Negotiation for Small Businesses
-
Upload
markharrison -
Category
Business
-
view
4.617 -
download
4
description
Transcript of Negotiation for Small Businesses
Negotiation
So who is Mark Harrison?
● 37 years old● Studied Maths / Computing at Oxford, formed my first
company in my finals year. [It failed, BTW]● Joined the workforce in 1992, discovering IT paid
better Climbed the greasy pole for a few years, retired in 2003 (because I’d bought a bunch of investment properties)
● Got bored…. Now do three things (sometimes at the same time)– Interim Director– Run a training / mentoring business – Non-exec Director
We're all at it
vs.
vs.
Tim is (even now) WAY betterat tennis than me
Three Components
● Principles what● Psychology why● Ploys how
Principles
Principles
● You spend all this time worrying about what your customers want BUT…
What the hell is it you want?– Please DON’T tell me it’s a sale– Cashflow?– Growth (because you want to be bought)– A one-off purchase vs. a long-term relationship
● Think carefully, your customer might want something different
● The longer time they invest in negotiating, the more motivated they are to agree a deal
● BATNA (Best Alternative To Negotiated Agreement)
● Work out who the “economic buyer” is– If there are several, find them ALL– If your business is B2C, see later about WOMEN
IT’S NOTABOUT PRICE
People buy from people / brands
Buyers value other things
- (Speed / Security / Service)
- eg FSC Certification
Before you go into the negotiation
● What's the MOST you can pay– Or least you can settle for, if you're selling
– Auctions vs. leveraging Proprioception
Close the (conceptual) sale before you start
talking about price
Sell what customers want, eh?
Psychology
Beliefs
● Empowering● Disempowering
It’s a law?
● They need you?
Never say yes (or offer the asking price first)
● What happens if you do?● Is the seller
– Happy– Unhappy
Ploys
Ploys = Strategy + Tactics
● The strategy– Frame the negotiation– Get the seller to invest time– Never give away too much in one go– How much authority?
Opening Tactics
Frame the negotiation
Offer low / Ask high(Kingfisher compensation)
Tactic The Opening Response
● Flinch● For phone, gasp
● Just a bit of fun, or is it?
Time TacticAsk the wife
● For those without a wife...– Husband– Boyfriend– Girlfriend– Partner
● Take your time
Women buyers● Women buy… (US figures)
– 94% of home furnishing– 92% of holidays– 91% of new homes– 89% of new bank accounts– 80% of DIY purchases– 60% of cars– 51% of consumer electronics
[Source: www.tompeters.com]● Relationship● Networking
– This is not “wishy washy stuff”
Go away… then, when you come back...
● Only come up by a small amount– I was selling…
● My asking price, £179,950● They offered £170,000
Splitting the Difference
● Whoever offers to, loses● Encourage the vendor to make the offer
THEN
We aren't going to drop this over a few thousand / hundred are we?
Good cop, bad cop
● The vendor is bad cop● The estate agent is good cop
There is no good cop
OK – it’s a property example, but use what you learn across ALL your businesses
www.yourpropertyexpert.com