The fine art of negotiations

At one point when building up your business, you will find yourself at one end of a negotiating table. It could be negotiating prices with suppliers or potential clients. It could be the interest rate on a loan. You could be purchasing property or negotiating salary with employees. Either way, knowing how to go about it could spell or avert doom for your financial life.

Four business people, no strangers to negotiations, share what they know.

I lost millions on a sour deal

Mary Murigah, the lead consultant and coach at Kipawa International has been involved in negotiations involving land purchases, service provision and as a human resource practitioner, negotiating with people.

The best deal I ever made…

I was involved in the purchase of some property that had 22 owners. Their common goal was to sell the property to the highest bidder. But they not only sold to the lowest bidder but the least influential buyer as well. My team designed the whole game to our favour and used the same sellers to get us the land at our price and eliminate all other offers.

The worst deal I ever made

Once, I got involved in the purchase of a small piece of land from an old man in a new town I had never invested in before. He seemed to be in some stressful condition that needed some financial rescue. His team on the ground was very enlightened on matters land and extremely ‘helpful’ in confirming all the details I required. The pricing was perfect. I made my purchase with very little negotiation. What a horrible deal it turned out to be! I lost a couple of millions as the land turned out to be useless for my intended purpose. But what went wrong? I was an unprepared buyer who went into the negotiations with emotions, poor data, hopeless trust, and never asked the hard questions.

I walk away from the negotiating table when…

I sense dishonesty. When I am convinced the seller is an opportunist and will not collaborate in any way. I leave the table to save myself from a disagreement. Recently I was again involved with some land I was interested in where the seller quoted a price double the value. He was not open to any discussion on my offer and although the piece of land was to die for, it was not worth the hassles.

WHAT I HAVE LEARNT ABOUT NEGOTIATING…

1. Collect as much information beforehand

Gather all information you possibly can around the subject. For example, if I am planning to buy some land, I need to know who the owners are and what they are like in order to show up in the most presentable way. I also need to know what the possible uses of the land are since this often determines price.

Are there other offers on the table? Is there some urgency in the sale as opposed to mere posturing? What are the area restrictions or possible zoning amendments? With this information, I have an upper hand in the negotiations.

2. Don’t play fools

In a negotiation, everyone is observing for any form of excitement or frustration that can be used against you. Understand the powers you possess such as your degree of influence, level of commitment and resilience at the negotiating table, your ability to persuade, the advantage of exclusive information, and available time. If you are the buyer, the seller will also have some tricks and will equally be hoping to collect data on your ability to pay, your degree of desperation – anything they can draw out of you to control the deal.

3. Break to consult

One of the parties may drop information you did not expect and that you possibly hoped to use as your game changer. Such information can weaken your negotiating power. Never be afraid of taking a break out of the room to consult.

Surprises will make me walk away

Asim Shah, CEO of Tarpo Industries, a soft roof shelter solutions provider for those in humanitarian relief services, military, oil, gas and mining exploration, tourism and hospitality.

My best deals are…

In my line of business, this is when the client allows me and my team to plan the entire project and advise on when and how to engage other stakeholders. It a show of trust and creates a seamless process. Again, everyone wins.

The worst deals I have gotten are …

Where a client doesn’t know what he wants. It is usually a lack of planning and failure to involve all stakeholders on a project.

WHAT I HAVE LEARNT ABOUT NEGOTIATING…

1. Both parties should win

In my experience, there is no ‘best deal’ in a business negotiation. When each party feels valued in the deal-making process, then all win. Integrity and trust allows both myself and the client to put our transaction at par. When a client is serious about the need to do business with us – money becomes less of a priority. Once they buy into our expertise and experience, they have bought into our integrity as well.

2. Surprises spring out of dishonesty

Personally, I don’t think there should be any surprises in the negotiations if everyone is trying to reach a win-win scenario. If a surprise pops up during the negotiations, then I walk away as this tells me there will be more surprises afterwards. Someone is just not being honest. In fact, when it’s a one-way street in terms of communication and information sharing during the negotiations, it is time to take a hike.

