When you create a business (small or large) you put your heart and soul into the business. You want it to succeed (however you measure this) and you have certain perceptions about how well it has performed, the benefits it gives your customers and the inherent value in the business. You have invested money, time and effort as well as feelings, emotions, trust, and even a part of yourself in a creation in which you want to feel pride.
So when you sell this business you are often selling “your baby” - a part of yourself is being sold to another person. It is natural to have feelings about this. It is natural to have perceptions, assumptions, ideas or even demands about what the business is worth, what should be done with it and what terms of sale should be maintained after the deal is done.
And this post is not about those feelings! It is about separating the emotion from the facts in order to secure / close the deal.
How do you keep emotion out of a deal? Recognise the key components of what you are doing. You are conducting a PROCESS
What is a deal?
The deal is an agreement to exchange your business for something of equivalent value - most often money. Although deals can include other things you value, such as a car, a house, a painting, they must be something that you agree is of representative value.
The key is that it is an agrement - no agreement, no deal - no agreement, no contract - no agreement, deal dead, buried, cremated and sunk!
So you need to identify the key requirements to get an agreement. What do you want and what do the other players want? What are the minimum requirements for you and what is the MOST the other players will part with?
The most important thing to know is what is the PROCESS you follow to reach an agreement?
The Process to Reach Agreement
When people understand that a deal is a series of decisions that are to be made and they specify the outcome to be reached then process can help take the emotion out of the deal.
Each decision requires facts and information and some criteria to make the decision. For example, the decision to eat in or dine out needs decisions on the budget, the weather, the location, who is involved and how you will get there.
A deal requires decisions on(among other things) - what is being sold, what will be exchanged, what are the other terms and conditions (T&C’s) of the deal and when will the deal happen (sometimes part of the T&C’s).
The process can be a series of meetings where you reach agreement on each of the decisions. The outcome of each meeting can be a set of minutes or an updated Heads of Agreement.
The process can be:
- Meeting to decide what is being sold.
- Assessment of the value of what is being sold.
- Identification of key T&C’s of each party.
- Discussion of acceptable T&C’s to reach broad agreement.
- Detailed discusssion of T&C’s that are sensitive to each party.
- Document agreement.
- Enact agreement.
When a person makes a RATIONAL decision, they weigh up the pro’s and con’s of the decision and usually decide on the situation or scenario that results in the best outcome for them.
Implicit in this process are some key assumptions:
- The person follows rational decision making based on defined criteria.
- They have all the information necessary to make an informed decision.
- The information is not based on emotive assesments.
So the best outcome for a particular person will result in an improved circumstance. This may not always tied up with monetary measures but other subjective things such as a better lifestyle or less stress. But regardless of the measure, the outcome should be clearly better than the current circumstance.
Any decision that cannot be determined as clearly an improvement on the current circumstances is likely to involve emotion. Whilst this is not a bad thing - it does mean that other people involved in the deal are not likely to appreciate or understand the decision made. This is because the decision is being made based on your emotions - not theirs.
Can you pass the “alternatives” test?
A good test of whether the decision has been made on largely emotional grounds is whether you can imagine yourself making an alternative decision in different conditions or circumstances and can you clearly define the difference in benefits (or opportunity costs)? If you can reasonably see yourself make an alternative decision, chances are you have kept emotions out of the process. Because you are relaxed with another outcome if circumstances where different.
Sure - have passion about the process, have feelings about the loss of your baby, have feelings about the perception of the exchange.
BUT DON’T MAKE DECISIONS BASED ON THE FEELINGS!
This will never be an easy skill to develop - and at some point you will fail in separating emotions from the decisions. But the better deals are done with gusto, with passion and with acceptance that once the deal is done - move on to the next one!
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