7 Secrets to Negotiating a Business Deal

i tell you one thing about negotiation negotiation can allow you to have pretty much anything you want and really help you to get it at prices that a lot of people just wouldn't even think were possible this house that i live in right now we remodeled this right as the pandemic started we moved into it and we were able to knock almost a million dollars off of the purchase price just from negotiating then we were able to get a contractor to come in and do this at about 20 less than they normally charged at a time when everybody was trying to get contractors to do things and prices were going through the roof and then on the financing the financing on it i asked the guy i said you know what if you finance the whole thing i couldn't get him to do that but i did get him to give us a two million dollar loan for 10 years only interest so we don't even have to pay the thing off 10 years so we're living in this crazy house for only a few thousand dollars a month just because of negotiating that's what it can do for you i'm going to share some secrets about negotiating that i think can help you do things like this too [Music] okay so let's talk about seven different secrets that will help you with any negotiation now i say here business transactions but the truth is you can apply this to anything in your life to make your deals better okay number one collaborate napoleon hill said you can succeed best and quickest by helping others to succeed that's so true it's really cool you actually can have win-win deals now here's how you do that right negotiation sounds like there's a winner and a loser i'm going to negotiate with you we're on opposite sides of the table what i hear that side of the table saying is this instead of that what if you were to collaborate when i do a deal with somebody i think about we're collaborating towards the outcome that's going to help both of us get what we want and that's absolutely possible so even as to the table positioning i'll drag the chair over onto their side of the table and sit down with them so that they can see that we're literally on the same side of the table collaborating collaborate don't negotiate that is secret number one okay secret number two this is a law it's the law it's not actually a law right but i tell you what that's actually an interesting thing about negotiation is if you say something's a law or these are our standard terms then people tend to not push back against it because you don't want to push back against a law and standard terms are what everybody's already agreed to so that's kind of a little sub bonus there but this is the law of price and terms okay what that says is that if i'm going to give you your price then it's going to be my terms right and if i'm going to get my terms then it's going to be your price so whenever you're negotiating you can acquire almost anything if the terms are right just remember that that's a big thing you want to acquire a thing that somebody says is let's say you think it's worth a hundred thousand dollars and they want a million dollars for it could you ever pay a million dollars for something that's only worth a hundred thousand well what if you said tell you what that's cool i agree to your million dollars but the law of price and terms says your price one million my terms i'll give you a dollar a year for a million years now obviously nobody's going to do a deal like that but it gives you an idea that you could actually do that you could pay a million dollars for something if you had long enough to pay for it so that it would roi so think about the law of price and terms and then many many more deals become possible okay secret number three is beware of fair you can remember that because it rhymes right nice rhymes fair market value that is subjective just take a look at the market cap valuation of a company like apple one day apple's worth a trillion dollars the literally the second day the next day it might be worth only 900 billion that's a hundred billion dollars in a day does it mean that apple was actually worth a hundred billion dollars less one day later heck no absolutely not it's what the market says it's worth right so fair market value is not actually fair right fair has nothing to do with it and when you're getting in a negotiation and somebody says hey man you need to just pay your fair share or i just want a fair price for this don't fall for it because fair is completely subjective it depends on what do people need or want at any given point in time so just remember that you got to beware fair don't let that impact what you're willing to do and don't let that impact the offer you're willing to make because fair is what people will agree to and we'll talk about fairness zone as kind of a corollary to this in the next secret okay the fourth secret which kind of goes with the third is the fairness zone so fairness isn't an attitude it's a professional skill that has to be developed and exercised i think that's kind of interesting right here's the fairness zone within any given deal that you do there will be some point and this is subjective to you this is just an overlay that i've found to be very helpful to being sure that everybody's actually happy with the deal and that i'm building good karma generally so in any transaction that you're going to do there's a point where the deal is too much in your favor you shouldn't go past that point there's also a point where the deal is not enough in your favor and you shouldn't go past that point so whenever you're negotiating try to think about what are the end points of fairness in the deal based on thinking about you and the seller and the deal okay so let's let's look at an example for this so uh just a simple example i was looking to buy a camera lens for my son and um i went on ebay and i made an offer for the camera lens and it was a low offer and uh but it was within the realm of fairness because i had seen camera lenses selling for that the seller came back and said okay i'll do it but it really sucks because i wanted to get this much for it and i need it for this this and this well so for him my offer was outside of the fairness zone because he wasn't going to be happy with it even though you might argue that it was within market value it wasn't a deal that he thought was fair i don't think you should ever make a deal with somebody where you don't think you're being fair to them or they feel right off the bat it's an unfair deal why because they'll find reasons to blow it up or they'll give you negative reviews or they'll just hate you generally or they'll tell somebody that you might be wanting to do a deal with three years from now oh i know that guy he's not fair he took advantage of me now did you actually do it no but if you don't get yourselves on the same page within the fairness zone you'll create bad karma bad reputation and really that makes for a bad deal so never allow somebody to do a deal that they feel is unfair and don't you go taking advantage of people by doing a deal that you think is unfair to them okay secret five for negotiating is to pay present value for the deal this is probably the biggest mistake that i see people make like when you get into the what we call