3. Know your key selling points

In negotiations, I am the one who knows my business inside out. Nobody else on the negotiating table does. This knowledge informs me the cards to play during the process. While there are aspects that everyone knows, what is your unique selling point?

***Aulga Nato, fashion designer and founder of Nato Design House.***

I lost all my investment on a bad deal

Aulga Nato, fashion designer and founder of clothing label Nato Design House, a brand that expresses contemporary Afro-urban style

My best deal

This was when I was negotiating to buy a night club called Urban life in Homa Bay back in 2016. It had been mismanaged and the owner was willing to do anything to sell it and get away from that business. I sold it after two years for a tidy profit.

And the worst?

This was when I invested in the oil business in 2014 with zero background checks on how such a business works. I would put in about Sh500,000 weekly and get some returns. I was then advised to partner and I put in two million shillings but didn’t know the company was in debt, Rather than bring in new stock, my money went to service the debt, the company fizzled out and I lost all my investment.

In another negotiation, I would...

Set the negotiable and non-negotiable terms. If possible, I would have a conversation with associates who’ve dealt with the particular person before me to gain some personality insights.

I walk away when…

The offer does not meet my expectations.

WHAT I HAVE LEARNT ABOUT NEGOTIATING…

1. To get the best deal, prepare well

The best negotiators are known for their ability to be a step ahead of the opponent. It helps to do one’s research well before getting on the negotiation table. While you should talk less and listen more, ensure that your questions and those from the other party are answered to everybody’s satisfaction

2. Don’t panic at surprises

Surprises in a negotiation are meant to make the other party panic and make poor decisions. The ones I have seen include adding new partners to a deal, moving agreed deadlines, defaulting on a promise, or creating unilateral ultimatums. To avoid such surprises, I make sure I am dealing with parties who are fully empowered to make the decision. I also like to have a realistic price target while putting myself into their shoes and anticipating their conditions and counteroffers.

3. Be professional

I try to keep the negotiations professional and courteous. Nobody really wants to do business with a difficult or abusive personality. After all, even after the negotiations are concluded, you may still need to do business with this person again.

**Daniel Ojijo, Founder and CEO Homes Universal.**

Never appear to be too eager or too excited

Daniel Ojijo, founder and CEO of Homes Universal

My best deal

I bought my first property 20 years ago for Sh400,000 that I sold a few months later for Sh 950,000. That was a sweet entry into the real estate sector.

The worst deal I ever made

It may look petty but I once bought a branded camera in China for about Sh200 but it never worked. That taught me that no matter how small a deal may look like, I should take time to thoroughly evaluate a product before making any commitment. Cheap, as they say, can be expensive.

WHAT I HAVE LEARNT ABOUT NEGOTIATING…

1. Go ready

Prepare a crisp presentation that will wow the client. Most clients make decisions within the first five minutes of a presentation. I would also take time to bond with client by adding one or two lines of humour. Remember that most people like to establish business relations with people who are interesting.

2. Be articulate

If you want to get the best deal in a negotiation, you must first understand the product or service you are buying or selling. The other party will easily accept your offer if you have good comprehension of the product. The more you know about the product the better you will be able to engage and sway the client to a good discount if you are buying or a good offer if you are the seller.

3. Lower offers for my services are frequent surprises

While this is frustrating, I never express my disappointment on low price offer. Instead, I talk about the quality and value of my product thus letting the customer feel the fee am charging is pegged on the value and quality as opposed to mere pricing.

4. Don’t look too excited

Before the negotiations, I try to go over my strategy at least twice to ensure there are no gaps. Then I try to be as calm as possible. Panic or over eagerness can show on your face.

While on the negotiating table to either buy or sell, never appear to be too eager or too excited with the product. Stay calm and controlled as sellers usually push prices on basis of your emotions. In addition, never be in a hurry to take the first offer that comes.

There is always a better deal. Be kind and tell the other party that you will think over it or you the need for further consultations. As negotiations drag, the other party might call with further discounts.