Negotiations for Small Business Owners

How you view the person you’re negotiating with and the situation you’re negotiating can make or break your results in a deal. Many people approach negotiating with little to no flexibility and they have perceptions of the person they’re negotiating with that cause them to miss clues and opportunities. In this session you will learn:

1. The keys to managing your mindset during a negotiation;
2. How to view the person you’re negotiating with;
3. How to deal with the personal nature of negotiating tactics when they’re used against you;
4. The danger in having the wrong attitude for a negotiation;
5. Why deal alternatives are important to every deal;
6. How to identify and rank your alternatives to a deal, and how to use them to improve the deal you’re working on right now.

Preparation is often the single largest factor in determining your success in anything. Sports, military battles, business plans, and business deals all share the need for preparation. Preparation covers everything from understanding the rules of the game, to your options, to your opponent’s alternatives and tendencies. If you don’t take the time to consider these things you’ll be flying unprepared. In this session you’ll learn:

1. How to develop a game plan for your negotiations;
2. How to build the three lists you should have for every negotiation;
3. How long your list should be before you start negotiating;
4. How to rank both yours and your counterparts needs and goals for a negotiation;
5. A process for identifying tactical opportunities in your negotiations;
6. How to spot beforehand where your negotiations might deadlock;
7. How to deal with cost vs. value arguments;
8. How to define your walk-away point for a deal; How to figure out which things you should talk about last in a negotiation and which items you don’t want to wait too long to talk about.

We cover this tactic first because it’s often the one that your counterpart will use first, especially if they’re untrained. It’s also the one that will cause you to abandon your game planning, and that’s a problem. Scarcity is rarely real and you often have choices to help you manage the tactic. In this session you’ll learn:

1. How to cope with scarcity when you want what the other guy has;
2. How to plan for scarcity to be used against you;
3. How you can use scarcity as a tool in your deals.

Silence is quite possibly one of the single most powerful tactics there is. In a negotiation it can figuratively move mountains. Using silence isn’t always easy and having it used against you can be even more uncomfortable. In this session you’ll learn:

1. The two ways silence is valuable to you;
2. Why silence is such an incredible lever and how to use it;
3. The background psychology that makes silence work;
4. Which other tool you should combine silence with to really turbo-charge the silence tactic;
5. How to spot when silence is working for you

There are several times during a negotiation that using silence can be useful. In this session we'll walk through a real world negotiation and you'll learn:

1. How to use silence to manage you're counterpart's understanding of your motivation;
2. How to use silence to test and validate your assumptions.

My dad used to always tell me that there is no such thing as “fair”. In a negotiation fairness can become a hurdle because we are fundamentally hard-wired to be “fair”. Fairness shows up in several ways in a negotiation and you need to be aware of what it means, how to spot it, and how to deal with it. In this session you’ll learn:

1. Why fairness is an irrational idea in a negotiation and what you should really be concerned about in your deals;
2. Different concession patterns and what they tell you that your counterpart is thinking;
3. How to spot when your counterpart is trying to use fairness as a tactic;
4. Why you want your counterpart to make a profit in your deal;
5. The one fairness offer that should never be immediately accepted and how to respond to it;
6. Why the opening conversation is so valuable in a negotiation; and what you’re trying to achieve.

How you start into a negotiation is incredibly important. After you’ve done the game planning and before you actually start trading concessions with your counterpart there’s one very important thing you need to do, and that is to have your counterpart fully explain their position to you. But how do you do that? In this session you’ll learn:

1. How to avoid being the first person to concede;
2. A model for a conversation that will help your counterpart open up to you;
3. The information to listen for when your counterpart is telling their story;
4. What not to say or do when you’re getting your counterpart’s story;
5. What sort of questions to ask your counterpart at the beginning of the discussion;
6. The difference between what your counterpart says, and how they say it;
7. An approach that will help you avoid showing all your cards at the opening

Often, deciding what your initial bid or ask will be can be a challenge. And the event of actually presenting your bid or ask to your counterpart can be stressful. Many negotiators cost themselves money because of how they handle themselves during this part of the conversation. In this session we'll discuss:

1. The factors that determine your starting point;
2. The importance of understanding the features and benefits that your offer presents;
3. The one aspect you must be able to discuss when presenting your offer;
4. How to manage yourself while you're actually telling your counterpart what your number is;
5. The five piece answer that is the model for backing up your offer;

People love to deal in rounded numbers. They're easy to add and in fact the human mind finds them easy to process. The problem is that rounded numbers create a poor situation for sellers and buyers tend to give up too much money if they don't understand how exact numbers affect their thinking. In this session we'll cover:

1. What assumptions a person makes when they see a rounded number;
2. Why buyers pay more when they see exact numbers;
3. The mental effect of the zeros to the right of the decimal

Many people already understand the value of reference, or comparison, prices. We know that they help affect our counterpart's interpretation of our prices. However, not all reference prices are created equal. In fact, certain reference prices can work against you in a negotiation. In this session we'll cover:

1. The effect of reference prices on your counterpart's thinking;
2. How pricing units ($1,000s, $100s, $10s, and $1s) affect your counterparts perception of your pricing.

