Hey, there's a big topic that I think every one of us that's ever been either a buyer or a seller thinks about at some point in time. It can have such an impact on our results and the outcomes that we create, no matter which side of the transaction we're on. If you're a buyer, you're thinking about negotiating. If you're a seller, you may be thinking about it, but you may not like it. Let's just take a second and talk about negotiation.
Negotiation is a critical skill. If you're going to be in business development, or you're going to be the most effective business operator, you should always be aware that negotiation is something that could happen, and in a lot of cases, should happen for you to be getting the best opportunity to take care of your business and your expense management.
As a business development person, you should understand that negotiation is not just an exercise in making a concession just to close a deal. Negotiation requires both parties to give something back in the best interest of the long term for both parties involved in the negotiation.
I was a roofing contractor many, many years ago, and I hated negotiation. As I understood it, and as I practiced it, because I didn't know any better, I found that negotiation meant going to the lowest possible price that I was willing to suffer with, to get a job and provide work for my employees. It was a terrible mindset. It was horrible and I actually learned to hate it. As I developed in my career as a business development consultant, I found that a lot of salespeople have the same mindset about this critical component of business development success.
I bring up negotiation as a way to inspire you to think about the beginning of the sales process or the business development process, as opposed to the end of it.
Why do we end up negotiating so often? Because we don't do the right things to open the business development conversation.
We don't talk about the deal breakers that are going to be there that can force you into into a negotiation, even if you've gotten things pretty correct in your sales process. We don't have the courage to say no, to retain control of the process, and we give the buyer the upper hand. We feel like the only thing we can do is given to get anything back. So, I want everyone to reframe negotiating in their mind. You can negotiate with an attitude of success or desperation. If you're negotiating from an attitude of desperation, just tell the buyer, "just tell me the price that you want, and I'll decide if I can get it". If you're negotiating from a sense of strength, meaning this one deal can never be that important. I can go find another deal and you're willing to walk away and understand that you'll live another day in business development. Negotiation is a great place to really determine how successful you'd like to be. The one thing that I find that creates the biggest problems in the negotiation step. Sellers don't know how to get there because they don't know how to control the sales process from the beginning.
So, if you want to negotiate stronger, there's a lot of great courses out there. There's a lot of great training on negotiating. But, I think that's trying to fix something that's a symptom as opposed to a root cause. My advice to each and every one of you:
- Work on the front end of your business development process
- Get the problems and priorities
- Do a great diagnostic interview
- Make the connection to someone personally
- Negotiate with the power of that information, and how you can understand why someone needs to make a decision, needs to value your product or your service, and needs to understand they can't afford to let you walk away.