Business 101.5 – Sharp Negotiations
It’s common for there to be lots of negotiations in business, but inexperienced negotiators are usually easy to spot from a mile off.
For example, they’ll be the ones who are looking at a fair deal offered by you – perhaps a 50/50 profit share on a joint venture – and who decide to follow the greed train with a counter-offer that’s so much more favourable to them, such as a 70/30 split without anything else being changed. They will be really keen to push forward all their value but forget about all the work you are doing and what you are bringing to the table.
The reason that this is a sign of an inexperienced negotiator is that they think they’re simply pushing for better terms for themselves while hanging on to the original offer as a back-up plan. What they fail to realise is that the new ‘offer’, in law, clears the other one from the table as if it had never existed. They lose a lot more than that though too, they lose the goodwill that got them that first offer and raises some serious doubts and alarm bells about how they will conduct themselves into the venture with a ‘ all for me’ attitude.
The other party is within their rights to walk away and find someone else to partner with, leaving the ‘negotiator’ with empty air in their hands and a ‘could have been a contender’ feeling.
For an additional example of the structure of a business negotiation and why it may go wrong, listen to the audio version on SoundCloud.