over my career acquiring and scaling businesses foracquisition. com I've done a lot of deals I want to put the five most brutally effective tactics that I know in one video for you A lot of these things I didn't actually learn from books I learned them from mentors and actually seeing them do it and learning like in the streets in the real world Most itty bitty tactics like don't actually drive the needle But these five actually have gotten deals done and improve my situation or standing in the deal So let's dive in There's three contexts that you're going to use each of these skills with The first is with employees and this goes both ways If you're an employee trying to negotiate with an employer then that applies The second is going to be vendors Now this also applies if you're a vendor who's dealing with customers And then third you've got what I would consider partners This is when you do deals M&A things like that investment So these are kind of the three big vectors that all of this stuff applies to So if you're like I'm not sure if this will work for me you for sure even if you don't have a business you are an employee And if you are an employee and you don't want to use that you certainly have vendors that come to your house and do things for you Like this is the fruit of life You have to negotiate and you get what you negotiate not what you deserve That may sound not fair but it's also the truth Number one this is actually from a Harvard Business School thing that I learned from Chiron Cervata It's called BATNA Now I didn't know the fancy term for it but it means best alternative to a negotiated agreement So what does this really mean research has shown that having strong BATNA basically a strong alternative gives you significant leverage in negotiations Negotiations is all about leverage London Business School did a study and they found that negotiators who know their alternatives set higher aspirations So they ask for more They make more aggressive first offers and they negotiate ultimately better outcomes So your BATNA serves as almost like an anchor a counter anchor that you have in the back of your mind of what you're negotiating with It's kind of like a source of power It's a decision standard that you only accept deals that are better than your best alternative You can think about this in any setting So if you're with a girl and you know that you can only date tens If a seven comes along you're like "Well my alternative is a 10 so I'm only dealing with tens. " If someone says "Hey I'll be willing to buy all of your inventory for 10 bucks a piece.
" And somebody else comes along and says "I'll do it for nine. " Instead of just saying no you're like "I'll do it for$ 1050 or I'll do it for 11. " You can edge them up But if you know that it's not going to matter then it doesn't matter So I'll tell you something that recently happened I'm right now negotiating to buy a home It's something that Ila wants and it's aggressive We already have a home that we like a lot I really like the house we have My best alternative to buying this house is doing nothing and just enjoying the home that I already have They're in a terrible position because right now I know that they haven't had anyone else who's bid on the property because it's aggressively priced I'll put it that way It's them versus me and it's who wants it less The reason badness is so important you're like "Okay I get that How do I have a best alternative to a negotiated agreement?
" You win negotiations and I'm starting with this one because I think it it's all five of the or six ones that I'm going to show you are going to be so important but this one is probably the greatest source of psychological power And you do this before you sit down to the table Me going to look at these homes I know I don't have to buy the homes When I was selling Gym Launch and Prestige Labs I was like I can just keep the businesses and they'll just keep making me money I don't need to sell them And from negotiating for that position you only want to sell when you don't want to sell You want to buy when you don't want to buy because you have something else If you're looking for jobs as an employee you want to negotiate when you already have another offer So if you're going to your existing employer get another offer and then negotiate with that You can only do that so many times before you start losing goodwill So you have to make sure that you're balancing that well If you're dealing with a vendor then you're like "Okay I'm going to get multiple bids before I'm going to decide to work with you because these are what I'm considering. " You'll get so educated from actually negotiating four five six of these vendor agreements that you'll learn other terms that other people include that you can use which is a later strategy that I'll explain Getting multiple offers before you sit down increases your bet So for sure don't take the first offer because even if you have first offer within the negotiation with one guy but then you have that offer compared to all the other offers you're ultimately going to get to do the work On the vendor side it's reversed What's my best alternative what are my other customers if I've got 20 other customers I got people banging on the door It's a supply demand thing So I've got more demand for my services than I have supply And so if you don't want it don't worry I've got another customer behind you And so this is the leverage that we go back and forth in negotiations And then finally with partnerships the same idea How can I get multiple offers from people wanting to buy my business and to the same degree for me if I'm trying to buy a business then I want to not have to buy the business because I got other businesses I'm looking at So no matter what all of this is one before you sit down to the table Right now if you sit down and you need this deal and you have no other offers all the little tactics that you can try sure you can try to do it but the thing is that it's just trying to win at poker only on bluffing It's a bad position to be in I would rather have pocket aces If you have other offers there's two different ways of thinking about this So one is you can be overt about it and say "Listen this is the counter offer If you can beat the offer beat it If you can't no worries We don't need to waste time. " The other way is that you just have it in the back of your mind and then you just see what you can get Because the thing is somebody else is giving you a $10 offer If you say "Hey I've got a $10 offer maybe this person will just beat it by 1025.
