Negotiations and Business Lessons: Win-Win Or Win-Lose

Win-Win Negotiations

According to Mike, procurement isn’t only about the price — anyone can buy cheap. It threads down to the asset quality, quality and timely delivery, and deep expertise — these are things you can’t buy cheap. To rectify this, all you need to do is create value for your organization. You need to know the sustainability of the supply chain as this is a crucial point to negotiate around.

Cash Flow Control

  • Have six months of cash on the balance sheet, three minimum
  • Have your investment capital on top
  • Have a separate bank account with your tax payments and trading account

If you concentrate everything on the same account, you’re taking loans from other parts without analyzing the impact where the money’s coming from.

Building Relationships For Negotiations

I believe that my success comes from the relationships I’ve built over the years. And also because I’m always catching up. In 2015, I decided to go virtual in my business. When the pandemic came, we had no adjustment. We’re already operating that way. Nothing changed in the relationship with my clients.

Lessons In The M&A Space

Let’s take it back to a couple of years ago when we used to go with the negotiation tips we heard. You may still listen to it or even have gone to a negotiating training that says, “never make the first offer.” Then this whole psychology came that thinks you should make the first offer because that’d help you anchor the deal. The question often arises: who should make the first offer? But there is no rule, and it depends on each deal. I believe it depends on the circumstances.

Negotiation Takes Time

Be careful with the last-minute cheapskate. If you’re negotiating with a company for a while and there’s no tension in the deal, don’t be surprised when they try to pay cheaper than agreed.

Choose A Business Framework

  • Start with the goals: What are the goals of each side or the interests of each side?
  • The timeline: How long will it take to close the deal? Write the milestones.
  • Analyze the deal variables: Write down the variable prices you think you’d accept as a minimum and balance the prices.
  • Capture the issues that may arise: Figure out the issues that may arise and how to solve them.

The last thing I want to remind you about is that negotiating tactics are helpful things to know. But they are not rules to be blindly followed. It all depends on the situation. And the more experience you have, the better negotiations happen.

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Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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Corey Kupfer

Corey Kupfer

Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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