The Five Rules of Negotiation Every Entrepreneur Should Know

The Five Rules of Negotiation Every Entrepreneur Should Know

Check out the latest episode below. Mr.Biz Radio provides business owners with the knowledge and insights needed to drive their companies forward.

Mr. Biz Radio: The Five Rules of Negotiation Every Entrepreneur Should Know

Unedited transcription of the show is included below:


Welcome to Mr. Biz radio, Biz. Talk for Biz owners. If you're ready to stop faking the funk and take your business onward and upward, this show is for you. And now here's Mr. Biz, Ken Wentworth.


Hey there, everyone, it is. Welcome back to another episode of Mr. Biz Radio, with me, Mr. Biz Ken Wentworth. And today we're gonna talk about a few different things, but one of the primary things we're gonna really dig into, especially in the third segment, is talking about kind of the art of negotiation. Some different aspects that we all need to know, right? And, and here's the thing. It's something that hits each and every one of us because whether you realize it or not, life is a constant negotiation. When you're trying to get your five year old to eat green beans, you're negotiating, right? Think about it, <laugh>. So it's critically important to know sort of some of the key aspects on being able to be effective in doing that. And our guest this week is Dawn Rasmussen. She is a C F A and Certified Fraud Examiner, and the author of the book, "12 for 12". She inspires, empowers and strengthens organizations with relevant, formidable fraud training that wows over the course of her illustrious career. She has come to realize that ordinary people like herself can use the skills of the fraudster to get what they want in life. Dawn, welcome to Mr. Biz Radio.


Thank you so much, Ken. I'm happy to be here this morning. So,


Yeah, so I got, I gotta tell everyone. So Dawn we had it's only happened once, but we literally, Dawn was supposed to be on the show several months ago, and we literally, again, knock on wood, hasn't happened only one time, but we literally had no power in the studio. So I had to like, at the last minute get ahold of Dawn, and I'm like, I, I can't even join. Like we <laugh>. We had all these problems. So it's been a long time coming. I, I think I look back, Dawn, I think it was literally like last September mm-hmm. <Affirmative> when we originally talked about having you on a show. And here we are, you know, fast forward. Sure. All these months later. So I'm looking forward to having you, before we get into all the negotiation and fraud and things like that, if you would tell us a little bit about your entrepreneurial journey.


Okay. I would love to. So, you know, I've always been a little bit of a natural investigator. And but after I finished my first degree from school, I, I got a job as a clerk. And that was the beginning of my true career as a fraud examiner, because all the jobs I've had between now and then, whether I was a clerk or a corporate controller, or the vice president of acquisitions or working for myself or working for a CPA firm, I I always found fraud wherever I went. But the true entrepreneurial spirit in me happened when I also did some tax on it back in the day. And and one time I was on, on a job and, and I realized, oh, I recognized the trends of fraud in this other company. And, and that is where kind of a, a change occurred where I was like, I need to alert these people.


They have a lapping scheme, and, but it's not part of my audit. It's totally unrelated. So I, and, and when you, when you have to alert somebody about fraud, you can't, you can't write a letter to a mid-level manager because they might be very, well be the one perpetuating those frauds. And so I have to write it to the guy at the top. And so I wrote a, a letter to the C E O and informed him, well it's very likely that you have a lapping scheme in your accounts receivable department. You know, f y i, <laugh>, I can't tell you how I know this. Just, just investigate, you know. And and that was kind of the beginning for me because people started to know my name and they would pass it around. Like, I don't have a business card. People just know who I am and if they need my help, they call me.


And this CEO took my letter to a conference and kind of made fun of it. <Laugh> like used it for fodder, but one of the other people that was in the audience was like, Hmm, maybe I need to get that person's contact information. And he turned out to be an important client to me. So you just never know where, where things are gonna happen once you start just doing what you just can't seem to stop doing. So I've written several letter letters like that, and that's kind of the, the beginning of my, my entrepreneurial process I guess you would call it, other than getting my fraud examiner's license. I've been a fraud examiner officially for 13 years now. But the one thing that I mostly do anymore, I don't really take new cases anymore. I mostly do fraud trainings.


And those trainings can be a lot of fun because my time is, I really prepare. So I go in, I know, I know what's going on, I know what their problems are, I've read their audit and I usually do something to shock them into seeing how their problems truly affect them. Cuz a lot of times if you get in there, like one department, like your IT guys, they always have an attitude. So you have to, you have to hack their system or do something major to like make them go, oh, okay, we are at, we are at risk. So yeah, it's a lot of fun.


