Actually this article is not about my first large money deal, rather it is about a current one I’m involved in with two Entrepreneurs who have never asked or charged more than $1MM for a deal or sale.
One of my new ventures is with two Entrepreneurs who are older than I, have participated in their own ventures as partners for many years; however, never seemed to get to the next level. The next level means evolving out of their comfort zone into a larger income stream or into many income streams.
In starting out this venture I mentioned to one of them what could be built along the lines of the service they were going to sell to a multi-billion dollar corporation. The system is exactly what this corporation wants and I had been involved with almost the exact thing in the past. Of course, I had to begin planting the seeds.
As an Entrepreneur Mentor I have learned that planting the seeds and waiting for the right idea or epiphany to sprout in my Apprentice(s) is the most successful tactic whether they are willing to listen or not. In this case, a $1.5MM deal is on the line.
Many people think all they need to know to make a large deal happen is what the other party (across the negotiating table) wants or thinks. While this can be helpful, most people are not mind readers; therefore, very unlikely to know exactly what the other party thinks. There are two main elements to consider on large $$ deals:
When the two above elements are not known or not well understood you can kiss the big deal goodbye. Most new Entrepreneurs actually negotiate down their price before sitting at the negotiation table. Statements like, “I just don’t see XYZ Inc. paying $2MM for our services†end the deal before it has begun. What you should be saying is, “How do we get XYZ Inc. to pay us $2MM for our service?â€
The later statement allows for no defeat, especially before you have even begun to sit at the negotiation table.
Why is it more important to know what the client wants and not what they think?
Your large money client has put out what they want in order for you or others to provide it in a way they desire. Many mistakes are made when Entrepreneurs think they know what the other party thinks. Like I said before, mind reading is a rare existing skill or talent (if it exists at all). A proverb once said to me goes like this, “Don’t put your mind in the market because it will get stepped on.†This really means; you have no idea what people think and if you think you do, you will make bad mistakes. XYZ Inc. has put out what they want so they can get it. Your job is to give them what they want in a better way than competitors. If you want a tip/trick to rigging the bet, ask one of the requesting party of XYZ Inc. to describe the best time he/she had making a deal for the company.
Back to negotiating yourself out of your first large money deal… Don’t think you know what XYZ Inc. will be willing to pay, just figure out what they will pay $2MM for in regards to your offerings/industry then provide with 5 star service. Congratulations on your first big money deal!
One of my new ventures is with two Entrepreneurs who are older than I, have participated in their own ventures as partners for many years; however, never seemed to get to the next level. The next level means evolving out of their comfort zone into a larger income stream or into many income streams.
In starting out this venture I mentioned to one of them what could be built along the lines of the service they were going to sell to a multi-billion dollar corporation. The system is exactly what this corporation wants and I had been involved with almost the exact thing in the past. Of course, I had to begin planting the seeds.
As an Entrepreneur Mentor I have learned that planting the seeds and waiting for the right idea or epiphany to sprout in my Apprentice(s) is the most successful tactic whether they are willing to listen or not. In this case, a $1.5MM deal is on the line.
Many people think all they need to know to make a large deal happen is what the other party (across the negotiating table) wants or thinks. While this can be helpful, most people are not mind readers; therefore, very unlikely to know exactly what the other party thinks. There are two main elements to consider on large $$ deals:
- You must find out what your prospective client wants. This is usually very easy because they want you to know what they want too. Once you have realized the desire of your prospective client (big money corporation), you need to put in place the capabilities to provide it.
- You must realize that nothing is impossible; rather you need to find out what is necessary to make the deal happen for your price. This is very key to large deals! Companies and their executives who are used to making large purchases or spending millions won’t normally (if ever) make deals or spend such large amounts if the receiving end lacks in any kind of confidence. Not sticking to your guns (price) before the negotiating table shows severe lack in confidence.
When the two above elements are not known or not well understood you can kiss the big deal goodbye. Most new Entrepreneurs actually negotiate down their price before sitting at the negotiation table. Statements like, “I just don’t see XYZ Inc. paying $2MM for our services†end the deal before it has begun. What you should be saying is, “How do we get XYZ Inc. to pay us $2MM for our service?â€
The later statement allows for no defeat, especially before you have even begun to sit at the negotiation table.
Why is it more important to know what the client wants and not what they think?
Your large money client has put out what they want in order for you or others to provide it in a way they desire. Many mistakes are made when Entrepreneurs think they know what the other party thinks. Like I said before, mind reading is a rare existing skill or talent (if it exists at all). A proverb once said to me goes like this, “Don’t put your mind in the market because it will get stepped on.†This really means; you have no idea what people think and if you think you do, you will make bad mistakes. XYZ Inc. has put out what they want so they can get it. Your job is to give them what they want in a better way than competitors. If you want a tip/trick to rigging the bet, ask one of the requesting party of XYZ Inc. to describe the best time he/she had making a deal for the company.
Back to negotiating yourself out of your first large money deal… Don’t think you know what XYZ Inc. will be willing to pay, just figure out what they will pay $2MM for in regards to your offerings/industry then provide with 5 star service. Congratulations on your first big money deal!
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