If you know your boundaries before you enter negotiations with someone, you’ll sleep better at night.
Last year, I worked with a subcontractor who damaged my business. I dropped him when my client was unhappy with the work.
Earlier this year, I explored buying an ice cream and candy shop on Main Street in Jackson. (The city in California.)
Both experiences taught me three valuable lessons.
- Lesson 1: Be vulnerable to engender trust.
Tell people what you’re going through right now that’s causing you to approach the situation the way you are.
- Lesson 2: Get any negotiation agreement in writing.
Don’t do anything until there is something in writing so everyone involved has a clear understanding of what each side will provide to the other.
- Lesson 3: Be prepared to walk away.
If you find that the game the other side wants you to play isn’t worth playing, then walk away. If one side doesn’t do what they say, walk away.
When you know your boundaries, you know you’ll have a better chance of entering the right situation, whether it’s buying a profitable business or finding the right employee.
We’re in negotiations all the time in business, but some negotiations are more important than others because they will affect your business for months and years. We’re blinded by the romanticism of trusting someone and/or the good things the negotiation will bring.
And we’re blinded by the romanticism of trusting someone and/or the good things the negotiation will bring.
The risk is self-evident: If you’re wrong, you find yourself with unforeseen problems, stress, and damage to your business. That damage could include the loss of one or more clients.
I’ve trusted people in the past, and I’ve let that trust override my boundaries.
My business was damaged in several ways, and I’m determined not to repeat the experience.
Now I have written contracts with subcontractors. Even though the contract means I don’t find subcontractors right away, it excludes companies I don’t want. What’s more, I feel better knowing that we understand what each company is required to do. I can resolve adverse situations more quickly.
You’re the one in control, and there are plenty of places to get tips, advice, and even sample contracts.
Here are some tips for learning what you should be thinking about when you have a big business decision to make.
- Think about your boundaries.
If you’re presented with an opportunity to work with another company, hire someone, or buy a business (or its assets), think about what you want and don’t want. Pay special attention to your red lines.
- Ask for their terms.
Find out what the client wants from you, such as the purchase price, salary, and anything else they’re looking for. You may also find they’ll offer you some things, like training to run the ice cream and candy store.
- Tell the other party your terms.
Be sure to tell the other party your terms and what you need to make a decision, even if you don’t like the other party’s terms. The other party’s response will tell you if they’re willing to negotiate. I wrote a three-page memo to the selling agent instead of a long e-mail message that you can read here.
- Tell the other party about your past issues that are informing you now.
If the other party wants to negotiate, be vulnerable and let them know why you’re asking for what you want. Part of that “why” could be painful experiences from the past that inform you now.
- Don’t be afraid to go into detail.
You should go into detail even if it means you need to write a long e-mail message or even a long document if it will tell the other party what they need to know. If you’re negotiating as part of a team, then ask team members to include stories of their own.
- Ask others about the person or company.
Ask for references and talk with them thoroughly. Visit social networking profiles. For a business, ask other people in the area (such as a street), in their industry, suppliers, and even employees.
- Keep talking until it’s clear it’s a win-lose negotiation.
When it’s clear that the other party wants you to negotiate only on their terms, and they don’t acknowledge your issues and reciprocate them with their own, then that’s a red flag the size of a beach towel.
- Don’t be afraid to walk away.
Don’t stray from your boundaries because you’re in love with the prospect of having a person work with you or that everything in the business is fine because the other party says it is. Keep those red lines red and walk away. Your future self may well thank you.
- Consider leaving your options open.
Depending on the situation, you may want to leave your options open. When I turned down the candy and ice cream store, I told the agent that we’d still be willing to talk if the owners agreed to give us the information we needed.
Take Your Time
When you know what you’re willing to accept and what you’re not, then it’s much easier to find out if an opportunity is actually one — or not.
You’ll be a confident negotiator because you’ll know what you want, and you won’t have the stress of knowing you made a bad choice.
You can do it if you take the time to think about it and write down what you want. Having notes and even a checklist of questions to ask will help you decide who needs to be excluded.
Though it may cause frustration due to impatience, or disappointment that you didn’t get what you wanted, when you know your boundaries, your business will emerge stronger.
Eric Butow is the owner of Butow Communications Group (BCG). Eric can help you tailor your company’s digital marketing. Set up a meeting with BCG!