This has been by far the most interesting read. The reading simply gave 2 approaches negotiate or don’t negotiate. I feel I can be a debater by nature, so I enjoy negotiations whether professionally or personally such as purchasing cars and my home. It was kind of hard for me to believe that investors willingly give others the right to negotiate on their behalf. However I did like the “take a pass” concept. This approach of communicating positive feeling to an entrepreneur such as reassuring them that their product is good all the while letting them know you are not interested seemed comforting from a entrepreneur standpoint.
I would like an active role in any investment I make therefore it is imperative that I do negotiate. The author gives several tips on how to negotiate. A few are outlined below.
“Start from a position on perceived or real strength”
I can not say that I have reached the status of having “big wings” but I have encountered quite a few investors that do. One of my younger sisters models part time. When looking for investors for her next big shoot my sister tends to go after high profile photographers or producers some that have even modeled in the past. She feels that not only is she getting an investment towards her shoot but she feel like having a prominent name connected to her can increase her exposure.
“Get to it”
Meaning shorten the negotiation process. As I mentioned previously, I have negotiated when purchasing vehicles. Every time that I have bought a car I go in during a weekday evening. I always let them know that I don’t have much time in my busy schedule and I would need to purchase a car that very night. I have seen very relieved looks on salesmen faces excited for potential deals and knowing that their finance counterpart will want them to close the deal just as quick as I did due to limited time.
This tip, is one admittedly that I struggle with. Sometimes I feel an investment is over valued but when you try to low ball an entrepreneur with unreasonable terms it can damage the relationship and ultimately leads to a bad return on investment.
“Wait until the second time around”
I remember I did this with a college scholarship pageant. An organization wanted to put on a pageant. I had participated in a cotillion so I had some idea of the nuances of a pageant. However this being a fairly new service organization with little experience throwing any event much less a pageant, I had my reservations on being a sponsor. I instead offered a small donation and took the role as an adviser for the pageant. This was a way I was able to see the processes up close. The pageant was a success and the following year I invested.
2 Replies to “Negotiation”
That is very cool that your sister models and she does that! It’s like she’s running her own business, which essentially, she is! I do not like to debate, I feel incredibly awkward when doing so, and I am afraid of insulting or ruining my relationship with the other person. I sell my clothes on Poshmark and buy some as well and there is an “offer” button, which you can submit the price you’re willing to pay for it, and the seller can then “counter” or “accept” your offer. This is about the most negotiating I have done, and I thought of this while reading this chapter, because using the phone to negotiate is similar to an investor having someone else negotiate for them. It’s a barrier between each person’s emotions and not being able to see the reactions, which is a huge part in negotiating.
I agree with you on this being the better read and most interesting take on to either negotiate or not. Before reading this book I would never have thought that was even an option. I also agree with Hailee that the relationship and being able to feel/see the emotional toll, cost is very important.
Well done this week