LimeMinds - A Fresh Approach to Business » Training and Development

Do You Negotiate To Win?

admin — Tue, 29 Sep 2009 18:33:51 +0000

Nearly all of us at some point in both our personal and business will have to negotiate something, whether it is a better price, more sales volume or which program to watch on TV.

The majority of us will go into these negotiations wanting to win, to get the best results for ourselves, but this is a fundamentally flawed approach to negotiating. Whilst we should always look to maximise our profit in business when negotiating the win/lose mentality limits our ability to achieve greater results.

Why? Well because simply looking at the cake and seeing how it can be divided so that I get the biggest piece normally develops an air of conflict and competition. Few agreements are reached under such conditions and often when one is reached one party feels hard done by. Whilst leaving your counterpart reeling from the loss may work if you never have to deal with them again or anyone they may know. It certainly doesn’t develop long term business relationships, or bode well for repeat business.

Win/Lose is a zero sum game and its better to create more options and variables than to haggle over one or two. Instead of splitting the cake, make it bigger. Whilst Win/Win doesn’t really exist the feeling of mutual win is the key. Both parties should feel satisfied and both should look to make concessions in order to create that satisfaction within the other party.

When approaching a negotiation try to look at it in other ways then the simplistic sporting analogy of we win they lose. In the end you should find you actually gain more and will find people enjoy doing business with you.

For more on negotiation please read some of our other articles, we also have worksheets and short courses available through our Academy which you can download.

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Coaching to GROW

admin — Tue, 01 Sep 2009 17:45:46 +0000

Coaching is fast becoming one of the most popular and most effective ways to get the best results and develop people to achieve their goals.

More and more large businesses are incorporating coaching into their management and leadership models and are implementing coaching courses up and down their management structures.

Coaching delivers great results when developing people because coaching is seen as a non-judgemental way of creating plans of action when looking to achieve goals. It also engages with the coachee as it is them and not the coach who creates the critical next steps. Nothing irritates more, or engages less than being told what and how to develop.

The best know method of coaching and one that main businesses are utilising is the GROW model. This model is a simple 4 step plan that can be utilised in both professional and personal environments and should be used in one-to-one meetings

G.. Goal

What is the desired outcome?

Set performance goals?

Make it achievable & SMART

R.. Reality

What is the current situation?

Look for evidence and facts

Compel the coachee to think

O.. Option

The more the better!

Record them and do not judge

Offer suggestions only if asked

Compel the coachee to think

W.. Will

Convert discussion to decision

Highlight any barriers/blockers, ask what support is required

Check commitment to course of action

All the way through the process remain in question mode, use ‘What else?’ as much as possible. Do not enter solution mode and suspend judgement, remember this is the coachee’s problem/development area not yours.

This is a quick overview of the process of using the GROW model, for a in-depth guide visit our academy and download our manager’s guide to ‘Coaching to Grow’ to help implement in your business.

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Quick Financial Measures to Check The Health Of Your Customers

admin — Mon, 10 Aug 2009 17:59:43 +0000

We’ve listed a few of the quick financial measures you can run on your customers (or suppliers) to check their business health. We’re sure you’d agree that in ths current economic climate any insight into the long term viability of your customers and suppliers is fairly useful.

If the company you are looking at is listed on the stock exchange you should be able to access these measures through a number of financial websites online without needing to employ any maths, (our favourite is www.advfn.co.uk) but don’t worry if the company isn’t listed as you can work these measures out with just the company’s annual reports logged at Companies House (for those based in the UK) and a calculator.

Current Ratio

Current Assets (CA) Divided by Current Liabilities (CL)

Current assets divided by current liabilities i.e. the ability (in theory) of a company to meet its short term debt on demand, for instance, if it went into receivership.

Strictly speaking this ratio should be greater or equal to 1, although in practice a much lower value is widely accepted (one of the effects of Just-In-Time).

Quick Ratio (acid test)

Current Assets (CA) – Stocks Divided by Current Liabilities

Current assets less stocks divided by current liabilities.

The rationale here is that stocks cannot be quickly converted into cash in order to meet short term debt on demand, and hence they are deducted from current assets.

