Mastering Negotiation: The Art of Pre-Framing in Business Deals

Summary

The script outlines an eight-step framework designed to tactfully negotiate business deals, particularly for acquiring businesses under unrealistic valuations without appearing condescending. This method involves building rapport, strategically shifting blame to external factors like bank valuations, and gently guiding the seller to understand the realistic value of their business. The framework aims to prepare sellers for annuity offers, combat broker barriers, and establish a logical, indisputable narrative for negotiation. It emphasizes timing and communication skills, warning that it may not be effective for everyone, especially those who come across as naturally condescending or poor communicators. The approach combines education, prophecy, advocacy, and exploring alternatives beyond the initial financial offer, seeking to understand what truly matters to the seller beyond money.

Takeaways

• 🙂 The AP step framework allows for persuasive communication without direct insult, aiming to prepare recipients for lower valuation offers in negotiations.
• 💡 The framework consists of creating a 'like bridge', blaming external factors (e.g., the bank), prophesizing common challenges, presenting a solution, and emphasizing the issue lies with the situation, not the person.
• 🙋‍♂️ It is designed to help in negotiations by logically and indisputably explaining why a business might not be worth as much as the owner believes.
• 😎 The approach can be applied beyond business deals, such as in personal conversations or negotiations with a spouse.
• 💰 The framework is particularly useful for overcoming 'broker walls' and acquiring businesses by framing the negotiation in a logical, non-confrontational manner.
• 📝 Pre-framing, the initial step, involves setting realistic expectations about the feasibility of cash payments in business acquisitions.
• 💭 Prophesizing about future challenges and offering solutions can help build trust and open dialogue for negotiation.
• 🙇‍♂️ Emphasizing 'it's not me, it's you' shifts the focus from personal inadequacies to external valuation concerns, potentially making the conversation less defensive.
• 📌 The timing and context of using this framework are crucial for its effectiveness, especially aligning it with the negotiation stage.
• 🙏 It encourages exploring underlying motivations and values beyond money, aiming for a more comprehensive understanding and agreement.

Q & A

What is the purpose of the AP step framework?

The purpose of the AP step framework is to help individuals present and negotiate offers, particularly in business acquisitions, in a logical and non-confrontational manner. It aims to enable the speaker to communicate effectively, even potentially negative information, without directly offending the other party.

Can the AP step framework be applied to personal conversations, such as talking to a spouse?

Yes, the AP step framework can be adapted for personal conversations, including discussions with a spouse, by using its principles to communicate effectively and empathetically.

What is the 'like bridge' in the AP step framework?

The 'like bridge' is a step in the AP framework where the speaker establishes common ground or a shared understanding with the listener to foster a positive connection before moving on to more challenging topics.

How does the AP step framework suggest handling objections or concerns about business valuation?

The framework suggests addressing objections or concerns about business valuation by 'blaming the bank,' meaning attributing the valuation issues to the bank's lending criteria rather than the individual's personal opinion, to depersonalize the objection.

What is the 'pre-offer preframe' in the context of the AP step framework?

The 'pre-offer preframe' is a specific phase in the negotiation process, according to the AP step framework, where the groundwork is laid before making an offer. It involves preparing the seller for the offer by setting expectations regarding the feasibility and common practices of business acquisitions.

Why is timing crucial in applying the AP step framework?

Timing is crucial because the effectiveness of the AP step framework depends on applying its steps at the appropriate moment in the negotiation process. Using the framework too early or out of context can lead to misunderstandings or reduced effectiveness.

How does the AP step framework propose to overcome the 'broker wall'?

The framework suggests using 'pre-framing' as a tactic to overcome the 'broker wall,' which refers to the barriers and requirements set by brokers before allowing potential buyers to view business financials. Pre-framing helps to set expectations and navigate these requirements more effectively.

What does the 'it's not me, it's you' step entail in the AP step framework?

This step involves shifting the focus away from the speaker's own limitations or decisions and instead emphasizing external factors or the listener's situation as the reason for any challenges or decisions being made, particularly in the context of business valuation and acquisition negotiations.

Why is the AP step framework not suitable for everyone?

The framework may not be suitable for individuals who naturally come off as condescending or are not skilled communicators, as it requires the ability to deliver messages in a thoughtful and effective manner without alienating the listener.

What is the significance of 'what else' in the AP step framework?

The 'what else' step encourages the speaker to explore additional concerns or priorities the listener may have beyond the immediate topic of discussion, such as financial compensation in a business sale, to understand their broader needs and motivations.