Art of Negotiation
Chapter 20. No negotiation is final
The best way to find yourself is
to lose yourself in the service of others. – Mahatma Gandhi
Negotiation should be seen as an ongoing process.
No negotiation is final.
If you learn new information
that changes your mind about the situation,
go back and offer to open another negotiation.
In the previous section,
we talked about the “China Contract.”
If you are negotiating with a partner
with whom you intend to do business long-term,
the other party’s happiness should be your primary concern.
Invite the other party to come back to you
if the situation changes
and is no longer satisfied
with what you agreed to.
Never feel like falling into the trap of putting pen to paper
to sign a contract after a period of negotiation.
Always be ready to go back
and ask the other party to change any terms or conditions.
The worst case is that they say no,
but smart entrepreneurs will always know
how to make the other person happy
and consider changes.
Offer to exchange
When you come back and ask to renegotiate the deal,
make sure you have an exchange.
No one is seriously willing to renegotiate the deal
if there is no clear indication that they are in an advantage
or have the upper hand.
It’s your responsibility to think through
what you can offer the other party
before asking them to reduce certain conditions
that will ultimately cost them more.
Thinking through the benefits
or advantages you can bring to the other party is a good idea
to reopen negotiations,
change terms and conditions.
Write down a list of all you can offer
and “convince” the other party
to accept your new negotiation request based on the benefits to them.
Find the bank
When I first started my career,
I faced many financial difficulties.
The economy suddenly went into recession
and my business came to a standstill.
I have a bank loan and cannot pay it monthly.
What can I do then?
I discovered a little secret in the banking industry.
If the debt goes bad,
the loan manager or loan officer is in big trouble.
If you’re still paying the full monthly interest rate,
you can keep the debt short.
As long as the bank receives interest on the principal loan,
the debt is still considered a short-term debt on the bank’s books
and nobody gets in trouble.
So I reached out to Bob Murray,
my account manager,
and told him I couldn’t make the monthly principal payments,
but I could keep the debt short by paying interest
if he give me a few months until my business gets better.
He agreed immediately to my surprise.
He rewrote the debt in front of me,
calculated the monthly interest on it,
and asked if I could make the monthly payments.
I make a firm commitment to you.
He thanked me, shook my hand,
and our relationship continued without a hitch.
Call the creditor immediately
On another occasion,
my business was in serious trouble
and I could no longer pay the bills.
I have thousands of dollars in accounts payable for printing,
legal and other business services.
It was an uncomfortable situation.
Instead of avoiding phone calls and debt collectors,
I made a list of all my creditors
and went to see each one in person.
I told them honestly about my situation.
“In the current economic downturn,
my business is in serious trouble,”
I said. “But I still have hope of recovery.
Within the next three to six months,
my business could recover substantially,
and I could pay you back all of your debt,
But if you keep calling me and insisting
that I pay immediately,
my company will go bankrupt,
I will lose money,
and you will not receive any money.
So now you guys are flexible for me?”
Business people are often flexible
It’s amazing when they say,
“If you promise to make small payments each month,
we’ll let you continue
We will work with you until your business recovers
and all debts are paid off.”
I convinced them.
Within 6 months,
my business was thriving again
and I was able to pay off all the money I owed.
If a previous negotiation has put you in a bad position,
or you can’t afford your previous expenses now,
don’t be afraid to go back
and offer to change certain terms or conditions.
If you come up with a logical argument
and come up with a possible solution,
you will be surprised to see how other people also behave rationally.
People will forget what you said.
They will forget what you did.
But they will never forget how you made them feel. – Maya Angelou