Business transactions can involve various issues, including contracts for purchasing and selling property, products, supplies, services, and, in some cases, the business itself. Most business transactions are relatively simple, but some involve negotiations. For example, a business offers a service at a certain price. Your business only has a few options. First, you can accept the price offered and pay it. Second, you can reject the price offered and look elsewhere for a different, presumably lower, price. Finally, you can negotiate and ask the other business for a lower price after looking at competitors’ prices, which the other business may or may not agree to provide you. It is this last scenario where the art of negotiation comes into play. Negotiations can benefit you as a business owner in ensuring you get the best price for the services, products, or other items you receive.
Issues to Consider in Negotiations
Before you begin negotiating a business contract, you should consider various issues. Thinking about these issues can better prepare you for the negotiations and put you in a better position to resolve your business transaction effectively and successfully.
First, consider your overall goals and objectives. Are you looking for the best services at the lowest price, or just the lowest price possible? What about this transaction is most important to you? What terms of the transaction are non-negotiable? What terms of the transaction are less important to you?
Next, what is your bottom line? How far will you go to settle this transaction? How far is too far? At what point will you walk away from negotiations? You don’t want to compromise so much during negotiations that you will regret your agreement. You will be bound by your agreement, even if you felt rushed or pressured to make that decision during negotiations.
Evaluate the other party’s position and goals. What about this transaction is likely to be most important to them? What will their response be to your negotiating points? How can you counter those points?
You should also ask yourself what issues in these negotiations are in your favor and what are in the other party’s favor. If certain facts favor your position, you must capitalize on them, use them to your advantage, and maximize that momentum to achieve the best possible results.
Questions to Ask in Negotiations
During a business transaction, negotiating parties may land at quite disparate prices. It may be useful to ask whether splitting the difference can resolve the matter in that situation. This simple-to-understand tactic shows that you are flexible and willing to concede your position to at least some degree to reach a deal. It also can lower tensions, keep negotiations ongoing, and increase the chance of the parties entering an agreement.
You might also ask what the other party is looking for in terms of justifying their asking price. A party’s needs do not always easily or neatly translate into dollars and cents. If you understand what a party needs, you can accommodate their needs in your offer or get a better understanding of their position. Either way, this understanding can go a long way toward improving negotiations and reaching an agreement.
Ask whether bringing in a professional third party might enhance the negotiations. Some business owners like to negotiate their own business transactions. However, in the case of a particularly large or complex business deal, it may make sense for a third-party professional to get involved in the negotiations. Another situation in which a third party might be necessary is when the transaction will likely evoke strong emotions for one or both parties. For example, selling the family business out of necessity may be difficult to negotiate, not because of any need for a certain amount of money, but because it is hard to let go of something your family has owned for decades. A third party can be more detached from the situation and offer more objective views that can lead to more productive negotiations and an eventual settlement.
Look to Kramer Green for Advice about Your Business Transactions
An Aventura business transactions lawyer at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can assist you with all aspects of your business transactions, including negotiations. We know how to structure your transactions to protect your interests and meet your needs. We have the skills and experience to help you achieve your business goals.
Our objective is to guide you through your most complex business transactions with a minimum of effort on your part. Contact our office today at (954) 966-2112 or online to schedule a time to discuss your business transactions with our Pembroke Pines business transactions attorney.