As a business owner you get into the practice of making assumptions so that your business doesn't get stuck in one place. Allowing that practice to become habit in a negotiations often means that you'll miss information or volunteer an off-target concession. In this session we'll cover:

1. The pitfalls of making assumptions about your counterpart's wants;
2. How to approach a rejection or a "no" from your counterpart;
3. How to determine what's keeping your counterpart from moving forward in the negotiation;
4. How to deal with open-ended or undefined demands from your counterpart;
5. Questioning your counterpart's facts and figures.

Competition is an often used tactic, but it’s often used poorly. Bluffing competition can be costly when negotiating with a trained or skilled counterpart. If you misread the clues you can cost yourself money. In this session you’ll learn:

1. Why and how having options works as a lever;
2. When competition work’s best in a negotiation, and how to best use it;
3. Five ways to deal with the competition tactic when it’s used against you;
4. Why bluffing isn’t always the best approach;
5. How to tell if your counterpart is bluffing;
6. How to call your counterpart’s bluff in a way that doesn’t insult them so they still want to do the deal with you.

Time pressure is an incredible lever in negotiations. Many people know instinctively to use it. Many companies unconsciously hurt themselves with it. In this session you’ll learn:

1. How to use time pressure in a negotiation;
2. How long to wait when you’re using time pressure;
3. Why you should never let your counterpart know what your timeline for a negotiation is;
4. When most concessions happen in a negotiation;
5. How time may play into your game planning

Sometimes the single worst part about being a business leader who’s handling a negotiation directly is that everyone knows you’re the person who has the ultimate authority to say “yes” or “no” to any part of a deal or the whole deal. It’s not always good to be in a position of authority. Being able to find others who are more powerful than you are in a negotiation can be very helpful to your position. In this session you will learn the 9 forms of authority or power in a negotiation;

In this session we'll walk through some specific situations that you might run across in a negotiation and discuss how you might deal with them. You'll learn:

1. The different ways to deflect your authority or power as a business owner;
2. How to gain power during a negotiation using organizations outside your business;
3. How written documents create power for you and your employees

Since negotiating is a two-sided process sometimes the shortest path to getting what you want is in helping your counterpart deal with their situation. In this session you’ll learn:

1. Why it’s good to help your counterpart with their problems and hurdles;
2. The list of things you should consider to be possible problems for your counterpart;
3. Why you shouldn’t make your counterpart solve their problems on their own;
4. The biggest pitfall of helping your counterpart deal with their problems and how to avoid its negative long-term impact on your business;
5. An understanding of why and how large companies manage risk with small companies

Doing business with a particular company for years can be both good and bad. The good part is that you can count on the revenue. The bad part is that things change and trusted revenue can disappear overnight if you’re not doing the things you need to do to take care of the relationship. In the session you’ll learn:

1. The two biggest ways that risk creeps into business relationships;
2. How to spot where and when relationship risk is creeping into a business relationship;
3. How to insulate your company from relationship risk

Setting up a Joint Venture or Teaming Agreement with another company can be a great way to grow your business. These sorts of arrangements do require a much more intimate level of sharing when it comes to how your business operates. They can sometimes slow you down when it comes to making decisions for your business. In this session you’ll learn:

1. The three big concepts to have in mind when negotiating a Joint Venture or Teaming Agreement;
2. Why companies enter these sorts of agreements;
3. What creates these risks;
4. How “driving a hard bargain” may not be the smartest thing to do in a Joint Venture

Up to this point we've covered the major (or common) negotiating tactics. There are several minor tactics that are often used for various reason and we'll cover 4 each in this session and the next two sessions. Those are:

1. Reverse Auction;
2. Nickel and Diming;
3. The Take Back;
4. The Squeeze.

1. The Target;
2. Deflection;
3. Good Cop, Bad Cop;
4. The Sidebar.

1. Empathy and Muscle;
2. Scheduling;
3. Association;
4. Champions.

In today’s world we handle a lot of transactions over the phone and through email. In many cases this approach works just fine, and in other situations it can lead to misunderstandings and/or missed details. Even worse, it can lead to strained or poor relationships. In this module you will:

1. Learn the rules for knowing when it’s okay to negotiate over the telephone and when it should be done in person.
2. Learn the rules for knowing when it’s okay to negotiate through email and when it should be done in person.

Many people complete negotiations without ever hearing their counterparts say "no" and they fear deadlock because they don't know how to get out of one. But if you never take your counterpart to "no" then how do you know that you got everything they were willing to give you? In this session we'll cover:

1. The approach to take to find your counterpart's limit;
2. What your counterpart is thinking about when you push them to their limit;
3. The two biggest reasons negotiators don't come back from deadlock;
4. Six different approaches you can use to resolve a deadlock;

After you've negotiated the deal there's still the fact that it has to be closed. You have to get signatures on the contract. Sometimes there are issues that come up in the contracting phase that can derail the whole deal. In this session we'll discus a few that you should start considering when you're putting together your game plan. We'll cover:

1. When you should ask for your counterpart's Master Services Agreement;
2. Intellectual property and other work product;
3. Marketing of the deal;
4. The importance of where the deal might be litigated if there's a disagreement;