Yeah. Interesting. So I, I gotta ask, so if you're dealing with even a mid-size company, oftentimes, let alone a smaller company, you know, oftentimes there's a lot of family members that are working in there. Have you ever had a situation where, you know, maybe the CEO or the, the owner and it was a family member that was, was perpetuating fraud?


Absolutely. what I think one of the sections that we're gonna talk about are pink colored crimes. Yeah. And definitely family members can fall into that, but family members are kind of an extra special level of, of, of crime because they're more reckless and they feel like they're in, there's a sense of entitlement to them that doesn't fall on the fraud triangle anywhere. So a lot of, if it's a family member, they can say, well, I'm a family member, or like, this is our business. Like it's okay for me to just take this thing or use this equipment for something that we're not, you know, or whatever it is that they're fraud, they're trying to perpetuate be, and a lot of times those go unrecorded or unregistered or unmeasured in any way because who wants to prosecute their own family member?


You know? So, so yeah, it can be a huge problem to, to get involved with those sticky situations. One of my, one of my specialties is the reasons that people call me is because I'm known for settling things quietly. Like, I don't wanna go to court. We don't want a big er mess. Like, it's your business. And if you're a startup and you're getting to getting going and you're trying to gain a reputation with your, you know, me, whoever you serve in the community, like the last thing you want is the police shouting about fraud and this company, oh, no one's going to come to you cuz they see that word with your company name. They don't even know what's real or what's, you know, happening. And they just assume, oh, they're not a good company now. So it can be a huge, a huge problem when family members get entangled in, in ripping you off. I, I like one of the biggest things, even as like a tax person, if someone came to me and they're like, oh, we have this partnership, I'm like, yeah, I'm not gonna work with you because next year you'll be torn apart. Partnerships are, they're not a great way to go. And you're working with family members


<Laugh>, so, right. Yeah, no, I've had the, I've had the same type situations, not on a fraud basis, but I had kind of a unique family situation where I had a client that was down in Charlotte, North Carolina, and I went down there to visit them. I was down there for several days and the owner said, I want you to spend the next 24 hours with my daughter . And then, so I, I had never met her before, so I'm, I'm talking with her and, you know, we're going through different things in the business and all that. And the next day the owner and his wife brought me into their office and they're like do you think that she can take over the business


<Laugh>? Oh, wow.


And she was not ready. She was, you know, she, she was not ready to take over the business. And so, you know, fortunately I knew him pretty well, so I said, well, you know, I'm a truth teller, you know that. Mm-Hmm. So if it's my business, no, she's not ready yet. However, here's the things I think she can work on to get ready and things like that. So I kind of, I think, framed it decently. And he did, he didn't fire me. So I think, I think it turned out pretty well. Guys, this week we're talking with Dawn Rasmussen. We're gonna hit a break here. We're gonna come back after the break. We're gonna talk about pink collar crime that she mentioned. Follow her on LinkedIn and check out her book 12 for 12 on Amazon.


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All right, welcome back to the show. It is time for Mr. Biz tip of the week. This one is simple and short and actually a little bit controversial. Every time I talk about this, it seems like I get some people that get a little up in arms about it, and it is around cash flow. And I'm a big proponent of using business credit cards for cash flow. Now, that's part of the tip is if you can pay the balance each month, definitely use business credit cards. I don't mean to go out and rack up, you know, $50,000 on your business credit card and just pay the minimum payment. That's absolutely not what I'm talking about whatsoever. But it's a way to extend that payable receivable cycle as far as paying for goods. And then you've got, you know, depending on when your pay cycle is, your credit card, you get four to six weeks before you have to lay out the cash for it so you can utilize those raw materials or whatever it might be during that time.


And the side benefit to all that, of course, is if you've got, you definitely make sure you have a card that has a lot of benefits for it. So, you know, I u I've used this example several times on the show over the years, but I had a client years ago that had a small construction business and y you know, he ended up racking up. He got a card that gave him 2% cash back. And the funny note to the story was he and his wife used the money to go to Hawaii. And he sent me a picture from the beach with a beer in his hand and his toes in his sand, and said, thanks to a lot Mr. Biz. And I said, you know, I, and then he came back, I said, I didn't get one of those shirts that say, you know, my client went to Hawaii and all I got was this lousy shirt.


