Editor’s note: This article was first published in July 2013, just before Lemonis’s CNBC show premiered on 30 July. The $3 billion figure for Camping World is from 2013.
Marcus Lemonis has spent his whole life in business. In fact, on 30 July he’ll be the star of a CNBC programme in which he’ll advise small businesses on how to become big companies. Given his experience and his track record of success, everything suggests he’ll pull it off.
But this businessman is a very unusual millionaire. While other entrepreneurs advise tying up deals properly, in writing and with lawyers present, Marcus Lemonis doesn’t believe in negotiating that way. He says he has never done it and never will. He only does business on a handshake.
Marcus explains that in medieval times, a knight’s word and a handshake between the parties were enough to seal an agreement. If anyone broke it, he was no knight.
Although it may sound crazy, Marcus maintains that a handshake is a completely legitimate way to seal a deal, and in fact, in the eyes of the law, a verbal contract is just as valid as a written one.
(Read: How to make sure a negotiation meeting is a success)
Marcus Lemonis says he built his company Camping World, a 3-billion-dollar business, negotiating only in the old handshake style. For him, it’s the only way.
“I’m a great believer that a person’s word and handshake are the best signature that person can have.”
How does he negotiate this way?
First, you have to negotiate with enough information for it to work. He never asks a question he doesn’t already know the answer to, Lemonis says.
Second, while documents tend to include all kinds of technical terms and legal language, plus a lot of small print, he says his negotiations are clear, simple and direct. “The easiest way for someone to let you down in this kind of agreement is to say afterwards that they didn’t understand the deal.”
“You have to make it very clear who will pay for what and who will keep what. If you can’t agree on the most basic terms, then there’s nothing to be done with that person.”
Lemonis says he doesn’t like walking into a meeting with a written document, because it could weigh the negotiation down. As a good negotiator, he understands that if there’s a good salesperson on the other side, fluidity becomes essential, since perfectly reasonable new elements could come into the deal.
He admits that his lawyer hates him doing business this way, because he could be cheated, as has already happened to him a couple of times, although he says: “If someone wants to screw you, they’ll screw you with or without a piece of paper.”
Lemonis says that on one occasion a company that owed him 125,000 dollars sent him an email saying they didn’t know what he was talking about and didn’t know him.
Marcus Lemonis’s advice in these cases: “Don’t let yourself be fooled, and don’t let people mistake kindness for weakness.”
For Lemonis, “Karma is a big bitch, and if you go down the wrong path in life, sooner or later that bitch is going to bite you.”
This man’s way of negotiating is interesting, and it has clearly worked for him. I also agree that one of the greatest virtues a person can have is keeping their word, both in a business deal and in life in general. But bearing in mind that, in Spain at least, there are plenty of characters whose word isn’t worth much, to avoid almost guaranteed problems, always put everything in writing.
Further reading
- 15 habits of successful salespeople
- How to be more persuasive and charismatic
- 5 things successful people do
Featured image: Michael Rivera, CC BY-SA 3.0, via Wikimedia Commons.