" But if you have the confidence that you know you're going to sell the inventory no matter what for a profit shoot for 11 shoot for 12 shoot for 15 Like you can shoot way higher because you know your plan B is not bad And so when you show it they're just going to basically marginally edge it versus you having the confidence to basically swing big Real quick if you're a business owner and you are not growing as fast as you'd like I'd like to give you a free gift So my team and I put together the $100 million scaling roadmap which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it And so we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information it'll tell you where you're at and the most important part for you what to do for each of functions of the business across product marketing sales customer success recruiting IT human resources and finance And so no matter what you're struggling with someone else has already struggled with it and solved it And so I'd like to give you this thing absolutely free You can go to acquisition. com/roadmap plug in your business information And if you want us to actually help you deconstrain the business and you're trying to scale we'd love to help you out on the thank you page You can just book a call with my team and we will look at the business see if we can help and if we can we'll invite you out to Vegas and we'll do this in person live So if that's cool hit the link Otherwise enjoy the rest of the video Now the second is a big one and a lot of negotiation books and courses and stuff talk about this and people are like "Hey I'm not trying to anchor here. " It doesn't matter if you say "I'm not trying to anchor here.
" It's an anchor An anchor is the first number that is set in a negotiation If you're like "Hey what do you think you'd be willing to do this for? " And someone's like "Ah I was thinking I could maybe do it for $2,000. " That's now the anchor You want to get less than that and you were like "Shoot I was hoping for 500.
" Well something you should have said 500 first because now their 2,000s seem ridiculous There is a strategy called counter anchoring but it's typically not as effective as anchoring but it's the only move you have left Now the flip side is the reason a lot of people don't want to put the anchor out is because they don't want to short change If someone was going to say yes to 5,000 you put 2,000 out there you're like damn because whatever happens is if someone gives you a fast yes you're like "No I left so much money on the table. " So I'll give you a little pro tip that I've learned being on the other side of this If I have somebody who comes to me and says "Hey I'll do it for $2,000. " And I would have paid five and I say "Yeah $2,000 works.
" The next thing I do is I say "Hey and if you were curious of whether I would do it for 2500 I wouldn't have done it. " And the thing is that it puts them at ease that like you know what you wouldn't have done more And what happened is I bought a super expensive penthouse a few years ago And after I bought it the guy who sold it to me obviously a wealthy guy too He said "Hey we accepted your first offer and you're probably wondering if we would have done it for less. " He said "I wouldn't have sold it for a penny less.
" It felt so classy Maybe he would have sold it for penny less I have no idea But in the moment it actually like I was like okay it just made me feel a lot better So if you're in the reverse situation I would put someone at ease by just saying hey I wouldn't have done it for any less or I wouldn't have done it for anymore or whatever What's interesting is that Daniel Nobel's prize winner figured out that people give excessive weight to the initial information and make insufficient adjustments from that starting point It's a psychological bias Basically it's like you want to anchor as high as possible That's why I'm a big advocate of getting the gasp put the big number out there because it completely shifts the whole negotiation numbers to way way higher and the things people think in different increments and that's what we want to change If you say I'll do this work for $100,000 whatever you're in construction if someone was thinking 10 their increments now become the entirety of what they were willing to pay They're going to be like can you do it for 80 all of a sudden we're thinking in $20,000 increments As a side note you can also anchor increments So explain what that means I'll actually walk you through the house negotiation that I'm actively in right now The house was listed at 25 million Then they dropped it to 20 million because the markets changed and things like that Okay So now they're at 20 million So I made an offer for 15 million They countered and said we'll do it for$69 So big move on their part right they're moving aggressively They're trying to sell the house They moved a lot towards me because they're trying to get a deal done The natural thing that some people might think is okay they're at 17 you're at 15 Counter with 16 here So what I did is I countered with 15. 25 So they moved three million I moved up 250 grand Thing is that there's this idea of like movement If you make an offer I make an offer So if I say 15. 25 what am I indicating i'm not willing to move very much I'm going to out of reciprocity which we'll cover later I'm willing to move a little bit I'm going to make some counter offer but I'm not going to give a lot Then I can stack in other terms that make it more amarable for them My initial offer I had two other things I was like okay I can offer cash My first offer is not going to be cash I can also say hey it has furnishings in the house which are super expensive I don't want to have to deal with refernishing the house What I did was when I moved up to 15.
