Podcast Episode 7 Transcription – Rem Oculee

Rem Oculee:

Welcome to the exit mindset podcast. I’m Rem Oculee. 15 years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up the wrong way, even though the company was profitable. So I spend years researching and studying exit strategies to improve my company’s valuation. I discovered that the same process that improves valuation would improve business profitability. And give me more free time. I’m here to show you what I have learned. You see the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way magic happens and you start seeing things you could not see before, but that’s not all. I also discovered the three principles that you must know to command a better price for your company. The three principles are first, the product, second infrastructure, and third, the conversation you have with the consumer. Once you master these three principles, you will be on your way to increasing your profits, your company valuation, and get more work life balance. So listen in and learn how you can do that. I will teach you through this podcast, blessings from the trenches, and we will have a dialogue with some of the greatest minds on the planet.

Do you ever find yourself stuck when you’re trying to deal with a business problem and you find the problems that you cannot persuade the other side to take your position. It happens every day. The essence of all that is called negotiations. Negotiations is all about persuasion and ability to convince the other side of your position and have them take action. Negotiations also involve a lot of compromise. And when I say that, I don’t say it lightly. Lots of times people think compromise something that they would have to give just to get something in a very sort of a casual way in negotiations. You have lot of sticky thorny issues that each side is actually entrenched in. Meaning that you’re not going to have one side is thinking, well, let me see if I get a little bit more from the other side, sometimes that does happen, but most of the time everybody wants something and they think their position is absolutely the right position.

And they’re very extreme about it. And the job of a negotiator, a good negotiator is to figure out what are those issues now? Can we unpack them and break them down? And how can you give some each side something that could be useful to them that could help them, but they would accept also the other side. It, because something else that they want as well badly, but they got to give it up in exchange for something that they want badly. And that’s why negotiations is an art, but also negotiation is something that could be learned in my book, the exit mindset. I talk about three things that determines the way your company would move and run and be valued. And that is the product, the infrastructure and the conversation in each one of those, believe it or not negotiations as it is an essential skill into what you need to do to operate not just on a daily, but on a long term level.

I’m going to tell you why. Let’s say we’re talking about the product right now. And your objective is to create a better product from a buyer’s perspective. The assumption here is that you’re trying to create a product that if a buyer of your company is to show up and say, I want to buy a company. They look at your product and say, that is definitely a good product in the marketplace that have distinction that has value to their consumer. And so if you are to look at the product and to create a better product, you have to literally negotiate with the people that you’re working with and people that are external to your organization. And I think there’s one misconception in business is that people think that you do not negotiate with the people you work with. And I disagree with that 100%. I think the idea is that you have to negotiate with everybody, including the people that work for you as well.

Negotiations is the essence of dealing with people. You got to always figure out what do they want, and then what do you want? And we can sell that. And lots of times a compromise. This has to come from you. If you’re running a company, of course, people that work for you are going to attempt to compromise, or they’re going to try and do the best to make sure that the objectives of the company are met because they know that, you know, but then to the day, you also got to be cognizant of what they’re looking to do and accomplish that way. You can give that and make sure that they are able to do their work. So negotiations, in many cases involve you asking questions, such as, you know, what is it that you’re looking to do? What is your objective? And then have to make a determination?

What are the things that you can give up in terms of what you’re looking to do and go from there. Now let’s talk about negotiations with external people, such as vendors, such as people that sell parts or they’re people that are doing work for you to create your product. Let’s say in this case, you’re going to have lot of people you got to talk to. And lots of times you have to negotiate your way to get the outcome that you’re looking for. So let’s talk about some examples of negotiations and I’m going to give you some tactic and strategies in negotiations with people. Let me give you an example. So, one of the biggest things you got to do in negotiations is try and talk in terms of the other party and not yourself. One of the biggest mistakes people make is they focus on themselves and what they want.

