How to Negotiate During Business Acquisition

Roland Frasier
8 Aug 202009:01

Summary

TLDRThis negotiation-focused script delves into the speaker's collaborative approach to striking deals. Emphasizing the balance between price and terms, the speaker shares insights on how to approach fairness, avoid overpaying, and ensure mutual benefit. They advocate for a calm, thoughtful negotiation process, where both parties feel valued and excited about the outcome. The script highlights strategies like using 'no' to build rapport, pacing discussions, and using market data to determine fair value. Overall, it’s a guide to fostering positive deal dynamics and making decisions rooted in fairness and clarity.

Takeaways

  • 😀 Collaboration is key in negotiations; sit on the same side of the table to create a cooperative atmosphere.
  • 😀 The 'price vs. terms' concept: the best price comes with your terms, while the best terms require a higher price.
  • 😀 Fairness in negotiations is subjective; use market data to define 'fair' rather than emotional or personal interpretations.
  • 😀 Always ensure both parties are excited about the deal; a happy seller leads to a smoother transaction.
  • 😀 Don’t overestimate the future value of a deal; focus on the present value, not speculative projections.
  • 😀 Pace yourself in negotiations and be prepared to walk away if the deal isn’t right.
  • 😀 Always think carefully and avoid rushing your decision-making process during negotiations.
  • 😀 Recognize that each statement in negotiations can lead to further questions, so be mindful of how you communicate.
  • 😀 Practice patience in high-stakes conversations; counting to three before responding can help maintain control.
  • 😀 The first 'no' in a negotiation can break down barriers and establish safety and trust, making it easier to reach a deal.

Q & A

  • What is the speaker's approach to negotiating a deal?

    -The speaker emphasizes a collaborative approach to negotiations, preferring to sit on the seller's side of the table to foster a sense of partnership in the process. This approach aims to make the seller feel supported while working out the terms of the deal.

  • Why does the speaker avoid sitting across the table from the other party during negotiations?

    -The speaker believes that sitting across from the other party creates a physical barrier, making it less collaborative. Instead, they prefer sitting at the corner of the table, symbolizing a more cooperative stance.

  • What is the 'law of price and terms' mentioned in the script?

    -The 'law of price and terms' suggests that if you want the best price, you need to accept the seller's terms. Conversely, if you want the best terms, you must be willing to accept a lower price. This law underscores the idea that you cannot have both the best price and the best terms in a deal.

  • How does the speaker explain the concept of fairness in a negotiation?

    -The speaker warns that fairness is subjective and can often be used as a tool to bully someone into agreeing to unfavorable terms. They recommend focusing on fair market value, which is determined by independent companies and data, rather than personal interpretations of fairness.

  • What is the 'fairness zone' in negotiations?

    -The 'fairness zone' is a concept where there is a price or set of terms that may be unfair to the seller, but many sellers may agree to such terms. The speaker avoids deals that fall outside the fairness zone to ensure both parties are content and to avoid potential issues after the deal is closed.

  • How does the speaker illustrate the importance of excitement in a deal?

    -The speaker shares a personal story about purchasing a camera lens, where they emphasized that the seller should be excited about the sale. They believe that if the seller is not genuinely excited to make the deal, it could lead to problems later on, and they would prefer to walk away from such deals.

  • Why does the speaker caution against overpaying in a deal?

    -The speaker advises not to overpay by attributing too much value to potential future improvements. They emphasize that a deal should be based on the current value of the company or asset, not on future projections that may not materialize.

  • What does the speaker mean by 'present value, not future value'?

    -The speaker advises against buying a company or asset based on speculative future value. Instead, the purchase price should reflect the current, realistic value of the company or asset in the seller's hands, not what it might be worth after improvements.

  • What advice does the speaker give regarding pacing in negotiations?

    -The speaker suggests pacing oneself during negotiations and being prepared to walk away if necessary. They stress the importance of not rushing through the process and taking time to think carefully before responding or agreeing to terms.

  • How does the speaker relate negotiation tactics to depositions?

    -The speaker compares the pace of negotiations to a deposition, where a good litigator might speed up questioning to prevent the person being questioned from thinking too much. The speaker advocates for slowing down and being deliberate in responses to ensure clarity and prevent mistakes.

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Etiquetas Relacionadas
Negotiation TipsCollaborative ProcessFair DealsPrice StrategyBusiness NegotiationSeller RelationsNegotiation StylesTerms and PriceDeal MakingBusiness EthicsSeller Psychology
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