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How to Negotiate in a Business Acquisition or Merger

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When one business acquires or merges with another, a negotiation must first take place. Both parties involved are seeking the most beneficial situation for themselves. If you and the other party are so diametrically opposed, then, how can you ensure that you get as much benefit from the deal as possible without souring it entirely? Perhaps a bit of negotiation training is in order. Let’s take a quick look at some of the most important steps to keep in mind as you proceed with the negotiation.

Preparation and Research

Anyone with even the most cursory corporate sales training can tell you that a negotiation begins long before the two entities involved meet to discuss terms. If you don’t know where the other party is coming from, or even where you are coming from, then your position is already weak. What price point does the other party expect? What price point are you hoping for? What is your walk-away price? Why is either party interested in this merger or acquisition in the first place? What concessions are you willing to make to ensure the deal goes through? Once you have answered the important questions like these, then it’s time to begin negotiations.

As you go into negotiations, there are several strategies to keep in mind:

  1. It’s okay to make the first offer—in fact, it’s often advisable

When beginning a negotiation, many people are afraid to make the first offer. If the offer is too far in one direction, they risk not getting the full potential value out of the deal; too far in the other direction, and there’s a risk that the other party may just walk away. Several studies have shown, however, that the first price laid out becomes a sort of anchor to which all subsequent offers are tied. This is especially true if you have done your research and are very precise when you name your price. If you have more information than the other party, then you can find that sweet spot with your first offer and place yourself in a favorable position for the rest of the negotiation. It’s important to note that it is not always advisable to make the first offer. Try to avoid making the first offer if you find yourself in a situation where you are less prepared or unsure of the market.         

  1. Remember that there is more to the negotiation than price

 Price is very important when negotiating an acquisition or merger, but it’s not the only factor to take into account. The terms of the deal are vital as well. Are there protections in place for the buyer if major problems come up within a certain time of the transaction? In the case of a merger, how much control will be granted to each party? Will members of the current team remain in place, or will the old guard step down? Keep an eye out for what the other side wants to get out of this negotiation, as they may be willing to make other concessions in order to achieve that goal.

  1. Use concessions wisely

Deepak Malhotra, a professor at the Harvard Business School, notes that “Concessions are often necessary in negotiation. But . . . they often go unappreciated and unreciprocated.” If concessions are made too early, they can seem like a ploy or even go entirely unrecognized. He recommends four strategies to make certain others will acknowledge them and give their own concessions in return.

  1. Label concessions. Don’t assume that they will speak for themselves, as the other party will be motivated to overlook, ignore, or downplay them in order to avoid a need to reciprocate. Lay out the concession directly, show the costs to you, the benefits to the other side, and use it to legitimize your original offer. Use that original offer as a reference point to show exactly how much you have willingly given up.
  2. Demand and define reciprocity. While sometimes the other party will be slow to reciprocate, you can explicitly demand it. (While remaining diplomatic, of course.)
  3. Make contingent concessions. You may be willing to bend in certain areas, but only if certain conditions are met. Statements such as “We can’t budge on price under these conditions, but if you can adjust some of these requirements, we might be able to revisit price later.” Just remember to be sparing on contingent concessions, as too much reliance on them makes it more difficult to build trust, making you seem less like you are trying to find a mutually beneficial deal and more like you are simply in it for yourself.
  4. Make concessions in installments. The majority of people report that they would be happier to find two separate $10 bills on consecutive days than to find a single $20 bill once. If, over the course of the negotiation, you are willing to change your offer by a maximum of $40,000, it is more effective to offer $30,000 followed by a second swing of $10,000. While people prefer to receive bad news in one giant dump, they prefer positive news in installments to prolong that positive feeling, making them more amenable. Even though the two final offers are identical, one feels more favorable than the other.

Generally, when making concessions remember to move slowly, with pain, and small increments, while ensuring you get something in return.

While negotiation might feel like it requires years of influence training to be truly effective, in the end, it really boils down to a matter of knowing your counterpart, figuring out what they want most, knowing what you want, and determining what you are willing to give up to acquire it. If you enter the negotiation prepared, work for a genuine compromise, and stick to your guns on the issues that matter to you, then both parties can eventually hammer out a favorable deal that benefits each side.

How to Invite Employees to Integrate Your Vision

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Onboarding can be an overwhelming time for new employees, but integration should happen as early as possible – without sacrificing the employee’s individuality. There are a huge number of personality types that get hired into the workplace, so there is no one-size-fits-all technique for inviting employees into the culture. There are, however, certain steps employers can take to ensure their company’s visions are upheld by both existing and new employees.

Be Clear About the Company’s Culture

Unless your company is forthright and precise with its descriptions of itself and its culture, employees will have no way of knowing where they should fit or, for that matter, what they are working to fit into.

Arm yourself with a variety of materials that detail what your organization stands for. Some helpful things to include in your onboarding process are an in-depth company history, the central tenets of the business, and a detailed code of conduct and dress. Dress codes are particularly important when communicating expectations. A relaxed dress code can denote a more laid back and open-minded organization, while strictly professional guidelines communicate that the culture is highly focused on professionalism.

