Salaries, vendors, contractors, real estate, partnerships, commissions, etc.
- Before you negotiate
- What is it you want?
- What is it you would take/settle for?
- What would you walk away from?
- Who is the decision-maker?
- Who are you competing with? Options/ Competitors
- What are creative ways to give them what they want?
- Let them put the offer on the table first- better to counter than to lead
- Think how it pays off in 5 or 10 years
- Don’t bluff unless you can live with the result.
- Think Win-Win
- Is there another deal they will be involved in
You’re always negotiating your whole life, you just don’t realize it. You negotiate with the girl on that first date with you. You negotiate with your roommate to see who gets the bottom bunk in your first year in college, or at least I did. You negotiate with your parents growing up. You negotiate as a parent. It is a skill.
I negotiate all the time. I negotiate salaries, I negotiate with my vendors, my contractors. I negotiate with real estate deals. I negotiate partnerships, I negotiate commissions. I’m always negotiating. I negotiate with my clients. Let me tell you how I do it and how to do it really well.
Before You Negotiate
What is it you want?
What are you negotiating for? I’ve negotiated with people and ask them what they want and they can’t even articulate it, and that is frustrating.
What is it you would take/settle for?
I was just mentioning this to my son, I wanted to negotiate with one of the contractors that works for us in our platform, and he always kind of helps me see reality. I know what I want, but I know what I’d settle for. And I also know you can’t get anything if you don’t ask. I’ve also been shocked how many things I’ve asked for that I’ve actually gotten.
What would you walk away from?
I know a deal that I would walk away from, I know the non-starters. Non-negotiables. So what would you walk away from?
Who is the decision-maker?
Who am I trying to understand? If there are five people you are negotiating with, you need to know who is actually pulling the strings, You need to know who is influencing the person who’s pulling the strings as well.
Who are you competing with? Options/ Competitors
What are the options? Who are the competitors? You need to know all the people that you are actually negotiating against and with and you need to know all the players
What are creative ways to give them what they want?
Sometimes people tell me I want this, and I gotta find creative ways to provide that. It’s not always money. Maybe it’s making the deal easier or stretching out the terms of the deal. It’s giving them more time. Maybe you can do it faster, but you gotta find creative ways to give them what they want.
Let them put the offer on the table first- better to counter than to lead.
It’s better to counter than to leave. If you leave, they just say no. I’d rather hear their offer. That’s just my approach. I love starting with, what is it you want? It’s a very direct question.
Think how it pays off in 5 or 10 years
It doesn’t matter if I don’t quite get what I want, but if I’m going to make so much on the back end of this deal, does it really matter? And don’t ask for something that you would never take yourself.
Don’t bluff unless you can live with the result
I never do this. Don’t do it in relationships. Don’t do it to employees. Don’t threaten fire someone unless you can live with it. I they tell you if you don’t give it to them, they’re going to quit, just assume they’re going to do it.
When you’re negotiating, as a general rule, you try not to completely take advantage of somebody. Even if you can, the universe has an incredible way of coming back to bite you square in the rear.
I think win-win. I don’t want with them to look back an say “Oh, he totally took advantage of me, I’d never do a deal with him again.” Then they tell everybody they know…
I’m willing to take a little bit of a hit on one deal, but maybe we can combine three deals into it! Win-win!
Is there another deal they will be involved in?
Maybe I want to buy their company, but there’s other things involved in the deal. Maybe they have material or machinery that they have a separate contract for. Maybe this isn’t just a one-off and there’s other deals that are involved in this.