Selling your business? Discover advanced negotiation tactics from Harvard’s Jim Sebenius to ensure a top-value deal.
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Jim is a wealth of information when it comes to negotiating. In this episode, he makes some significant observations and recommendations.
Here are a couple of items I found interesting:
4:30 – Common Traits of Good Negotiators (Authentic, Self-Confident, Prepared)
8:00 – A breakdown of 3D Negotiation
1D: Tactics at the table
2D: Creating value through deal design
3D: Preparation away from the table
“Having the right parties at the table, in the right sequence, addressing the right
issues, with the right process, and the right consequences”
11:55 – Effective competition in negotiation. “The ability to bring somebody else into the [negotiation] earlier is far more important than the extra dollar per share on the backend. On the front end, 50%. On the backend 1 to 2%.”
21:45 – Viewing your business through all the possible lenses available. How will an acquirer value your business? What synergies exist?
25:00 – How to stack the deck by researching previous negotiations that your buyer has been involved in (mindset, personalities, decision makers).
32:00 – “Earn Out” considerations. 35-40% of deals today have Earn Outs included.
36:00 – What is your number? The benefits/risks of being the first to speak vs. price anchoring. Chris Voss techniques.
41:00 – Setting a “justifiable” valuation. Knowing your numbers, multiples, etc.
47:45 – “What is the source of your power in the negotiation?” (Analytical vs. Art)
And a final parting thought. Understanding who your “natural” buyers are is essential to your success.
Your business may bring much more value to the right strategic buyer. There is an excellent module in our Value Builder “Fast Track” Engagement called the Short List Builder.
Working through this exercise is more than worth the entire program's cost for some clients.
If you want to learn more about the tools and resources available, check out the links at the bottom of this episode.
About this Episode
In this episode of Built to Sell Radio, Jim Sebenius, the founder of the Negotiation Unit at Harvard Business School, shares his advanced negotiation strategies for selling a privately held business.
Jim’s extensive experience includes his time at the Blackstone Group, where he negotiated on behalf of one of the world’s largest alternative asset managers with more than $1 trillion under management.
He is also a frequent speaker to YPO and a consultant for privately held companies, helping them navigate complex negotiations.
Jim’s insights are backed by his in-depth research, including first-hand interviews with former U.S. Secretaries of State such as Henry Kissinger, Hillary Clinton, and Rex Tillerson.
These interviews have provided him with unique perspectives on negotiation from some of the world’s most experienced dealmakers, making his advice invaluable for anyone looking to sell their company for maximum value.
Listeners of Built to Sell Radio will discover how to:
Navigate the fine line between empathy and assertiveness in high-stakes negotiations
Harness the power of 3D Negotiation to design deals that unlock hidden value
Avoid the pitfalls of “busted auctions” and manage competitive tension effectively
Prepare for the inevitable challenge of re-trading and protect their deal from erosion
Jim’s shrewd approach to negotiation will help you punch above your weight in a negotiation to sell your business.
About Our Guest
Jim Sebenius
JAMES K. (“Jim”) SEBENIUS, He is the Gordon Donaldson Professor of Business Administration at Harvard Business School, where he founded the Negotiation unit and teaches advanced negotiation to students and senior executives.
He is a founding partner of Lax Sebenius LLC that specializes in analyzing and advising corporations and governments worldwide on their most challenging negotiations.
Although not a lawyer, he also directs the Harvard Negotiation Project at Harvard Law School.
With co-author and business partner, David Lax, Jim originated 3D Negotiation, a uniquely powerful approach for analyzing and advising on complex negotiations.
Sebenius’s private sector career included Blackstone’s startup years; he also served in the U.S. government’s Commerce and State Departments.
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