Schedule Personal Time With Employees

New hires and existing employees both benefit from some personal face to face interaction with their supervisors. By sure to schedule coffee trips, lunches, and in-office chats with employees on a regular basis to keep your finger on the pulse of their experience. This personal time allows management to assess how the employees are fitting into and embodying the culture of their organization, and can be a great tool in assessing and addressing issues which may arise or have arisen.

Ensure Management Is Leading By Example

Employees often look to their supervisors or managers for cues on acceptable behavior. Therefore, it is essential that the managerial staff hold themselves to the highest standards when it comes to embodying company culture. If your establishment is a suit-and-tie organization, for instance, and one partner regularly arrives in a sweater and jeans, employees will see this as a sign that the culture isn’t entirely applicable. This will create a weakness within the organization and potentially lead to confusion for new hires.

Facilitate a culture in line with the organization’s values. This is one of the best ways to encourage your company to grow in the directions you would like it to. When taking on new hires or coaching existing employees, keep the heart of your organization in mind.

The Providence of Overcoming Obstacles

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Almost every type of job needs effective problem solvers at the helm. Expert strategists are more independent, think critically, and are less likely to make mistakes once they have become accustomed to their role. A few traits great problem-solvers share include the following.

Seeing Problems as Growth Opportunities

Some of the best problem solvers are the people who keep a positive attitude. In difficult situations, this often manifests itself as a willingness to see the potential benefits of a problem which has arisen.

Those who see a difficult situation or time as a growth opportunity are not only better equipped to handle the crisis (as they are not bogged down by its gravity), they are people who use each situation to better prepare themselves for the next. People who think this way continually improve themselves as problem solvers and employees.

Working With Others to Tackle the Issue

Those who are willing to use every resource available to correct a situation are often the most successful in finding a solution. Many times, if a problem arises within a company, employees may be inclined to address it on their own. This can be due to a desire for credit or a lack of faith in their co-workers or organization.

Neither of these traits, however, are positive in the long run. Yes, it is nice to have a star employee. It is far better, however, to have a team consisting of solid people who rely on each other for the benefit of the organization. When assessing a problem, it is best to realize that though you may be perfectly competent, there is always someone whose expertise outshines your own in one area or another. Tapping into those resources is a sign of intelligence and strength.

Defining the Problem in a Clear and Reasonable Way

People who see a problem as an insurmountable obstacle or an excuse to generate gossip are rarely proactive about fixing the issue. Therefore, when confronted with a problem, the best course of action is always to view it in a logical and reasonable way. Maybe it shouldn’t have happened in the first place. Maybe someone dropped the ball. Focusing on things of that nature, though, only grows the issue. Great problem solvers can recognize a situation for what it is and keep their emotions out of the way while addressing it.

When looking at potential candidates for a position, analyze and question them on some of the most difficult problems they’ve faced professionally. If they mention working with others in the organization, remain calm and collected, and are willing to admit they

5 Little Tips to Perfecting Your Sales Approach

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The sales profession is one of the oldest and most prolific out there. Selling products can be fulfilling and enjoyable, but finding the right sales approach is often a challenge. The wrong sales approach can ruin negotiations and keep you from getting what you need from a deal. If you need to improve your sales approach, several easy, proven tips exist.

Determine Your Audience 

What do you do best? Who needs what you do or sell? How will they use it and benefit from it? Experts agree that asking questions like these can be extremely helpful even before you’ve found one client or customer. Perhaps you are a fiction writer but you don’t know who your audience is yet. Think about the genres you like best or the characters you most often create and the story arcs they experience. Then ask yourself who is likely to read that type of story. Who can relate to these characters and why? Are there books on the market similar to yours? Answering such questions will make it easier to sell your product and create a marketing vision when a publisher asks for one.

Set Measurable Goals 

Almost everyone knows about goal-setting, but most people don’t do it correctly. They set goals like “I’m going to sell more products this year” or “I’m going to increase my productivity by 10%.” These are good starting points but they aren’t real goals. Goals should be broken down into manageable steps. Instead of saying, “I will sell more products by March,” write down how much you want to sell per month. Outline the steps that will get you there, such as the ads you will write and the social media accounts you will use. Plan how you will obtain and use customer feedback.

Use Time Wisely 

Time management is a huge obstacle for many people in sales and negotiation. We often think we have more time than we do, so we procrastinate on important matters. Examine your activities each day. Which ones need to be done immediately? Which ones can wait and for how long? What tasks are easiest and most difficult? Break your activities down using a system that works for you, and stick to it.

Listen to Customers 

Even the best listeners need help maintaining their skills. Most of us get so excited about sales or negotiations that we don’t actively listen to customers’ reactions. Ask for feedback often and utilize it. Perhaps you own a sporting goods store, and your sales are down because customers find your merchandise boring or outdated. Then listen to what the customers tell you. You’ll often find they are looking for an experience alongside the product.

Learn Strengths and Weaknesses 

Every salesperson has a special set of strengths and weaknesses. These can come from his or her personality, past experiences, and many other factors. If you don’t know what yours are, you might be inadvertently turning customers off. You can learn your strengths and weaknesses, and how to capitalize on them, through corporate sales training, conferences, and other venues.