The greatest tactic you can take into any negotiation is to give the other party what they want. Counter-intuitive, right?
Yet in successful negotiations, the idea is that both sides gain.
Negotiating can feel confrontational, and this is where the problem lies. Standing up for what you want, arguing for a better sale price, going through terms and conditions – most people equate these processes with conflict (to be avoided) rather than an inevitable part of working towards a mutually beneficial gain.
The good news is, negotiating is a skill which can be learnt.
We don’t recommend you launch your negotiating career with your first business sale, but with practice, trial and growth, negotiating a sale can be less complicated than you might imagine.
Good negotiators are:
- Aware of themselves and others
- Good planners
- Win-win oriented
- Good communicators
Planning is everything
Planning is vital in sales negotiations. Decide your minimum accepted outcome, your anticipated accepted outcome, and your ideal. Also, decide on your ‘option B’ if negotiations fail.
Clear planning comes from knowledge and insight, so research the buyer thoroughly and take the time to meet with them personally throughout the due diligence process.
When it comes to negotiations, have a clear idea of the other party’s expectations and desires.
Turn up to any negotiations with an agenda and present it calmly and concisely. Be clear about what you are offering and what you need from the other party.
Think about what the other party needs from the deal and take a comprehensive view.
Strive for mutually-beneficial solutions
Negotiating is about preparing for compromise. By asking lots of questions and paying attention to all details, you can negotiate a sale that is mutually beneficial.
The first offer/proposal is rarely the one to accept, so be sure to discuss compromises and make and receive concessions.
On average, you can expect to say no three times before saying yes.
It’s all about closing the deal
As you negotiate your sale, be aware of the signs that your deal is reaching its conclusion.
The other party’s counter-arguments may lack energy, they may exhibit tired body language, such as a weary lean at the table, or you may discover there is a convergence on the position you are both taking.
This is a great time to introduce closing statements, put decisions in writing, and follow-up quickly on any commitments made.
What if negotiations fail?
From your initial planning, you ought to have your minimum acceptable sale outcome.
However, if that isn’t met, it’s wise to have a plan C. In the trade, this is known as your ‘best alternative to negotiated agreement’ or BATNA.
Use this back-up plan as a place from which you can brainstorm to keep the negotiations going. Remember the focus is to do with outcomes not disagreements.
There is also great power in walking away – or, if you’ve reached the limit of your negotiating skills, you can invite a third-party mediator into the sale.
When you’ve agreed initial terms, the only thing that stands between you and a successful sale, at the price agreed, is a smooth due diligence process.