Effective Ways to Negotiate Business Deals
Many prospective buyers and sellers neglect the importance of negotiations. They can also be very tricky if you don’t watch out though. Negotiations can go either way and if you don’t know how to negotiate, you may be at a big disadvantage and miss many tells and details that the avid negotiator picks up in a jiffy. Here are just a few techniques that can help your deal go through if you apply them at the right time and the right way.
Take it or Leave it
This is a very well-known tactic that you may have seen in television shows and movies or read about in books. This is a tactic that is used to stop counter offers and continuous bargaining and should be used as a last resort when the price for something can’t go any lower for a seller and not any higher for a buyer. It also has to be used sparingly because it’s an indication of one party not willing to budge on a last offer. If the party that uses this technique is swayed in to renegotiating after this, they’ve showed their hand and exposed a weakness. However, if applied too early, the seller or buyer can come across as too rigid and inflexible.
Considering Splitting the Difference
Another tactic is to simply offer splitting the difference in the deal. This tactic is very straightforward and a way to demonstrate that you have the capacity for flexibility and amicably resolving conflicts. It also paves the way for future deals that you may want to conduct.
However, in this technique it is very important to make sure that the financials make sense for you. It is also very important to make sure that all the factors involved have been considered and that this is a better alternative than letting the deal fall apart. This and the financial part of the deal have to work in tandem for the difference being split to pay off. Otherwise, you may end up with a loss or the other party may end up with a profit that isn’t warranted.
This is what negotiation is all about, weighing the pros and cons and going for the best option for both parties involved.
What is Important to Each Party?
This is a simple exercise of what matters to whom. Sometimes the money isn’t everything. Sometimes, there is intrinsic value to something that one party wants to acquire that making a loss doesn’t matter and sometimes there is a deep need to pay off debt or to get the maximum profit for one party and the other party can bear a little loss. Hence, it’s important to recognize both facts and the things that both parties’ value to reach and amicable conclusion.
Bringing in a Pro
You can obviously just hand over the entire deal making procedure to a professional business broker or deal broker if you want and be done with it. This is one person that will understand what you value, that you get a great deal, and that both parties leave the deal happy. Remember, if you can’t negotiate, it’s better to get someone else to do it for you.