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Interview Patty

Talking Money Too Early

A Big Mistake in Negotiating a Deal

I recently had an email from a friend of mine regarding an opportunity that she was finding a little overwhelming. To put it simply, this was one of the biggest opportunities for a joint venture that she had ever had and the pressure was starting to show. A very big and very respected company wanted to buy her business and intellectual property for a global project and they wanted a proposal from her as soon as possible.


My friend was struggling to come up with prices, what did she really want, all of the 'what if's' and 'what could be', were combining to make her feel a little overwhelmed. Add to this the pressure of an impending meeting with the company, where she felt that she needed to attend with a detailed proposal with all details finalized and things getting a little out of control.


My advice was very simple. She was trying to get to the dollar value of the deal, and address all of the added complications before she had enough information. From my experience most larger organizations move very slowly, and whilst it may feel like a deal is moving ahead like a freight train, rest assured it will be slowed down the minute it hits the legal department. Then it will go at glacial speed as all risks are assessed and the minute details worked through.


I suggested that she go to the meeting, with some ideas, nothing finalized, and talk to them. Voice her concerns as well as the opportunity as she sees it, and get them to do the same. If it takes ten meetings, or a hundred meetings, take your time. Look at each meeting as a fact-finding mission and a way to get more clarity and at some stage, you will have enough information to start structuring the deal accordingly.


Taking my advice, my friend did exactly this, the deal has proceeded and it is easily the biggest financial opportunity of her life so far. Only when you fully understand the deal and how it can work, can you really put a detailed proposal together, with the right dollars and cents value, and the negotiation can commence.


All too often we feel the pressure to put a price on something before we have enough information to accurately do this. It's far better to get the deal right rather than get the deal fast.


Interestingly, another friend of mine, a consultant in the field of Neuroscience, always makes a point of doing a preliminary project free of charge for the client before they commence down the path of a commercial arrangement. This might be a workshop or some coaching with key people. The reason she does this is to ensure that she is the right fit for the organization - and if the preliminary work indicates that she is not, for whatever reason, she can walk away, with no negative feelings from the client.


Bottom line, take your time to get all of the information you need, then make an informed decision about where you go from there. Don't get pressured by others to give a price prematurely. If you do, it might just end badly.

Source: inc

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

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