25 I sweetened the deal by making it all cash But then I also said I also want the $4 million of furniture that's in the house which is technically a worse second offer than my first offer But the thing is that I moved the number up and a lot of people are always way too fixated on the price and not enough on the terms One is we anchor with our original price and also in the increments that we move in And this was something that took me actually a while to figure out And so let me tell you a story about this one So one of my partners at my gym way back in the day I learned this from him He had to get this big custom front desk built So it had like multiple cutouts We had multiple sales people Big impressive thing You get a custom built The guy came out they built this whole thing He was like "Hey when we went to do like the final inspection we noticed that they had kind of like nicked a corner of it just from moving it around or whatever happened right it was a small nick but it was noticeable. " My partner goes to the guy and he says "Hey how much would it cost you to replace this? " And the guy of course because he doesn't want to rebuild the whole thing He's "Oh my god it would be a huge deal for us to have to like just this little thing We'd have to go back to the shop We have to do this stuff It would probably cost us $1,500 just to replace that.
" And he says "That sounds like a pretty good place to start it for a discount. " Nasty I was like "Oh I'm going to use that. " If there's ever someone who messes something up instead of saying "Hey what can you knock off the price?
" Ask them what the big inconvenience would be for them ascribe a price to it And then they have a hard time backing down from that cuz they just said that's how much it would cost them to fix it Then you should probably discount us by that much because that was the size of the mess up So you get them bidding for themselves and then you flip it So number three I learned this from a different mentor They call it misos but basically multiple equivalent simultaneous offers So what does that mean that means that I present offer A offer B and offer C Or just offer A and B It doesn't really matter You can have two offers You can have three offers and each of these have different prices and terms associated with them And so what happens is when you make multiple equivalent offers it's like embedding reciprocity It's like hey I'm trying to be reasonable I just want to figure out what works best for you because all three of these work for me but which one's better this is a way of actually teasing out what someone else's priorities are if they're not willing to tell you because a lot of times you want to hold your card close and not say "What are the things that are most valuable to you? " Now over time you build some trust you build some rapport and you will be able to share because ideally something that's important to you is not important to them and they give you this one and something that's born to them it's not born to you you give to them And that's fundamentally a good negotiation And one of the big things that I misunderstood in the beginning is that I assumed negotiation was a zero- sum game And it's never a zero- sum game because you're a different person You have different needs You're always going to have some things that will be more important to you than other people And in that situation it's like you want to just interlock the things that matter most to each person That's where it becomes a positive sum game Both parties are better off from basically giving and taking in places that are less meaningful to them and more meaningful to the other person Journal of Personality and Social Psychology showed that presenting multiple equivalent offers simultaneously increases the likelihood of finding mutually beneficial solutions This approach demonstrates flexibility while also maintaining your core interest because you're the one who's presenting all the offers It's almost like a reverse assumed close Hey I'll do any of these three things and you just pick the one that works for you And then the thing is they're picking all any of these I said already worked for me Let me give you like a real world example So let's say option A is lower monthly fee with a longer commitment Option B is a higher monthly fee but has premium support And then option C is kind of like a pay as you go with slightly higher rates but maximum flexibility Right so all three options will give you similar overall value but you might look at them and be like I just want to know which one meets your needs better From their answers you'll be able to understand their motivations Now let me tell you some knowledge from the street If someone gives you multiple offers if you're on the other side of the table what I like to do is say "I like the best part of this one and I like the best part of this one and I like the best part of this one And why don't we make an offer that is the best of all three? " And I learned this from my friend Shiron Guy's done more deals than anyone I know I was like "Oo that's good.
" So the flip side is you could ask someone "Hey can you give me two or three versions of what this deal might look like? " And then they come up with their versions of the deals And then you say "Great I like this piece How about we do option D? " And what's nice about this is it also shows some active listing for you You countering with something like this or even taking two of the three components Two of those components might be meaningful for you and not for them again because they put them in the different deals You might find out that you can get more of the things that you want just by asking So number four reciprocity Now reciprocity is key in all sorts of persuasion And I'll say this one caveat that I believe reciprocity only matters in cultures where reciprocity matters There are cultures where reciprocity is not nearly as important This is where sometimes when cultures mix people take advantage of systems because that's not as important in the culture they came from And so the culture where the person is giving first in order because they expect something back the other culture will just take advantage and be like look at this idiot He just gave me some free stuff And so you have to make sure that basically you're within a culture or society that reciprocity is the norm But if it is the norm there's huge amounts of things that you can use from a persuasion perspective So the beauty with how we structure reciprocity is that people are more sensitive to the fact that they gave something and you give something What's more difficult is ascribing the relative value So let me give you an extreme example Let's say that I take someone's order from the counter and I bring it to the table where we're both eating lunch right the person might say "Thank you for doing that.
