for the equivalent of $11.28 per share.  Two days later, Sprint said that it may consider trumping T-Mobile’s offer.  According to Pacific Crest analyst Michael Bowen, Sprint’s bid might value Metro PCS’ shares at something between $12.50 – $15.00 per share.

In February, Sprint considered buying MetroPCS at a price that, according to analysts, would have generated savings of $8 billion to $9 billion for the combined entity.  This is much greater than the synergies expected from the deal between T-Mobile USA and Metro PCS, which are estimated to generate savings of $6 billion to $7 billion on a net present value basis.  Ultimately, Sprint opted out of the deal in February, choosing instead to invest in its own network.  But on the news of T-Mobile’s offer, they’re considering jumping back into the game.

It’s doubtful that either T-Mobile or Sprint has more information than the other regarding the true value of MetroPCS.  What reason would MetroPCS have for giving more information to one than the other? It’s clearly in their best interest to let the bidding go higher.  Is Sprint stepping in because it assumes that T-Mobile knows more than it does about the value of MetroPCS?  If Sprint does make an offer, will T-Mobile fall prey to a similar, possibly erroneous, assumption and make an even higher offer?

What about the estimated savings generated from the synergistic value of the combined companies?  In studies of past M&A’s, there’s no evidence to support that the excessive price paid was equal to the synergistic value.  According to an article published in the Wall Street Journal in September 1981, approximately 1/3 of acquisitions prove to be failures;  another third fail to live up to their expectations.

Often, bidders’ willingness to accept less information than they would have liked, stems from their fear of competitive offers.  Is Sprint’s last-minute bid simply a case of “I didn’t want it before, but if you want it, then I want it, too, because I don’t want you to have it?”

Potential acquirers would be well served by guarding against over-confidence in their own judgment. Bazerman and Neale maintain that, “Potential acquirers should temper their optimism by recognizing that the winning bidder is likely to pay a far greater price than the target is actually worth.”

It will be interesting to watch the outcome of the bidding between T-Mobile and Sprint in the coming days, and, in the coming months, to see how much value was actually created for the winning suitor.   Will the final outcome be a match made in heaven, or another classic case of the Winner’s Curse?

Copyright Nancy J. Fox, October 2012 – All Rights Reserved