Learning how to negotiate a deal is a priceless craft that will help you build your multiple streams of income. Negotiating a deal is like an art form, like an actor of the performing arts must put themselves in their character’s shoes to understand how to play the role. You may understand how a successful deal will solve a problem, but use these three tips and you will make great deals that create a win/win situation. I always strive to not only solve a problem, but to finish the deal with the parties involved receiving a gain, because that is just good business. Building a reputation for doing “good” business is what brings deals to you instead of you having to hunt for deals.
1. Use Your Ears More than Your Mouth
Before you do business with anyone, whether it’s a big sale, or forming a contractual agreement, it’s good practice to have a pre-talk before getting down to business. This is the only instance I would say small talk actually serves a practical purpose. As you can tell from that statement I am not a fan of small talk, but if you want good business this is a crucial element to forming a great deal. So what do you get from having small talk before negotiating? Well, you don’t want to get into too much detail on anything in particular unless the other person is doing the talking, in that case always let them talk, but you will want to f.o.r.m. a relationship with this pre-negotiation chat. This is how to f.o.r.m. a relationship before talking business and what you receive that helps your negotiating:
Family – Does this person have children or any other dependents to care for? You aren’t trying to get too personal here. You just want to know if this will affect the deal you’re negotiating in regard to this person’s time, and/or motive.
Occupation – How is this person earning a living? Does this person have any hobbies? This has more to do with talking points within the deal.
Recreation – What is their favorite pastimes for purpose of entertainment. This may be a topic to connect with them if you have this in common, and/or use as a selling point in negotiation (e.g. creating a situation where this recreation becomes more available/abundant)
Money – This doesn’t mean pry into their personal financial situation and debts, but rather the yin to the yang, and receive an understanding of what their money goals are. By listening to what their goals are you will get an understanding of where they may be, if you were paying attention to the previous three topics of this chit chat. This topic will provide insight to how price/pay/points will affect this person’s reaction during the negotiation.
2. Trading Quid Pro Quo Cards
Locking in value in a deal is like trading cards. When you trade cards it’s a matter of this for that, or quid pro quo. If someone has value that you are interested in you are going to offer them equal value in return to create a fair trade. Even if you have to offer two or three cards in order to receive that valuable card that person holds, or vice versa. Never underestimate the concept of value is based on perception, and that one man’s trash may be another man’s treasure.
With that said there is a difference between someone perceiving something as trash, and just trying to pass trash off as value. I could never help but laugh at the classic attempt at negotiating some people would try, when making an offer on Craigslist. I would post something for sale and begin accepting offers, or bids. I would receive a lot of low ball offers, but then a decent offer comes along so I reply back. They made a good move by opening up with an attention grabbing offer, because clearly that got a reply, but then they try to negotiate:
“Hey, I’ll offer you $$$, but if I drive all the way to your place to pick it up, would you be willing to give me a discount?”
This is not an example of a quid pro quo card. This offer adds no value for the seller. This is like driving for an hour to a department store and asking them for a discount. The employees would look at you puzzled and you would just seem silly, not to mention selfish.
3. Be a Problem Solver
If you really want to understand how to offer value, then all you need to know is how to recognize a problem when you hear or see one. Then try to offer a solution within the deal itself. This will be valuable for the recipient, but doesn’t have to take a bite out of your value within the deal. For instance you are interested in buying a home from a guy who is moving out of state. You offer them more cash up front to help him with the expense of his move, which will help you pay less interest on your mortgage. Better still, You find out that this person loves to fish, so you offer up your boat, that’s collecting dust, as part of the down payment. If you are unable to solve a problem without shooting yourself in the foot then there is a strong possibility that the deal you’re negotiating is not for you, but that doesn’t mean you cannot sell, trade, or pass that deal to someone else!
Before you do business with anyone, whether it’s a big sale, or forming a contractual agreement, it’s good practice to have a pre-talk before getting down to business. This is the only instance I would say small talk actually serves a practical purpose. As you can tell from that statement I am not a fan of small talk, but if you want good business this is a crucial element to forming a great deal. So what do you get from having small talk before negotiating? Well, you don’t want to get into too much detail on anything in particular unless the other person is doing the talking, in that case always let them talk, but you will want to f.o.r.m. a relationship with this pre-negotiation chat. This is how to f.o.r.m. a relationship before talking business and what you receive that helps your negotiating:
Family – Does this person have children or any other dependents to care for? You aren’t trying to get too personal here. You just want to know if this will affect the deal you’re negotiating in regard to this person’s time, and/or motive.
Occupation – How is this person earning a living? Does this person have any hobbies? This has more to do with talking points within the deal.
Recreation – What is their favorite pastimes for purpose of entertainment. This may be a topic to connect with them if you have this in common, and/or use as a selling point in negotiation (e.g. creating a situation where this recreation becomes more available/abundant)
Money – This doesn’t mean pry into their personal financial situation and debts, but rather the yin to the yang, and receive an understanding of what their money goals are. By listening to what their goals are you will get an understanding of where they may be, if you were paying attention to the previous three topics of this chit chat. This topic will provide insight to how price/pay/points will affect this person’s reaction during the negotiation.
2. Trading Quid Pro Quo Cards
Locking in value in a deal is like trading cards. When you trade cards it’s a matter of this for that, or quid pro quo. If someone has value that you are interested in you are going to offer them equal value in return to create a fair trade. Even if you have to offer two or three cards in order to receive that valuable card that person holds, or vice versa. Never underestimate the concept of value is based on perception, and that one man’s trash may be another man’s treasure.
With that said there is a difference between someone perceiving something as trash, and just trying to pass trash off as value. I could never help but laugh at the classic attempt at negotiating some people would try, when making an offer on Craigslist. I would post something for sale and begin accepting offers, or bids. I would receive a lot of low ball offers, but then a decent offer comes along so I reply back. They made a good move by opening up with an attention grabbing offer, because clearly that got a reply, but then they try to negotiate:
“Hey, I’ll offer you $$$, but if I drive all the way to your place to pick it up, would you be willing to give me a discount?”
This is not an example of a quid pro quo card. This offer adds no value for the seller. This is like driving for an hour to a department store and asking them for a discount. The employees would look at you puzzled and you would just seem silly, not to mention selfish.
3. Be a Problem Solver
If you really want to understand how to offer value, then all you need to know is how to recognize a problem when you hear or see one. Then try to offer a solution within the deal itself. This will be valuable for the recipient, but doesn’t have to take a bite out of your value within the deal. For instance you are interested in buying a home from a guy who is moving out of state. You offer them more cash up front to help him with the expense of his move, which will help you pay less interest on your mortgage. Better still, You find out that this person loves to fish, so you offer up your boat, that’s collecting dust, as part of the down payment. If you are unable to solve a problem without shooting yourself in the foot then there is a strong possibility that the deal you’re negotiating is not for you, but that doesn’t mean you cannot sell, trade, or pass that deal to someone else!