" If I then said "Hey can you pick me up and drop me off from the airport tomorrow i mean I did get you your lunch yesterday. " The thing is that it poses it looks like it smells like reciprocity but the value of those two concessions are wildly different And so the idea is that we're trying to trade concessions in a way that is still advantageous to us What I like to do in terms of my thinking like the example that I gave in terms of multiple simultaneous offers which is why I think this works well post that is that I try and break each of my things into as many different pieces as possible so I can trade more times So like this house example that I gave you earlier if I have 15 million but this thing is going to be financed Can I go cash or financed i can do closing period I could say it's a 90-day close or a 30-day close That's going to be significantly more valuable I could say furniture versus not There's other terms that we can basically weave into the deal that I'm not going to play all those cards at once Now this one is a real estate track This is much more straightforward but a transaction like this it's like you want to think what are all the variables we want to use all the value equation variables Speed How can I deliver this faster how can I do it slower we've got the actual price obviously On top of that we have the risk associated So who's going to be taking on more risk in this situation and what are the different types of risk that someone's taking on then we have ease How can we make this easier or harder for the other person for each of these components you want to take whatever you're offering whether it's an employee or whether it's a vendor or whether it's a deal I want to look through each of these lenses and think how can I have more variables at my disposal so that when it comes to the horse trading I can make a small concession in ease and they only have two variables and I've got five and when I have five I can give without changing my price and say hey I'll do 15 with ease they'll come down from 17 to 16 and I say cool I'll do 15 with ease and risk and then they come down from 16 to 15. 5 and I say cool I'll do 15 with ease risk and speed And so when we do it like that then all of a sudden it's like I'm still keeping the reciprocity but I just have more arrows in my quiver When you're sitting down at the table you want to think through all of these different variables that you have at your disposal For me I have this big deal sheet that has 80 different things that I can change about a deal so that when I go into the conversation I have so many things that I can move flexibly to make my offers more compelling without the unstated assumptions that people all have because the thing is they're assuming the deal just has these two things then everything else is the way they want And for you you have 80 other variables that you're like "Oh I can change this one I can change this one I can change this one.
" And that allows you to stay in reciprocity with the other person that ultimately gets you a better deal long term So as we're thinking through this it's if we sit down at the table and we have one or multiple other offers that we think are really compelling and interesting and we use that as our psychological power so we can anchor super high and we anchor low in terms of our counters right anchor high in terms of our initial anchor low in terms of our counter offers and then we have multiple simultaneous offers that are either presented to us or that we can present to somebody else using more variables and then horse trade with reciprocity so we can stay in the pocket but still more or less stay the same initial offer then we're probably going to increase the likelihood that we get a good deal done number five is framing I would say this is most important especially for employees and vendors less so for partnership type or like M&A type stuff but it can probably also be important here too but I'll just give more use cases in these two right now so if we're talking about framing then how we position something is going to matter a lot so if I'm an employee selling to an employer which is fundamentally what we're doing I would probably say something to the extent of we want to make investments in these places and I see me coming in as an investment not a cost And ideally if we frame this as how am I going to get a return on this investment then I'm no longer a cost center in the business at all because I'm just a percentage commission essentially on what I'm bringing in the business If I'm a vendor to the same degree I'm going to try and frame something as an investment I'm going to frame it based on return not based on overhead On the flip side you always want to reframe the other way which is you want to reframe this as cost You want to reframe this as overhead so that ultimately you have more basically negotiating power because you're pushing them down They're anchoring themselves up A lot of times people don't even understand framing And so they'll just accept the frame that you present So rather than saying "Hey this is going to cost you five grand," we can say like for $5,000 investment you can see $15,000 in maintenance cost savings That's very different than this is going to cost five grand If that's the reality then it's going to be far more compelling and far more likely person's going to accept your offer even though functionally it's the exact same thing I was talking to a few home services businesses that do like kind of construction stuff And so I talked to a pool guy talked to a patio guy I talked to an awnings guy who did like awnings on top of patios and I said um do you have any data that shows resale value of homes that have awnings versus not or do you have any data on resale value of the specific neighborhoods that you're going to go into of pool versus not pool if someone knows they spent $100,000 on a pool and adds $100,000 to their house I'm like then the pool's free Except you get to enjoy the pool the whole time So this we shouldn't even be talking about that because you're really just taking it from one pocket and putting to another You're the one who gets to keep the pool I don't keep the pool It's all for you So the idea here is how we frame it If you're going into these things that cost you 100 grand that's a very different frame than your house is currently worth a million The other houses that are selling at 1.
