Professor tells how to negotiate a good deal.
When Bill Grimm talks about negotiations, he draws on deep and varied experiences to back it up.
The professor of practice in entrepreneurial finance and negotiations has earned degrees in mechanical engineering, business, and law; served on a Navy destroyer; and helped lead local tech companies. He also helped take several companies public, including Apopka-based Sawtek, which later sold to TriQuint Semiconductor for more than $1 billion.
He teaches those strategies to business students at the Crummer Graduate School of Business—students whose salaries and careers may depend on the skills they acquire in his classes.
Grimm teaches key practices in negotiating, including disregarding the popular emphasis on face-to-face tactics and psychological game playing.
Here are some tips to negotiating successful deals.
Don’t lie—but be prepared to be lied to.
An untruth, if exposed during negotiations, can wreck a deal. It’s bad strategy. But it’s just as foolish to assume that the other side will be 100 percent truthful. Know their business; know the market; know all you can about the other side.
Prepare. Prepare. Prepare.
“Ninety percent of any business negotiation is preparation,” Grimm says. “Ten percent is haggling.” If you’re prepared, he continues, “You can be quick on your feet, and none of the face-to-face tactics will bother you. You are less likely to budge.”
To do this, he recommends understanding the financial aspects of the deal, assuming that the other side will be doing its homework, knowing the range of competitive and comparable prices, anticipating the other side’s strategy, and laying out detailed responses.
Avoid being impulsive.
Grimm says that entrepreneurs are often forceful, willful personalities who want to get things done. That has its place, he says, but not in negotiations. Trying to bully or even pressure the other side into accepting a deal rarely works. If you are the target of such tactics, ignore them and stick to your game plan.
It’s not just about the price.
If both sides have done their due diligence, there may not be much wiggle room in the ultimate price. Nevertheless, negotiations always include nonmonetary items, such as delivery schedule, terms of payment, policies for defective parts or services, and penalties for noncompliance.
Don’t play mind games.
For Grimm, this is just a sideshow distraction when trying to close a deal—whether asking the boss for a raise or negotiating a corporate acquisition for a billion dollars. If negotiators on the other side are prepared, they will have their own strategies in place and won’t likely be swayed by high-pressure ploys. It might create ill will instead.
See the deal from the other person’s point of view.
What do they want out of it? What is the range of a fair price? Ultimately both sides want to gain something they can see as a win; neither side wants to lose face. Both sides have business reputations to protect.