Then the other side, this could be very kind of productive. And I typically negotiate. I typically always ask the side as to what are they looking for? And I try and understand their position first, before I go into mine, into what I’m asking for, I find 90%, 99% of the time, actually that if I understand what they want, what I need from them, they’re going to be very easy. And they’re very receptive. There’s two dynamics that occur in this particular process. That first dynamic is that most people come in with attitude. I’m going to get what I can from the situation. I’m going to get the highest price I’m going to get the most of what I, what I’m looking to get from this. And what happens here is that everybody’s entrenched. And can you imagine two forces that are entrenched and everybody’s trying to get the most out of the situation.

And then it’s, it’s really dynamic is opposing rather than collaborative. But what if you take the initiative instead and you go at it and trying to find out what the other party wants and trying to understand, trying to actually understand what they want. It’s not just ask them, try to understand. So if they, if there’s certain pricing you’re looking for, from them, then ask them, what is the pricing that they want ask them? What is the reason they want that pricing? You can ask questions like that. How far are they willing to go with it? Sometimes the answer is, well, no, that’s all I can do. Tell them. I would ask, like under what circumstances would go lower. If again, if the pricing is not the perfect pricing for you, and you’re going to find that by understanding them, they will be more receptive to what you’re looking for.

So for example, if it’s a pricing issue and, but the other way pricing is one of the issues that it could be encountering. It could be along the lines of other things, such as you may want more deliverables from them. That for the pricing you’re getting, and sometimes that’s what you can do. Take a negotiating posture, such as asking them for more or less of what they’re offering to get the pricing you’re looking for. So all of these things are negotiating tacky. So for example, let’s say you want to serve a specific service and that service has thin components to them. It has a certain price and the price is X. You ask them, if you take one or two components out of the offering, how would that affect the pricing? You’d be surprised sometimes that they would set up pricing with drop down by certain amount.

And that I’m on might be exactly what you’re looking for in terms of not only in terms of the price itself, but maybe don’t need those other components. So by engaging the other side with a negotiating posture that is more looking towards the other side versus looking what you want. You’re going to discover that there are a lot of opportunities that you can uncover that would allow you to get what you want. And not just that, just as importantly, it gives the other side what they want because the other side will feel that they also got a fair shake out of it. And remember, ultimately, this is all about getting a fair shake. So let’s take that specific example. You looking for a service has got 10 components during the discussion you asked, what are those 10 components they explained to you say, okay, well, what if we take this component, that component from that, from the equation, what would the price be?

And they will tell you, that’s the price. Now you end up with what you want to end up with what they want. But if you go in there and say, well, I want, which is a typical, by the way, the typical way of doing it, I want that package. And I want, and the pricing is too much. I want less. And they say, no, that’s the pricing. And you get to an impasse. No, I want less. No, I, this is the price we have for it. And everybody walks away. I don’t think that helps anyone. I think they did not get what they want and you didn’t get what you want. They want to sell you something. You want to buy something other. It could work in reverse as well. I’m just illustrating a point where you’re buying something that you want. So by engaging in that proactive manner, by negotiating your way through it, by understanding what the other party wants from the transaction and how they can deliver it to you, whether you’re looking for you’re going to be able to accomplish a lot, the process of course could work in reverse.

So you’re offering something in the other side, doesn’t want it. So you assume a negotiating posture, and here’s how you do it. You ask them the questions, what they’re looking for. So it’s a reverse process of what they’re looking for at the beginning. You’re asking the other side what their, what their offering is and trying to break it down and maybe scale it to a level that you could be comfortable with the pricing let’s reverse it. And the other side is that you’re asking Dallas out as to what do they want from what you’re offering them. And they might tell you something that they want. And then you go ahead and subsequently adjust the pricing, maybe tool to a model that would fit what they’re looking for and they would be comfortable with. And now you’ve got what you want and they got what they want.