I said, what the heck? You know but so that's the Mr. Biz tip of the week. If you use them wisely and you're paying off your balance each month so you, you don't incur any interest charges or anything. It's definitely a good way to utilize for cashflow purposes. Alright. Right, Dawn, so let's get back into it. I know we, we've scratched the service sign a little bit, but let's talk a little bit more if you, if we could about pink collar crime. Absolutely. Cause I'll be honest with you, absolutely. I'm, I'm a little embarrassed because when I first was reading and doing show prep, I'm like, pink collar crime. I, I feel like I should know what that is, but I don't know what it is.


<Laugh>. Okay, so we all know what a white collar crime is, you know, like the top executives type of thing. And then a blue collar crime is kind of the guy working on the line. And then pink colored crimes are for that special trusted employee. And you entrepreneurs and you startups out there know who I'm talking about. There is probably somebody in your organization that has far too much power and and they probably are generally a good trusted employee. But as you grow, anyone who has between 10 and 500 employees on average are getting ripped off about a hundred thousand dollars a year. So, like, it's important to pay attention to this. And so for you guys out there, small business guys or beginners I would have some good suggestions for you. The first thing would be to do some training <laugh>, because it will cut your fraudulent behaviors in half.


And and a little bit of training goes a long way. But the other, but the second thing I would do is say, you have to stop and say, what are my resources? You can't separate controls and give, oh, this duty belongs to this employee and that duty belongs to that employee if there just aren't a lot of people in your company. So the other thing that you should do is implement oversight make them accountable for numbers in some small way. A half hour a month's review with your employee who knows you are looking is a big deterrent. It doesn't have to be super fancy controls if you're not to a point where you can, where you really need super fancy controls. Another suggestion that I would give to you is to say, okay, perceived controls are very powerful. Like even five years ago, half of the cameras that you would see in like a, a shop that you might be in half of 'em weren't even real.


But it was the perception of oversight that would deter, you know, shoplifters or whatever. So the same, you can do the same thing in your business practice. You can say, well, we're going to start doing surprise inspections on, on our books. Like, or if they know that there's the possibility of you doing a surprise review of things that, that's a great deterrent for, for your employees. So like how it kind of falls, there's a fraud triangle and there's three parts and you only have control over one part. So like the, the one part you have control over is called opportunity. If you are allowing your employee the opportunity, then you are creating fraudsters when, when pressure hits them financially, when financial pressures come. Cuz it's easy. So the fraud triangle is opportunity, financial pressure, and rationalization. So if someone can say to themselves, grandma really needs that surgery I'll pay it back at a later date, that becomes a bi the beginning of a new pattern for that person.


Yeah. And I'll tell you, Dawn, I I yeah, I was just gonna mention, I'm glad you brought that up because, you know, and I've seen this in with clients before, where you've got someone who's been a loyal employee, maybe not a family member, but a loyal employee mm-hmm. <Affirmative>. Mm-Hmm. And that's face it, when in a relatively small company, those people that are there for a long time, 10, 12, 15 years, 20 years, they become like family, right? You're seeing them every day or five days a week, cetera.


Uhhuh <affirmative>.


Yeah. And, and those people can begin to make decisions that are not normally in their character or their ethics or their moral scope. That's right. If something is happening in their personal life, if they mm-hmm. <Affirmative>, you know, get into drug problems or, or, or, or you know, a gambling problem or they're going through a divorce or who knows, right? And you just never know what that is. And I feel like there's, I mean, I've seen it multiple times in with clients that I've had that where, you know, it's like the owner's like, oh my gosh, I never would've suspected Bob or Susie or whoever that would've done. I I, you know, they've been here forever and geez, I wonder if they've been ripping me off all these years. You know?


Yeah. so if you can follow those basic steps, the first one, training will cut your frauds in half. The next one, oversight will cut it in half again, and perceived controls will also cut it in half. Again, it can really slim down those, those, those slippery bottom line things that are disappearing. And people who are good people, everybody has their breaking point. Everybody has a point where they tip and say oh. And we all have to know what our own is, you know, to be vigilant and, and make sure that we maintain our values in life. But so yeah, just to help your employees out by taking away the element of opportunity that allows them to say, oh, this could be a solution to this problem instead of looking for more, you know, valid and legitimate solutions.


