Why do Negotiations often turn out poorly – A business broker perspective

This is part one of a three post series.  Click for the Second Post, Click for the Third Post

As business brokers working from Northern Virginia up through Central New Jersey (yes that includes Pennsylvania, Delaware, and Maryland) we are constantly negotiating.

Why do negotiations often turn out poorly? There are a lot of reasons. Today I am going to talk about the biggest reason:

We assume we know what the other side wants.

The Assumption: we think we “know” what the other side wants. We are convinced that what we “know” must be true and correct. Yet, how the world appears to us, and how it appears to the other side are often strikingly different. It is very easy to make assumptions based on similar situations in the past or past conversations with this person etc. This can be fatal. We needlessly lower price when they want assurances about warranty work. We provide training when they want a day off. The list is endless.

The best route to understand what the other party wants is to ask. When I say this I often hear, “But I did ask”. Unfortunately just asking once is generally not enough. We are asked so many questions that often the first time someone asks us something we deflect the question. For instance, when you walk into a store and the salesperson asks, “Can I help you”. Usually your answer is, “No, I am just looking”. Yet you would probably love help. Most salespeople walk away. A few will ask, “Who are you looking for, yourself or someone else”. Now often you will actually think about the question and answer. The old expression, “the 3rd time is the charm” has meaning here; usually by the third question you are actually engaged. Always ask three times three ways if something is important before you accept a brush-off answer.

Now I recognize that this is not a perfect solution, some people will try to game you with their answers and some people really do not know what they are looking for. But, go to the source. Ask questions about what the other party hopes to accomplish, why this is important to them, how they might go about doing what they are requesting of you, etc. Their answer is far more likely to be correct than old assumptions.

Take away: Ask questions to understand what the other party wants and why they want it.

 

Gregory Caruso, Esq., CPA, CVA
Harvest Business Advisors
gcaruso@harvestbusiness.com
Business Brokerage, Business Valuations
Virginia, Maryland, Pennsylvania, Delaware, New Jersey