The Backbone of All Business Negotiation
Sitting across the boardroom table. Their suit immaculate. You need to get the best price for you, and you know they are going to be doing their damnedest to get their best price. You are at opposite ends of the spectrum and over the next hour, afternoon, week, you have to find your way to something agreeable. Can you negotiate the best deal, or are you going to go back empty-handed? If you remember to be prepared, strategic, and diplomatic you just might have a chance to win this business negotiation.
These are the absolute basics of negotiation. Like any amazing artist or once in a generation athlete, the best don’t get to the top by neglecting the fundamentals – the building blocks of all later efforts. You need to remember these whenever you find yourself entering a boardroom, across the table from the other party, because they will, and you don’t want to end up on the losing side of the deal.
The Basics of Any Business Negotiation
First, a caveat. These are the fundamentals of any business negotiation. Whether you’re selling your custom product to a distributor or buying up a small business, these are the keys for successful negotiating. Keep them in mind when preparing for the meeting, and boy should you prepare!
Be Prepared
Before you head into the meeting, know who you are going to be dealing with. Make sure they have the ability to make a binding agreement of the sort you’re looking for. You don’t want to extend the hand only to find that it all needs to be passed higher up the chain. If possible, get in touch with someone who has handled the other party in the past, know what they are like, their strengths, their weaknesses, or whatever makes them tick.
Being prepared goes beyond just knowing the other party, it also means knowing what deal you are angling for, and the value of it. That leads us to the next key.
Be Strategic
You will never get what you don’t ask for. Remember that and make your first offer, aggressively if it suits you. The first offer is rarely accepted, but it does become the bar that all other offers are measured by. So go for it. Get what you want out of it. Come ready with extras, or decoys to attract their eyes. Know what you can offer up without hurting your position. If they want to remove those extras for a better price, you’ve lost nothing! Above all, be ready to pause or cancel the meeting if you can’t get what you need out of it. If the other party is firm in their position and it just isn’t viable for you, walk away. No deal is better than a bad deal.
Leverage the strengths you have. If you are negotiating a product and you are the only source of that, you have the bargaining power. Establish your skills, your value and your place as an authority early on in the meeting. Trying to catch-up mid-meeting is an uphill battle. Avoid it!
Be Respectful
You may have gotten the impression so far that when it comes to negotiating it’s about being domineering, aggressive, or commanding. That is not the case. You need to pay attention to everyone in the room, their body language, their speech patterns. You can’t be that present and aware if you are being disrespectful to everyone else.
When the other party rejects an offer, don’t immediately raise your defenses. Ask for clarification, get specifics. Don’t interrupt these – you’re looking for insight, not attacks. This is not an argument you are looking to win, and treating it as such won’t get you the results you want. Know when this is happening and know when to stop talking! The goal isn’t to prove you are right it is to get them to say ‘Yes!’
The Offer, The Deal, The Close
An offer is never just a dollar amount. It includes the scope of work, necessary next steps, the specific services (if any), warranties (again, if any), terms and conditions, and of course, the price. Include all necessary elements in the written agreement or contract.
If you are about to enter the boardroom to negotiate the buying or selling of a business, then you need to know that business’s value. MoneySoft offers DealSense Plus+, a Swiss army knife of business valuation. Give us a call and speak with a knowledgeable product advisor to see just how MoneySoft can help you seal the deal.