Negotiations regarding the sale of a company do not run by themselves. How do you ensure a pleasant negotiation?
Negotiating about a price must be done sharply, firmly and with an eye towards results. You make use of all opportunities, tricks and capitalise on circumstances. Each detail constitutes a win or a loss. The power balance continuously shifts. The outcome is a heavily fought over victory or a painful loss. There is a winner and a loser. This is a regular occurrence during negotiations. In this blog, you can read more about the different negotiation tips.
But, there is not always a winner and a loser, because this is not the only option. There is also a more relaxed version. This version is no less sharp and can regularly lead to better outcomes. During negotiations in which solely short-term results apply, the first version is absolutely superior. In this case, the long-term relationship is irrelevant; the short-term results count. You go for gold and use “the game” to your advantage. Think of buying something as a tourist in an Arabian bazaar. You engage in a one-time transaction. You don’t want to be cheated and focus on every detail. Sharp deal or not, afterwards you won’t see each other again. The result and the price established in the moment count.
Continuation of the negotiations
If, after the negotiations, you still have to deal with one another, different dimensions apply. Both the relationship and the future need to be considered. In other words, the negotiations continue for a long time.
How do you approach negotiations properly? Is there a fixed strategy? Not for me. It is always dependant on the circumstances, the people involved and the objectives you have. There are a few guidelines, however, that can provide a handlebar and direction.
Here are five tips:
- Clear objective
It is important to predetermine the objective you would like to achieve. Where would you like to end up? Which boundaries must you not cross? Stop when you’re nearing those boundaries. Cut off the conversation and do not allow yourself to get dragged to places where you don’t want to be.
- Limited emotion
It is not wise to allow emotions to play a large role in the heat of the negotiations. Emotions such as anger, disappointment or enthusiasm certainly contribute to the atmosphere and can assist in developing acceptance for the results and proper communication. But, negotiations regarding the price of the shares concerns business, facts and situations. It is about the business and expectations for the future.
- Good preparation
Another fixed rule in my negotiations is the importance of sufficient knowledge and a proper preparation. Details can make the difference between a successful and a less successful negotiation. This also concerns practical matters such as spaces, times, the process and language. Surprises cannot always be avoided. Knowledge gives you a leg up.
- Clever trading
On top of this, negotiating is always a form of trading. You give away something that is less valuable to you and receive something in return that is more valuable to you. The other party does the same. In pleasant negotiations, you can trade a lot; to the benefit of both parties. One party is a clever, creative entrepreneur; the other has a lot of money. That can easily result in a win-win situation. If it’s only about winning and power, these are generally less desirable long-term outcomes. In one way or another, the losing party will try to get his or her own back in the future, and he who laughs last, laughs best.
- Find shared interests
The fifth tip to negotiate successfully is searching for shared interests and naming them. If there are plenty, the chance of a successful deal is large. On top of this, it is important to pinpoint opposing interests. Will this make the negotiations less sharp? I don’t think so. There will always be an element of competition, but it doesn’t always have to be visible.
Do you find negotiating challenging? For example, when selling or purchasing a company? Click here to see what support you can receive during negotiations.
drs. Jurgen Boer RA, Partner