This blog post was inspired by a recent engagement that saw great results simply because the client had the foresight to be early in hiring the Transition Point Law team allowing for extensive negotiation preparation.
As a former athlete, I often find myself leveraging sports analogies. And while negotiating is probably more art than sport, a baseball analogy just felt right. So tighten your metaphorical batting gloves and hopefully the analogy helps drive home what I believe to be the single most determinant factor in most of the negotiating work that we do for clients.
Simply put, if you have not been hitting the batting cage and taking reps, watching film to learn a pitcher’s tendencies and tells and having a coach watch and critique your swing, you are underprepared. And, if all you do is walk up to the plate come gameday and think you are going to get a hit, the data tells a different story. Great hitters, like great business negotiators, make it look easy. But behind every hit, every home run, is hours and hours of practice and some great instruction and coaching.
Our best outcomes occur when clients approach us early in their M&A processes and we have time to undergo extensive negotiation prep. Here is a sample outline of what that prep often looks like.
What is my best alternative if this negotiation fails? (often called “BATNA”)
What is the range of outcomes that I am willing to accept? What is my reservation value or least favorable outcome that I am willing to accept.
What non-price items are important to me? To them?
What do I know about the other party’s goals and intended outcome? Any insight into their reservation value?
Is time helpful or harmful to my intended outcome?
What levers and tools are available:
Beyond information preparation, it’s also important to frame out your negotiating strategy and stress test and practice the conversation with an outsider with significant negotiating experience.
What types of questions can I ask in the process to learn more about my counterparty’s desires and goals? What tactics can I use to eliminate the assumptions I have made about their position?
Success in major negotiations can serve as critical transition points in the trajectory of businesses, or in the trajectory of your personal bank account in the case of a sale. So before you step into that batters box, make sure you have put in the work.
The Transition Point Law team is full of master negotiators. We have helped many clients prepare for what can often be the most important negotiation of their life. Our tried and true methods have proven successful time and time again. Reach out today to get a free consultation on how we may be able to support you in your next big negotiation.
Buy/Sell Transactions / Buyouts / Material Business Contract / Joint Ventures / Investment Transactions/ Executive Employment
