be all ears. talk less. listen more.
by ed mendlowitz
call me before you do anything: the art of accounting
a client wanted to buy a business in birmingham, ala., and i went there with the company’s cfo to review the books, do some due diligence, kick the tires and negotiate a deal.
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the business was on the cusp of super success, but they ran out of money and my client was going to buy the company, provide working capital and retain the owner to run the business.
the business was very capital-intensive, with humongous equipment that was purchased new and completely underutilized. the owner started the business in his garage and built it up to a good size and was in tears discussing the sale of his “baby.” our analysis indicated that the real issue was the lack of a sales force.
well, my client’s business was a sales organization with offices in 15 states. the cfo and i figured out that we could make a deal in which my client could become the exclusive sales organization, and the owner could keep his baby.
the amount of capital needed was minimal because the sales force was already in place and this would have been an added product. further my client did not have to get involved at all in the production process other than to make sure delivery schedules were met. the “partnership” was a successful collaboration between the two organizations for many years.
the takeaway here is that there is more than one way to get a deal done. when negotiating, it is important to understand the dynamics of what each side wants and why they want to do it. that requires asking a lot of questions and then listening.
the more you talk, the less you will find out.
once you know all the reasons, solutions usually present themselves pretty easily. in this case, the solution became evident once we had all the input and were able to get to the core of the matter.