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.

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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.

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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,

office space,

equipment,

transportation,

recording,

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,

plus interest.

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?”

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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