Negotiation Do’s and Don’ts

We live in a world of negotiations.  We negotiate the price of our car, where to eat lunch, and we even negotiate with our kids to get them to eat their vegetables.

The same is true in your business.  You may feel like you are living in a flea market, since you are constantly:

·         Negotiating price breaks with your vendors

·         Negotiating salaries with your employees

·         Negotiating lease terms with your landlord

·         Negotiating contracts on just about anything

         Negotiating doesn’t have to be a painful experience.  You simply need some basic ground rules and the do’s and don’ts before beginning the process.

• DON’T – Just wing it!  Even though you feel pretty good about your people skills, you still need to have a clear idea of your objectives; otherwise, you won’t know what you are negotiating for.

• DO – Identify your goals before negotiating.  You need to know your bottom line, so you will have clear parameters and even know when to walk away.

• DON’T – Try to beat your opponent into submission.  Even if you have all of the leverage, you may ultimately turn the other party off.  Most people would rather walk away with their dignity, than a small sum they had to beg for.

• DO – Look for the win-win.  This will keep the process moving forward and give you the opportunity for working with this person again in the future. 

• DON’T - Negotiate against yourself. If you make an offer, wait for the response. Be careful in using the phrase, “Why don’t you throw out a number?” Usually, the first amount mentioned by a seller is the amount that’s ultimately agreed upon.

• DO – Ask for what you want.  This means being specific about what you want and don’t want.

• DON’T – Take things personally, even if the other person gets personal.  Stay calm during the process and avoid losing your temper if negotiations don’t go your way.

• DO - Present your side with clear and concise facts.  Act with confidence, even if you have to “fake it, till you make it.” 

• DON’T – Assume that there will be zero tax consequences from a sale or purchase. 

• DO – Meet with your CPA (we hear Hardee Accounting is pretty good) to determine what, if any, tax implications there are to making this deal.