30 days to Becoming an Entrepreneur: Doing a daily deal – negotiation and preparation

Everything is negotiable. When we did our first daily deal we were desperate for new business and just took what they offered and did the deal they wanted. It wasn’t in our best interest – but we really wanted the deal. I wish I knew then, what I knew now.When negotiating with a deal site, there are three primary things you can negotiate on:

  • Deal specifics: It’s up to you what your deal is. Don’t agree to do a deal on something you may lose money on. At The Woof Room, we book out of our hotel suites for dogs every weekend the entire summer – and every holiday. Because of this, we will not do deals on boarding. We learned this lesson the hard way with our very first deal (which included boarding). You can also say it’s only for new customers and place limits (i.e. one per customer or cannot be used on Friday nights).
  • Percentage you keep: They will negotiate with you on what percentage you keep. They might not come up as high as you want, but as long as they come up – event a few percentage points – it’s more money in your pocket. It doesn’t hurt to ask and it’s just money you’re losing if you don’t.
  • Expiration date: They will tell you 6 months (or 1 year) is standard – but that doesn’t mean anything. You can choose whatever expiration date you want – within reason. So,  if Christmas is your busiest time then make sure your deal expires in November so you don’t get normal customers for Christmas at discounted rates.

Once you have hammered out the details and you feel comfortable with your deal you will need to prepare. You will get A LOT of inquiries the few days your deal is for sale. How many? It varies greatly. A good way to estimate is take the normal amount of phone calls, emails, and visits you get in a day and multiply that by 10 – 15. That will give you a good idea of what to expect in terms of increased traffic. You’ll also have a lot of work after the deal handling the new clients. Three tips to make this process smooth are:

  1. Make sure you (or a very experienced staff person) is the “voice” for your business during the sale period. The last thing you want is someone coming in months after the deal telling you an employee told them something was ok when it’s not. When we do deals we put together a fact sheet about them and focus on the rules and restrictions so that everyone is aware of them.
  2. Be proactive. You can see the list of people buying your deals as they buy them (while the deal is still live). If you notice the same person buy 7 deals or a current customer buy deals for new customers, deal with it right away! Contact the customer to let them know they aren’t eligible – or contact the deal site to refund the deal. Take care of it right away, but months down the road it won’t be very easy.
  3. Collect sales tax! The deal sites do NOT collect sales tax and explicitly state on the deal that they do not include sales tax. You are going to have to pay sales tax and you definitely don’t want to have that come out of the already small amount you are getting from the deal so make sure you and your staff collect sales tax from every customer bringing in a deal.

Next, 30 days to Becoming an Entrepreneur: Tips for hiring your first employees

Photo Credit: Seth Anderson

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