It's easy to blow it in the heat of closing a big deal. These highly successful entrepreneurs—and members of The Oracles—share how to make your negotiations smoother, more profitable, and how to get that handshake and signature on the dotted line.
1. Prospect, build a pipeline, and be omnipresent.
I've been fortunate to close significant deals in my career. Some launched businesses, while others transformed good businesses into great. In my experience, there are four steps to emphasize:
One, list the big-deal companies or players you want to work with. Know their pain points and what matters most. Create content that demonstrates how you will solve their problems faster, with higher service levels for less cost. Knowing the revenue value of one deal makes it easier to reverse engineer what to spend on your prospects annually.
Two, build a pipeline to nurture opportunities. Take every meeting. Accept lesser-paying work to demonstrate how you create value. It doesn’t always work out, but big-deal decision makers eventually take notice. You'll make contacts and form relationships—that's half the battle. And always ask for testimonials!
Three, do something big every year to stay at the forefront of your prospects’ minds. While grinding on your everyday business, stay abreast of significant opportunities with those dream clients. (I use Contractually.)
Finally, become recognized as an industry authority and push those wins on social media. It can be big or small, like writing an acclaimed white paper or winning a local business award. Stack up the awards that recognize your team and product. Bottom line: big companies that do huge deals want to work with winners.
2. Communicate clearly, confidently, and positively.
When closing a deal of any size, communicate clearly and confidently. Otherwise, people won’t trust you. (I practiced using recorders and video for years to ensure my communication came across the way I intended.)
“Where there is a will, there is a way.” I always believe that we can come to an agreement, no matter what the buyer or those around me say. The mindset of knowing you will reach an agreement requires you to eliminate all negativity from your environment like negativity is a lethal disease.
My priority is to always remain positive. No matter how the buyer responds, keep it light, always smile, and maintain a can-do attitude throughout the negotiations. When you succumb to negativity—yours or the buyer’s—there’s only one outcome: not good.
Practice smiling with everyone in every situation you encounter. Do this until you can argue, disagree, negotiate, overcome objections, and close—all with a smile.
3. Negotiate, don’t skimp, and take your time.
One of the things you have to understand is that school doesn’t prepare us for doing deals. Here are three tips I've learned:
One, if your initial offer is accepted, you probably didn't negotiate enough. Don't be upset if they don't accept your first offer—it's a bad sign if they do accept.
Two, the counterbalance—don't always look to get the best deal. The billionaire Warren Buffett says it's better to pay a fair price for something quality than dirt cheap for a piece of crap. Sometimes I've waited too long to negotiate different business deals and ended up with nothing. It's better to pay a little more to possess some real investments.
Three, make war with a multitude of counselors. I hire lawyers to spot things that I might miss. One of my first business partners said, "You wouldn't believe how many people sign anything without reading the fine print or addendums." Know what you're signing. Head outside, lay by the pool, read the contract in a relaxed way, and let some other people look over your shoulder.
4. Practice the art of the deal.
Big deals don’t come around very often; when they do, they take a lot of back-and-forth to create a mutually beneficial agreement. I follow these simple rules:
One, if your highest priority terms and conditions are not met, be willing to walk away. The deal only makes sense if you get what you want—otherwise, it may not contribute to your bottom line.
Two, be willing to compromise on your lower-priority terms and conditions. Once you get what you want, ensure that others get what they want. Sometimes you have to negotiate hard on an insignificant part of the deal to pretend that you care, and confuse the other side about what matters to you.
Finally, focus intensely on creating a win-win situation for everyone involved. If one single person is excluded from the win, sometimes they sabotage the deal. If everyone is somehow winning, the deal will eventually go through with a little persuasion.
5. Prioritize relationships.
As part of growing my previous company, MavenWire, I negotiated and closed six-, seven-, and eight-figure deals. Some were easy, closing in days; others were difficult, taking months. We always reached a mutually beneficial agreement that strengthened our relationship. This became especially important when negotiating MavenWire’s sale in 2016.
Here are the three things to remember:
One, getting what you want begins before the deal. Negotiating and signing a contract is a small part of the whole process. Enter into deals with people you have a relationship with, or create a situation to get to know them beforehand. This provides a foundation of trust and empathy to begin negotiations.
Two, all great deals are win-win. Start negotiations knowing what is truly important to the other party and you. This allows you to find leveraged wins, where you can give them something they value. This may cost you little or nothing; in some cases, it can even make you money. Don't know what's important to them? Ask. Don't know what’s important to you? Do your homework.
Three, you'll need to work as a team after the signing. So, care for the relationship throughout, no matter how difficult the negotiations. A strong relationship carries you all through tough times and influences your success. A contract is just a written understanding of the agreement; work with the right people and you’ll rarely, if ever, have to enforce it.
6. Remember, walking away can lead to even bigger deals.
I remember the head of Paramount Pictures was shocked when my company decided to walk away from Transformers 3. “Who would do that?,” he wondered. After all, each of these movies makes a billion dollars.
But, for me, the first two Transformers movies represented four years of my life. Money is great, but my time is more valuable than money. You can’t get time back, and we all have a limited amount of it here on Earth. So, I walked away, to the shock of everyone involved.
People are often afraid of saying no, fearing they might offend someone or miss an opportunity. But nothing makes someone trust you or want you more than saying "no.” People usually prefer a straight up "no," over a long, dragged-out “maybe.” And we’re inclined to want something that’s no longer available. Passing on Transformers 3 teed up different, very lucrative deals that were a better fit with the time I wanted to allocate. So be ready to say no, without fear.
—Roberto Orci, Hollywood super producer and screenwriter whose movies and TV shows have grossed over $5 billion worldwide
Want to share your insights like those above in a future column? If you’re an experienced entrepreneur, please get in touch here.
Want to suggest a future topic for these entrepreneurs to answer? Email firstname.lastname@example.org and it’s very possible we’ll make your suggestion the focus of a future article!
If you liked this, follow The Oracles on Medium.
Originally published on Entrepreneur.com. ©2017 by Entrepreneur Media, Inc. All rights reserved.