My partner, Jake Crocker, often says that business deals are “won or lost on the first tee”. The first time he said this to me it caught my attention, and the analogy has worn well over the years.
In golf, handicaps are agreed upon before the game starts, usually on the first tee. If you say you are a 10 handicap and your competition says they are a 14, you “give” up four strokes to the other player. The handicap system is simply a way to arrange a fair competition.
“First tees” in business include:
- You’re buying a business or a major piece of software or equipment
- You’re starting a business
- You’re buying a building or land to build on
If you pay/set a fair price, just like setting fair handicaps, you can focus on playing your best game. If instead you pay too much or receive too little, it makes a difficult game even more so.
Interestingly, it doesn’t matter whether my opponent’s handicap is high or low, I simply need to know that it’s fair. The same is true in business; whether I pay a high or a low price, I only really need to judge based on my chances of receiving value in return.
If I play well and my opponent plays well, do we both have a fair chance of winning?
I work every day with people who planned poorly or paid too much on the first tee. It is sometimes excruciating to think that it didn’t have to be that way. If I play golf a second time with a person who fooled me about their handicap the first time, I suggest we just play for fun.
During the 17 years our other partner, Timmy, owned Raising Cane’s of Ohio, he let go of almost every function of the business as it grew to a large enterprise of almost 3,000 employees. The one exception was site selection which he and Jake remained involved in for every store from number 1 through 50.
This was because Timmy and Jake remembered that once your restaurant is located on a bad site (location), it’s very hard to recover. No different is getting the wrong handicap on the first tee, it will be a very long day of golf.
As Jack Stack said in his book, “The Great Game of Business”,
“Business is not an art or a science. It’s a competitive undertaking with rules, winners and losers, ways of keeping score, and all the elements of luck and talent”.
Golf similarly includes all the elements of luck and talent. And since golf, like business, is played with a scorecard, there is no hiding from mistakes on the first tee.
In our businesses and with any major purchase, once you negotiate the handicap (the wrong price or locate on the wrong site), it takes a very long time to recover. If ever.