Do you provide a tasty crumble?

This is my second post for you regarding the subject of negotiation (you can find rule one here – Why you should never accept and opening offer).

Rule #2 – Nothing is given away for free (ever)

A common mistake made during negotiations is making concessions without gaining anything in return.

For instance, your buyer wants an extra 5p knocked off each of your widgets – what do you do?  Even if you can easily afford the concession, you should challenge it (see rule one).

This doesn’t mean simply smiling and saying “no” – although this would be a good place to start – it means coming up with a solution that meets not only your buyers needs but also your own as well.

Remember, a win-win scenario needs to be achieved for both parties (far too many businesses spend 80% of their time generating 20% of their profit).

A solution to this demand of a 5p reduction could be “This would be acceptable to us if we amend your terms of credit to 20 days from 30”.

This means you’d both win – buyer gets his reduction – you get your money sooner.

The other important factor connected to not making needless concessions is your very reputation as a negotiator.

Seriously – you give an inch, they’ll take a mile – imagine if you did say “no problem, we can do 5p”?

How long do you think it will be before they come back asking for a further 5p off?  Probably, not too long if you crumbled in to their demands!

However, if you show your (reasonable) mettle, it would certainly make them think twice.

Wouldn’t it?

Next up in our negotiation master-class is “Skinning Cats!”, make sure you don’t miss it by subscribing, and oh, if you like this post, please comment and share.

This is my first post for you regarding the subject of negotiation, and we’re going to start with rule #1.

Rule #1 – never accept an opening offer, without challenging it first.

There is no exception to this rule – even when you have an opening offer that is acceptable to you.

Lets look at the following scenario:

John is in the market for a Classic E-Type Jag and he has a budget of £25,000.

At the golf club (yes, I’m stereotyping) he has a round with George.

To give you a bit of background information on George – George actually has an E-Type which he’s thinking of selling, and has a figure of around £25,000 in his head.

As they teed off, neither John nor George know about the others intentions towards E-Types, but invariably the topic of John interest in acquiring a car like Georges’ turned up.

“I do love your car George, I’m actually looking to buy an E-Type myself this summer…”

“How much are you looking to spend?” replied George.

“About £25,000”

“I’ll sell you mine for that!”

And thus; on the 19th hole, the deal was done!

So was this a good deal?  Both parties got what they wanted for the figure they wanted?

Yes?  Well no actually… read on to find out why…

Both men drove home quite chuffed with themselves and exchanged cash-for-car the very next morning.

It was only after the money exchanged hands they started to feel a bit disappointed with the deal.

As John drove home, he started to notice the a little tear in the upholstery, he also realised the gearbox didn’t have an ‘overdrive’ feature…

It then dawned on him he accepted Georges opening offer…

“OH DEAR!” John thought, “George accepted my offer straight away – and he did seem very quick to accept – I wonder how much lower he would have gone – maybe I could have knocked off enough money to have the upholstery refurbished and to have an overdrive fitted.  HECK! I might have had money left over to spare!!!

Over to George…

As George drove home with his wife, she said…

“I don’t know why you sold that car, you loved it, think of the hours you spent painstakingly refurbishing it – I’m sure you could have got more than £25,000 for it…”

“Gosh, that’s true!” thought George “John did say around 25k… I wonder how much more he would have been willing to pay… If I could have got £30,000 out of him I would have all the funds I need for that Morgan I’ve got my eye on…”

And this is why you should always challenge an opening offer…

Even if the deal is within the parameters you originally deemed acceptable, by accepting an opening offer you will always wonder what could have been…
Next up in our negotiation master-class is “Why nothing is given away for free (ever)”, make sure you don’t miss it by subscribing, and oh, if you like this post, please comment and share.