Business Sales, Negotiation

Want to end the back and forth? Draw the line!

November 14, 2016

I recently was negotiating a settlement on behalf of a client.     There was an issue that came up and the escrow money that was being held was now frozen.    My client offered $5k “go away money”, the opposing side wanted $300K, then after much going back and forth demanded $60K.

My client was still outraged and was staring in the face of a long drawn out litigation that could cost tens of thousands of dollars.     I suggested that the other side was looking at the same costs and it was time to show them the line.

We gave them till 5PM on Friday (48 hours) to accept $5,500 or they should file suit.     They agreed at 4:30pm in the 47th hour.

The strategy of drawing the line is a dangerous one.   But sometimes effective as it was in this case.    Going up $500 when they were demanding tens or thousands more showed them a few things.   One, we were making a move and acknowledging their move to $60k from the ridiculous $300k.    The other messages were that we had reached our maximum and other attempts to have up increase our settlement would result in mere pennies.

Drawing the line

Drawing the line

We added the deadline tactic and between the two resolved the issue quickly after weeks and weeks of back and forth.    Again, this is a dangerous game and you need to be ready to act on your threat of what will transpire if the cross the line.    And once the line in drawn, you cannot move it or speak to them again.

This time it worked.

Andy Cagnetta owns and operates Transworld Business Advisors He joined the company as a sales associate and later purchased it. Transworld is an international franchise business and franchise brokerage, with thousands of businesses for sale and franchisees in the United States and Internationally.

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