They’ll be lost anything. So if you notice it works both ways. Now the world of negotiations is as large as huge and a multiple ways. And you can get books written on this, but we’re going to go through a skim version of some of the tactics. And over the over time, we might have other podcasts. We’ll discuss some different strategies that you could use, but let’s talk about some of the, some of the negotiating principles. Some of them are, some of them will help you get what you want for the thing that you’re looking for. So one strategy could use, I call it the principle of rock bottom. What does that mean? So you’re negotiating with somebody on a, on a sort of pricing. Again, I don’t want to be hung up on pricing in here, because there are a lot of other things you can negotiate with people other than pricing, but that’s a typical thing that people can wrap their head around, which is pricing.

So somebody is asking you or offering you something, a service or product for a certain price. You negotiate. You think that you can get it for less. The typical is that, well, it’s too expensive. Can I get, you know, can I get it for the last one? No, you can’t on and on and on. And you can go down that direction, but I can make you a suggestion here. A strategy negotiating you are going to find to be very successful or useful. So instead of doing that, just ask the person one simple question, what is the absolute lowest price you would accept for that item? The absolute rock, bottom up price that you can go beyond that. And you’re going to find a lot of people are just going to look at you and go, well, I could go to so, so price and you’re going to find truly something.

Most of the time, that’s actually the bottom they can go to. They already know they could go down there and they can go any lower than that because it’d be beyond that. They’d be losing and they don’t, nobody wants to lose, but here they make a demo, the most amount of profit that they could at least make. If they sell you the product. So now you get the best price and they got to sell you something. Try it, just ask the simple question. What is the absolute lowest price you’re willing to accept and be silent? Don’t say anything else. Remember if you speak, you lose sweet. I’ve had, by the way, in negotiations, sometimes you’re going to find that there’s silence in the, in the process. And you’re going to learn how to do that. You got to learn not to talk. So when he asks for something, don’t say anything, and I’ve seen negotiations, and I’ve personally been involved in negotiations where the silence was in minutes.

And each part is just looking at the other party and just waiting. And someone’s going to flinch and better not be you. So that’s one tactic you could use. So let’s talk about negotiating tactic that you could use to help you achieve an objective with somebody who is giving you a deadline that is to finish something that’s longer than you want it to be. So you want it to be shorter. So let’s say, they’re saying, we’ll finish it up in a week. You want in three days, and the way I’d go about it is that you propose to them that your higher authority, whether it’s your manager or your boss, is really neat, is asking you to finish this within three days. And that it’s a problem for you. If you don’t get it on time. And if you ask them for their help, simply ask them for their help.

You’re not doing anything. Could they do it on time? Because if you don’t, obviously they would there, wouldn’t be very happy with the result. You’re going to find lots of times, people will go out of their way and they will accept your proposition and help you because if they can, they will. Sometimes they’re going to say to you, well, I could do it in four days. And that’s when, if you wanted really three days and you really form on that one, you might start with two days and sometimes they’re going to work with you on say three days. So that’s just, these are just strategies that he could use. And I’m helping you here, understand what the dynamics are and these things. And there’s a lot of conversation we can have on that one together on this, on this subject. So of course, here’s an example of how each side gets something from that relationship.

And the other side does get this satisfaction, knowing that they gave you a product in an expedient manner and maybe in a better and a faster way. But at the end of the day, that’s a way to work with people and the exit mindset. You’re going to be dealing with a lot of people, whether it’s your product with your infrastructure, whether it’s your conversation, either way, you’re going to be needing a negotiating posture and negotiating skills to be able to achieve the results you’re looking for and get the best from people and help people achieve their best. So until then, I’m remarkably see you on the next podcast. Remember, Action is everything use it or lose it.

You’ve just listened to the exit mindset podcast with Rem Oculee. If you haven’t yet subscribed or followed, please do so in your favorite podcast, listening app or better yet, visit exit mindset.com to join the conversation, access to show notes and discover our bonus content. Lastly, we want to help as many business owners as possible. If you know anyone who could benefit from the information given in this podcast, please feel free to share it with them until next time.