the heat of the deal right you're you're like i want this to work out i want to succeed i can taste it i almost have this deal done and then the price is just a little bit too high and the truth is it's not worth what the seller's asking for right now so what the seller says when you say man i don't see how i can do that because you're asking more than it's worth is the seller says yeah but look when you do all the stuff to it that you're gonna do it's gonna be worth so much more than i'm asking and that is a big trap that a lot of people fall into don't you do it that only happens don't you ever pay more than the current fair market value present value today for a deal that is your money that the seller's trying to take from you the seller's trying to steal from you the value that you're going to add through your work that's not fair don't let them do it don't let them get away with it only pay what the deal is worth today never ever ever go above that and pay your share of what you're gonna get from building the value in the deal that's a really important thing okay so now we're up to six right secret number six is pace yourself pace yourself now dolph de roos smart real estate guy he's very lucky because for him the deal of a lifetime comes around once a week don't buy unless the numbers are absolutely right he says well so i've always said to me and i really do believe this that the deal of a lifetime comes around three or four times a year i find that about once a quarter there's a deal that comes across my desk that is just so amazing that i can't even believe it and that deal is the deal you want to do now here's the problem if you didn't pace yourself if you didn't pace yourself then you've done a ton of deals and you've got too much on your plate so you don't have the bandwidth to do the really amazing deal that you want to do or maybe you're putting cash in deals i don't like putting cash in deals i typically don't but if i invested in every deal that came my way i'd have no cash to do deals also if i'm in the deal i need to pace myself and you do too because here's a trick from lawyers i'm a recovering attorney right you know what we used to do when we're taking a deposition of somebody we create the rhythm and the pace in the deposition and they would tell us all kinds of things that they didn't want to tell us you can find that you're in that spot in a deal when somebody makes the deal go faster than you want it to go because they're controlling the deal cadence it's important for you to pace yourself so that you can create the pace for the deal okay secret seven we're on seven now right so what we're gonna talk about is keep it walls down what the heck does that even mean well here's the thing when you go into a negotiation when you're actually in a deal walls go up and people stop being collaborative and cooperative and they maybe get positions that they get stuck in what you want to do is keep everything walls down and that's why i say collaborate and chris voss did a great job of talking about this in his book never split the difference what he says is get them to start with no because when they say no they're not worried anymore about you getting them into a cadence of saying yes yes yes yes yes everybody says get them to yes and have them say yes five times and all this other crap that truly doesn't work i'll tell you what does work and chris has a great saying and the first time that i met him he said to me he said so roland would it be ridiculous to think that we could do a deal together and i said well yes chris because i knew that he wanted me to say no and it pissed him off no but anyway the would it be ridiculous is a great thing to say because when somebody says no then they're not afraid anymore that you're gonna trick them into saying yes to some key negotiating point so keep it walls down means start with allowing them the room to be able to say no let them say no they'll get more comfortable and that will then lead more likely to a yes walls down when i'm another good example is when i'm doing a deal to buy a business uh most people will start by saying i need financial statements and tax returns and all this other information well i don't do that i just say hey let's have a conversation and i've got a little checklist of the numbers i need and the things like that man i get people to give me more information that would be normally part of an nda a non-disclosure agreement by doing that and having it conversational then saying i need financial statements this this otherwise their walls go up and the conversation and the entire negotiation changes to one of adversarialness instead of cooperation keep the walls down so i've been talking about the seven secrets of negotiating i said business deals but the truth is it applies to anything and one of the cool things that i do is i cover that in a whole lot more detail in my book which is zero down it's how to acquire businesses with no money out of pocket and it's really cool when you get into a room and you are collaborating as i say instead of negotiating but you're collaborating to get a deal done and the the magic happens and somebody transfers their business to you and you now own 100 80 60 even 30 of somebody else's business that you didn't build and you didn't pay anything for it i just got a video from one of the guys eric who is in a training program that i do and eric said uh and i could see on his face the feeling that i had the first time that somebody signed a real estate uh deed over to me and i didn't give him anything for it's like oh my god i just i i can't believe i've done this right he was just he was like actually i actually did have to come out of pocket because i went and bought myself a bottle of champagne so that i could celebrate doing this deal i want you guys drinking the champagne and clanking glasses with me get my book learn how to do this stuff and let's do that hey thanks for watching the video it's so i'm just grateful that you took your time and you invested it to let me share some of my experience with you if you like this stuff i got a whole bunch of it i've got video video video on really cool things that i've learned over a long long time doing deals and being in business and i've had a reasonable amount of success at it i want you to too so just subscribe to this channel so that you don't miss anything because i'm releasing cool stuff all the time you know one advantage to doing things the way i do is i live this every single day this is stuff i did 20 years ago and now i'm just retired and teaching i'm sharing with you stuff that i'm taking away from deals every single day

Channel: Roland Frasier

Views: 13,287

Keywords: roland frasier, roland frasier epic, roland frasier epic challenge, mergers and acquisitions, mergers & acquisitions, mergers and acquisitions basics, buying a business, roland frasier buying business, acquisition, business acquisitions, entrepreneurship, m&a, mergers, business deal, buy a business, negotiating, how to negotiate, tips for negotiating well, negotiation tactics, negotiation strategies, m&a strategy, m&a structures, m&a deals, negotiation skills, negotiation tips

Id: ENT1_qqtFzk

Length: 13min 55sec (835 seconds)

Published: Tue Jun 21 2022