In my recent experience, I have found that too many people lack creative ideas for making a deal that appeals to both sides. I had a pretty unique smartphone app that I really believed was going to fill a niche. As I spoke to potential buyers, each one started with a different method that left me wondering if anyone had an honest approach to negotiations.
Why did each person believe that I had something I wanted to give away to the lowest bidder?
In this second conversation with Ben Larson, I came to admire Ben’s ability to listen to my story of why the sale of my app mattered so much to me.
Listen in as we explore Ben’s thought process when he is putting together deals.
ANDREW: Since we started talking, I have been asking myself why this seems so different than the approach most people take. Why is that Ben?
BEN: My highest priority is for my Firm to have a reputation for positioning ourselves for future deals. Every conversation has multiple people involved. Without anticipation for future deals, each person views this one deal as the last chance and will attempt to grab for too much from a single deal. I hold each deal loosely and remain willing to walk away at any point. There are so many deals out there, that I just don’t have to worry about each one.
Listening to the person who has something I want is the most important aspect of the deal. Maybe I won’t be able to make the deal, but I have enough information to find someone who can provide what that person is seeking.
I know what happens when I feel that someone is trying to take what I have. That causes me to react instead of responding with creativity and offer more than just money to the other party.
ANDREW: When I started to look for a buyer for my app, I had many experiences that left me wondering if anyone actually cared about the potential of the app in many different applications. Ben, you seemed to see what I saw. What made you want to make this deal?
BEN: Without revealing all of my secrets, I can tell you that starting with questions about what the other person wants is the basis for all of my conversations. I have something to work with if the other person will reveal what matters most in the deal. The intangible details of each deal will matter more than the money.
That statement might surprise you, but remember I am looking at future deals and not just this one. We can boil down all of the intangibles into ‘trust.’ I have to build enough trust with the other party for him to stay in the negotiation process. Without trust, no one will even answer the phone to continue the conversation.
ANDREW: You purchased my smartphone app, what other ways do you expand your Firm?
BEN: Deals come in some many forms that it would take days to describe how I can identify ways to expand the Firm. Here are just a few ideas:
- Skills – When the Firm has work to complete, we will find the best experts to do the work. Instead of hiring employees, we outsource some of our work to trusted specialists who can deliver exactly what we need in a timely manner.
- Capabilities – Our clients have specialized requests for services that we can access through one of our alliances. Superior service is the hallmark of everyone who joins our efforts to bring out significant changes for our clients. Without our strategic alliances, we could never offer custom solutions to every client.
- Clients – Consulting for businesses is our specialty. Turning around a business is more rewarding than you can imagine. Business follows certain practices that bring about growth. We simply teach business owners those principles and watch them thrive.
- Ownership – At times, the best way to expand is to assume partial ownership of a business. This is more rare than you might imagine. As a silent partner, the Firm would be paid if that business is sold. Again, this approach is a long-term investment in a growing business.
Each deal follows the same negotiation process of finding out what the other party wants. Our Firm has specific needs as well. Putting Together Deals is easier when everyone knows what is needed.
ANDREW: You make it sound so easy to put together deals that make everyone happy. Why do I get the feeling that there is a secret sauce in here somewhere?
BEN: Creativity is my secret sauce. Anyone who believes that the only ‘legal tender’ is cash will miss out on countless deals. The master deal makers will prepare an entire list of what is wanted and what is available for trade. Knowing what you have to offer before meeting with the other party can be very helpful when you step to the negotiating table. Part of my preparation is to explore any possible combination of benefits to the other party.
Even with our prospects, I want to consider all of the possibilities for the current deal and future deals. Limiting my offer conveys that I want to take advantage instead of building an irresistible offer that makes the client want to work with us the next time.
Balance in the deal is essential because both parties must trust that there are advantages for me. Creative ideas will spark openness between the parties and more information comes to the surface during the conversations. I have received so much more in deals when I offer unexpected components to the other party. Again, my objective is to work multiple deals in the future.
ANDREW: As we bring this conversation to a close, I am struck by your ability to share so much without concern for what others could do with this information.
BEN: I don’t really believe that anything I have shared is all that revolutionary. How I use each of the aspects of my approach to deals allows me to connect with people and assemble something really amazing. My starting point is probably the most important factor in discovering what matters most to the other party and taking steps from there.
An abundance of deals allows me to hold all of this very loosely. I will never be caught with only one deal on the table at a time. In every part of life, if we have dozens of options, we approach life and people differently. Everyone can sense desperation. No one wants to be the lifesaver to the person who has no other options.
I will continue to put together deals that benefit our Firm, partners, clients and alliances as long as there are businesses out there. Our reach will continue to expand as we find great opportunities.