In life, you don’t get what you deserve, you get what you negotiate. Therefore, building the right connections is highly important. At the end of the day, people do business with people, and it’s essential that entrepreneurs understand this going into any venture. Beyond connecting with the right people, you must also know how to negotiate. And believe it or not, most people are clueless when it comes to making a deal. However, I have a few invaluable tips that will help you get ahead in life.
People want to be heard. Point. Blank. Period. Therefore, if you want to establish a good deal, you can’t just focus strictly on what you’re looking to get out of it. Listen to what the other party needs and find a way to accommodate those needs. Want me to let you in on a simple trick to figure out what someone wants? Ask them “How can I help you?” No need to try to play psychic. Simply ask and they’ll answer, and you can proceed to assist in whatever way you can. When you genuinely care about the needs of others, they’ll tend to remember you and you’ll have an ally ready to fight to help you succeed whenever you need it.
Avoid the word between
Sometimes it’s tempting to throw out a tentative numeral figure when negotiating. For instance, “I’ll do this job for between $5,000 -$8,000.” This is where a lot of people fail. You’ll end up selling yourself short because most people are going to aim for the lower amount. Instead be concise with whatever estimations you give, whether it’s price, time frame, date or any other number.
Don’t point put the time clock
Time may be ticking, but it’s not your place to point it out. Avoid using statements like “I think we’re close” when negotiating especially if you’re not under some sort of tight deadline. It makes you look too eager and it can come off as desperate. It can also expose you to the other party stalling or trying to squeeze you for more than you’re willing to give. In turn, your best bet is to make sure the deal is simply good enough that the other party is the one who’s eager to close on it.
Throw out the first number
People tend to be afraid of being the first one to throw out a number when negotiating, but whoever throws out the first number usually picks up the advantage. Most deals tend to pan out closer to the first figure that’s thrown out on the table. It sets the tone and essentially the negotiation becomes centered around that first bid. However, keep the numbers reasonable. You’ll lose the deal if you throw out some ridiculous number to start the bidding.
In most cases, the person who comes stacked with the most leverage ends up with the better end of the deal. One of the most important ways you can establish leverage is to keep your emotions under control. If you become overly emotional while negotiating a deal, the other party is likely to chew you up and spit you out. Two reasons, if you become emotional you make it much easier for the other party to read you and you won’t be able to think straight. The best negotiators put on a stone face. They won’t let things rattle, frustrate or fluster them.
Another way to establish leverage is to constantly be aware of current events that could tip a negotiation one way or another. For instance, with the COVID-19 pandemic striking the world at this time, start-ups may want to hold off on establishing any negotiations at this time. A lot of companies now are going back and trying to invoke MAC or material adverse change clauses to back out of deals. This is taking away leverage from the start-ups and can put them in a vulnerable position if they don’t play their cards right.
Knowing how to negotiate will be the most important skill you can develop. It is the key to your success, so, go out and master it. You can have the best ideas, the most money, and all the technology in the world, but if you don’t know how to craft a proper deal, it will do you no justice. As my father always said, “At the end of the day, and no matter what technological miracles are conceived, people do business with people. The greatest deals in the world are sealed by a simple handshake, and some are broken over simple personal animosity.”
Ziad K. Abdelnour is Founder, President & CEO of Blackhawk Partners, Inc. a private “family office” in the business of originating, structuring & acting as an equity investor in strategic corporate investments and co-Founder of Blackhawk Development Group LLC; a trading platform focusing on the financing of real estate, infrastructure and project finance properties throughout the US.