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The Key to Negotiations Is Willingness to Walk Away
By Dr. Ray Angelini
The Saratogian
August 29, 2002
Dear Dr. Ray,
I am in the process of purchasing a business and am struggling with coming to mutually acceptable terms with the seller. I really want this business, but I don't want to agree to terms I can't live with. What would you recommend?
— T.C. in Schuylerville
Dear T.C.,
Many people realize less than optimal results during business and other negotiations because they allow themselves to be dominated by fear. In order to optimize your success in any negotiation, you must always be ready and willing to walk away. This doesn't necessarily mean that you actually walk away, only that you are comfortable doing so. The key is not being too attached to any particular outcome.
This attitude applies in almost all business situations. Let's say for example that the seller in your example is asking for $1,000,000 for the business. You believe, however that you should pay no more than $750,000. The current owner is stubborn, yet you really want the business and don't want to sabotage the deal.
Being attached to buying the business on the seller's terms can cost you a great deal of extra money. If you feel that it is your best interest to pay no more than $750,000, the wisest financial and emotional decision you can make would be to offer this amount, and be willing to walk away without any worry or regret.
This simple act of not worrying about the outcome will, more often than not, work to your advantage. The truth of the matter is, most people are worriers, and it is very likely that the person you are in negotiations with is one of them. Although there are some exceptions, the seller is unlikely to slam the door on the deal at this point. He or she can, of course, turn you down, but there is a definite downside to this approach, which is turning down a sure thing for a potential unknown.
A counteroffer is likely, and if the seller knows that you are willing to walk away, the counteroffer is likely to be much lower than if he senses your fear.
This is pretty basic stuff. The key to success in any negotiation is the absolute willingness to walk away with no regrets whatsoever. You can implement this approach with the utmost respect for individuals with which you are negotiating. There is never a need, and certainly never any advantage, to being aggressive or obnoxious.
All you need is a worry-free attitude. I encourage you to try this strategy in both your current and future negotiations. I have the utmost confidence that you will appreciate the results.
