Do you remember the television show Deal or No Deal? You know the one hosted by Howie Mandel and on which now Duchess of Sussex, Meghan Markle, was a briefcase model. The premise was a contestant would choose a numbered briefcase and then have to decide whether the sum offered by the game show was worth more than the value inside that case. The participant would be able to keep asking for additional briefcases to be opened and would receive new offers. If they accepted any offer, the amount in the briefcase would be forfeited.
Viewers at home could guess how this would go. They could yell from the safety of the couch for them to take the big number offered early on rather than risk settling for a lower amount at the end of the game or to go for it but they had no more information than the contestant. In the moment under the pressure, not many contestants had clarity about the deal they would accept or knew their true bottom line.
In my law practice, I answer the same questions for my clients, “How do I know I am getting a good deal?” or “How can I get the best deal?” and “How do I know my bottom line?” I remind them to go back to the basics. Ask yourself the following questions before you start negotiating a deal:
What is my purpose? Why are you in this room making this deal with these people? If it’s just a means to an end, you may not be in the best position for a positive deal. If your purpose is to sell your company, dig a little deeper to find out why you want to sell. Get 100% clear on your why.
What is my desired outcome? Once you have established your purpose, you can spend some time defining your desired outcome. What are the main goals you hope to accomplish in this deal? How will this deal change your circumstances for the better? What, specifically, do you want to achieve?
What is the least I am willing to accept? You have a number in mind that you would be thrilled to get. If that number is realistic and appropriate for what you have to offer, great. Often your ideal number is at the top of, or above, market values. If that number does not make sense with the value you are providing in the deal, then you will, likely, have to accept less. It is crucial, therefore, to ask yourself: What is the lowest number that I would be content accepting? When you reach a number and know that not a penny less and you would still take the deal, then you have found your true bottom line.
Do I mean literally not a penny less? YES, I DO! People say come on, Corey, are you telling me that if I got everything else that was important to me in the negotiation and instead of getting for, example, the $1 million for my business that I said was my bottom line, I am offered $999,999.99, I should turn it down? YES, YOU SHOULD or else $1 million was not your true bottom line. Why should you turn it down? Because what if its $999,999.98 or $999,999.97 or . . . . You can keep going a penny less until you reach $0. So, if you do not to get crystal clear and commit to a true bottom line/not a penny less number then you have no ground to stand on, no way to evaluate what is and is not acceptable except by emotion – which never supports authentic negotiating success.
What is your bottom line? If you want a hand preparing for your next deal, I have a best-selling book on Authentic Negotiating and consult and train people on negotiating regularly. In addition to that, I negotiate for clients in my law practice pretty much every day.