Yeah. Yeah. I mean, look, money creates sometimes irrational, immoral decisions. Mm-Hmm. <Affirmative>, let's face it. And not just, sometimes a lot of times people do things that, again, completely outta character that you would never suspect. So I love your suggestions because again, as you mentioned, I can imagine if someone thinks maybe they're gonna come and look at my books or they're gonna look at what I'm doing, just that, you know, that perceived mm-hmm. <Affirmative>, you know, thing that you're, you're gonna get reviewed, would, I, I would think would have a massive impact. Like you said, at least 50% of of, you know, their thought pattern of, geez, well, they may have even thought that, but, oh man, I might get caught and this would be really embarrassing. I've been here for 10 years, 15 years, whatever it might be. Yes. they gave me the opportunity, you know, and at that point they, they get back into their core, more of their core moral, you know, values, et cetera, I think, and it, it kind of deters 'em away from that. So I, I would think that would be super valuable, like you said, especially for a company that's, you know, on the smaller side that maybe, you know, they don't have you know, someone who's gonna come in and, and do an audit with them or, or working on them that's in an audit team or whatnot,


Right? Smaller companies, they, they can't afford big, fancy audits. It's just, you just have to make due with what you can. That that's the business, that's the true entrepreneurial spirit, is starting with what you have and plowing forward and just kind of protecting your assets the best that you can. So that would be, those are my best pieces of advice on kind of that subject there. I love it.


I love it. Look


For, look for advertisers. They, they, there are advertisements that says this person is pink color priming you. They're taking vacations they can't afford, they're doing things they shouldn't. So, ah, just keep an eye out for basic things like that.


Yep, yep. All right guys, we're gonna hit a break. We'll come back talking with Dawn. She's gonna talk us, tell us how to negotiate better.


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All right, welcome back to the show. Again, this week we're talking with Dawn Rasmussen check out her website. I mentioned it in passing, but I wanna make sure I can get it and we'll put it in show notes as well. But Ufollow her on LinkedIn as well. Uand then definitely check out her book on Amazon. U12 for 12 is the name of the book. Ubef and i, i, I don't wanna, I wanna talk about the, your five rules for negotiating. UI definitely know people wanna hear about that, but just real quick about the book. So the book is okay. Yeah, if you would just give us a little, kinda a summary of what the book is,


<Laugh>, it's a little, it's a fictional story. It's kind of a thriller, but it's about a fraud examiner who's, you know, closing her case. So if you wanna learn a little bit more about fraud and, and be very entertained, then I think you would enjoy 12 for 12, so, awesome. Awesome. I'm also known as the Fraud Pirate, and that's kind of my other domain, fraud, if you wanna look me up there.


Gotcha. Okay. Awesome. all right, so coming from someone with your experience, your background, all the different things you've seen with your experience I know you talk about some, your, your five rules for negotiating. Yes. walk us through those if you would. Dawn.


Okay. So Ken, I'm just gonna kind of piggyback off of one of your rules in your book. The don't fake the Funk about SMAC. Give me a little, your, your s starts with, you know getting to Yes, or, or start with it. Yes, start with it. Right. So, so a fraudster. So my rules are, they're kind of reverse engineered from the perspective of how a fraudster operates. But we use the overall umbrella rule that everybody in the world should be better off for having known you. So, so you wanna operate with that in mind. You don't wanna like defraud people, obviously. So like a fraudster knows that every time you have to say the word no, it gets more and more difficult. But he also knows that if you get angry enough to have to say it for the fourth time that you have been bottling it up and you're done, you're really truly done.


So the rule that I've a adopted is that no is never no until you've heard it for the fourth time. And if you want to go out and get something and accomplish something, and you need help from somebody, then you need to find a creative way of helping them see that this is mutually beneficial for both of us. And I'm gonna get you to say yes, even if I have to ask more than once. So that's my first rule. I'm sure you can relate because I'm sure that most salesmen have similar, similar rules to that, but a fraudster sure. That's, that's one of his top rules right there. The second, another one is like a fraudster will never hesitate to use leverage against you. And if he's out to get you, believe me, he has researched out his leverage. He knows how to get you to say yes when you are struggling, and he feels the squeeze, that is the moment he's going to throw that in your face.


But we don't wanna use leverage in a terrible way. So we always wanna look and say, how, how can I help this person get what they want while they give me what I want? And leverage needs to be seen as something not afraid to use, but something that you can use at the right moment and say, Hey, this is going to really help you and I'm going to, this is how. But a lot of people are afraid to use leverage because it feels manipulative when it's really not. So, like, for example, I had a company that was shutting down. They weren't being super great to all their employees, and it was time for me to discuss you know, all the things about, you know, like future pay and things after they let people go and mm-hmm. <Affirmative> and, and I went in with positive leverage <laugh>.


