8d • General discussion
WE ALL NEGOTIATE
NEGOTIATION BASES
In every deal, there are three possible scenarios:
WHAT YOU WOULD LIKE TO GET
WHAT YOU NEED TO GET
WHAT YOU GET
When clients asked me what they could expect when they sold their business, I would tell them this, using 3 fingers to emphasise the point. The middle finger (no rude connotations) was what they would like, the ring finger was what they needed, and the pinky was what they would get.
I would then elaborate:
Number one makes you very happy, but the other parties are often less happy unless the deal is based on a win-win. This hope is akin to winning the lottery – it can happen, but it happens rarely.
Number two makes you breathe easier. You have recovered your costs and paid your debts. You may not be happy, but you will not be too sad, and the other party will be happy that they are getting value (hopefully).
Number three makes you unhappy and does not relieve the stress factors, but the other party is usually very happy. You are poorer, but wiser. Wisdom always comes at a cost, so you may end up broke, but wise.
You should always enter into negotiations understanding these options.
Go in expecting number one; you have looked at the deal from the eyes and expectations of the other party- what positives and negatives they may have, and how you can solve these.
This is your primary focus – what does the other party want, and how can you help them get it while working towards a successful number one?
I met a young Turk (a young business tycoon) who bragged in a very aggressive manner that he NEVER compromised. He was telling the truth, and his philosophy worked, until it didn’t. Perhaps his business technique would have worked for more than a couple of months had he not told everyone, and I mean everyone, that he would never compromise.
No one likes to lose, and everyone likes to win – or at least have enough wriggle-room to imagine that they did not totally lose. Very shortly into this young man's business life, his reputation for arrogance and his uncompromising attitude overwhelmed any skills or virtues he may have had, and his business failed, along with his enthusiasm and confidence.
There are many things we need to know and skills we need to hone when we are about to begin negotiation, too much for here, but you get the idea.
When it looks as if number one is dead in the water, you need to have some bargaining options. ‘I will accept X if we can negotiate Y?’ Losing Y is not a deal-breaker; if you have to surrender Y, hopefully this secures the deal, and you walk away with number two.
Perhaps you have exhausted all your possible bargaining chips, leaving you over the proverbial barrel. Desperation is not something that should ever be seen, and if you are desperate to close the deal, you need to maintain an attitude of mild disinterest, because humans are carnivores, and when they smell blood, their adrenaline floods decency, compassion, and fair play, leaving you not only broke but defeated.
Later, after the deal, you can start crying when you are in the secondhand shop buying a replacement shirt for the one you just lost.
I am about to enter the negotiating arena, and I began writing this to refresh my knowledge and clarify my 1, 2, 3, and 4. I can now start to clarify what I want without being silly, putting down a ‘his and her’ Rolls-Royce in pink and blue, or a 60-foot yacht to park in my 30-foot jetty, or whatever tickles my unfettered imagination.
What I ‘Want’ and what I ‘Need’ should not be confused – do I NEED a Lexus or will a Toyota suffice? Do I need 5 bedrooms when there are only two of us?
It is easy to work out what you ‘Need’ to clear your debts. And, sadly, that might be all you really ‘Need’ – the rest are ‘Wants’.
Once you have completed this, the second most important and essential prerequisite is to uncover as much information about what your clients want and need. Negotiations are sales at a higher level, and the psychology of sales still applies in this situation.
I hope this may have been of some use to those who are not accustomed to negotiations.
From my granny – “You’ve a guid Scots tongue in your heid.” Meaning, ask for help. Most people are happy to help.
Please reach out if you would like a chat.
Good luck.
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WE ALL NEGOTIATE
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