And my positive leverage was, you need my signature in three months on your s e c filing, so this is what I would like in return, and I will also give you these other things that you weren't looking for. And we were able to come to a happy solution just by looking at the things. But sometimes it can be as simple as getting like your local coffee shop worker to give you the right order every time and, and, and saying, Hey, how can I help this person help me? But I don't know. Does that make any sense? My Yeah,


Absolutely. No, I, I, I would almost summarize that in my words of leverage to a win-win. Yes, use leverage, but to a win-win situation


And be prepared, like know what they want, know what would really truly help that personnel. So the more creative you get, the better it's going to be. I'll tell you one story. I wanted to have a conversation with somebody who was kind of a high level up at a company and I could not get past his gatekeepers for anything. So I made a little website and I put a tantalizing message on there for something that I knew that would help him. And I sent in the mail this big, huge question mark, and all that was written on the question mark was the web address. And when he got in and saw that I was able to have my conversation, he did not know that I was working on a case and he gave me information he did not know he was giving me, that helped me go in a different direction, but at the same time I was able to help him and he was able to help me even if I couldn't disclose the true nature of our conversation.


So yeah, very creative, very creative <laugh>.


Yeah. Love it. It's super fun. It's always fun to, to to see what you can come up with. Another thing is, and this one is for women especially, always ask for more than what you want because you just might get it. You will be surprised if you go out and practice and ask for things you don't think that you can get. You are going to be surprised how often people say yes or offer an alternative that's just, or sometimes even better. So don't be afraid to ask. If they say no, you're not out anything you're already at No, by saying nothing. So that's one of my other rules


That that's one of my favorites, Dawn, it's a there's a Steve Jobs quote and he says, if you don't ask the answer's always no. Yes, it fits right into what you're saying.


Yes. I hope I, yeah. Who doesn't love all the Steve job quotes too, so <laugh>. One of the other things that I like to practice is fraudsters. They can be charming, very diplomatic and they practice all the time. <Laugh>, like you don't know, they're practicing online and you, when you're waiting in line somewhere and they practice when you're like so I guess the rule, the old rule about you catch more flies with honey, it definitely applies. You can say hard things like you said to your client, they asked you flat out, Hey, does our loved one, are they qualified to take over our business? Not super easy to say. No, not yet. But yeah, say it in a diplomatic way that says she might be able to improve by doing these things and then maybe she'll be prepared at a future date.


You know, so you can be diplomatic and and practice, practice, practice. My other rule is it's not really developed from the, the perspective of a fraudster. It's developed from having experienced being with fraudsters. And that is to always do a gut check. I trust my gut. If something fills off, oh, just walk away. There have been times where a great opportunity seemed to be at my doorstep and my gut was screaming at me, something's not right here. And so you ask questions and like, I've always learned that, you know, you don't get to the real root of something till you've asked why at least five times, right? Mm-Hmm. <affirmative>. So you start asking questions and asking more questions, and pretty soon stories unravel, but if you can't get to a true answer, walk away, you will never, ever regret it. Oh, let's see. Just, yeah, I guess those are my main rules. If you'd like to throw in any last thoughts there.


Yeah, no, I think it's great. And, and so, and, and I challenge people with the same thing, especially about, you know, your gut is, I think a lot of people were hesitant. Maybe they don't have the confidence or whatever, but you know, what I've challenged people with in the past is I said, look back at the times in your life and when your gut said something, how often was your gut incorrect? Because I'm willing to bet you it's very, I mean, it's probably 90 plus percent it was correct. So there might be a few times here and there where you're like, you know, this didn't pass a sniff test or whatever, but mm-hmm. <Affirmative> most of the time, you know, that's why it's that, that that instinct you have, I mean, we all have it and, you know, it's, it's, it's accurate more often, not for sure. Well, Don, we're, we're, we're, as always, we're outta time here if things go so quickly. But again, again, we'll put it in the show notes, follow her on LinkedIn, check out her book 12 for 12 on Amazon. Dawn, thanks so much for coming on the show. I really appreciate it.


It's been such a great pleasure being here with you today. Thanks so much for having me, Ken, Mr. Biz.


Absolutely. Yeah, absolutely. Absolutely, guys. Thanks for watching. Thanks for listening. Have a great rest of your week. And don't forget, as always, cash flow is king.


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