In theory, a company’s quick ratio should be greater or equal to 1, or it is insolvent. However, a much lower figure is generally accepted today, provided that the company is considered to be financially stable.

Return on Capital Employed (ROCE) %

Net Profit before taxation x 100

Fixed Assets (FA) + Current Assets (CA) – Current Liabilities

Net profit (profit before taxation) as a percentage of the capital tied up in the business i.e. the company’s profitability.

The higher the ration the more profitable the company. Relate this to net margin and capital turnover.

The percentage return must be compared with alternative investment opportunities, such as returns offered on bank accounts.

If investment in the bank can yield a guaranteed 7 per cent plus (depending on interest rates at the time), a company should show a return of around 20 per cent in order to justify using those funds at a higher level of risk.

Debtor Period (days)

365 X Debtors Divided by Turnover

The average number of days credit given to customers i.e. how long it takes the company to get its money in.

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How to be a better Negotiator

admin — Sat, 02 May 2009 09:59:56 +0000

You need a better price. You need a quicker turnaround. You a better return on your money. You need a better salary. Whatever you need, no doubt you’ll need to negotiate but are you any good? Many people will have experience of negotiating but often little understanding of how get the results they need.

First off lets make the distinction between negotiation and haggling. Haggling is the simple exchanges you can hear in any marketplace…

“How much for that vase?”

“£30!”

“I’ll give you £10″

“£20 no less”

“£15 my last offer”

“Deal!”

Haggling is a one variable negotiation (normally price as in the example), is often a one-off deal (you’ll probably never meet the trader again) and so usually results a in meet half way type of result and in more cases than not, one party feeling a little aggrieved.

True negotiation is often more complex with multiple variables included (price, time, quality, quantity) and will not be the only time you deal with the opposite party (they maybe an on-going customer or supplier).

To be successful at negotiating we suggest you cut out the following common mistakes…

Making your target public knowledge – “They will need to reduce their price by 50% before we agree to this deal”. Negotiators who make bold and public statements before going into the negotiation often never get the result they want and therefore instead of losing face they find a stalemate.
Making it personal – By getting personal and focusing on beating someone rather than looking at the positions and goals of the negotiation you often lose sight of what you want or need to achieve in order to deliver success. Not only will you lose sight but most likely you’ll get emotional. Emotional people are prone to making poor decisions and the negotiation table is certainly not the place to make mistakes.
Fail to Plan – Prepare, rehearse, prepare some more and rehearse again! There is no limit to how much preparation you should do (only the time available to you) and it is so vital. Most negotiations are won or lost at this stage the face to face discussion is only the final part. Your pre-game is where you can plan for the different scenarios, develop your BATNA and really understand what you want the outcome to be. So many people skip over this part they think simple setting a goal to achieve will get them the result they need but in the heat of battle a well prepared negotiator will know when to close and when to walk away.

When negoiating try to do the following…

Increase the size of the pie instead of slicing it up - Negotiations which slice the pic never really satisfy anyone but if you can increase the pie its more likely everyone will be content.
Always think Win Win - Too many people think negotiation is all about beating your opponent, its not. Win – Lose will always come back to bite you, just imagine how you feel when you’ve lost out in a negotiation. You may feel angry, aggrieved, dis-trust amongst many other negative emotions. All these feelings will destroy any business relationship and trust that may have existed and will probably inhibit any future dealings between the two parties.
Create a BATNA (Best Alternative To Negotiating an Agreement) – Not all neogiations result in the an agreed solution that both parties can be happy with. Creating an alternative to reaching an agreement can help provide you with greater power in the neogitation as you can always walk away if things aren’t going to plan. It also can be used when neogiations have reached a stalemate. Say you wanted to join the gym near your house but membership was too pricey, you speak with the manager to negotiate a better price, before you meet you look at your options your BATNA in this case maybe joining a gym further away but considerably cheaper. If the manager doesn’t want to budge you may want to mention your BATNA as a final attempt to move the negotiation. It might not but you can still walk away knowing you have a solution you are comfortable with. One note about BATNAs, don’t reveal it early in a negotiation and only declare it if you really can’t move the negotiation any other way. Early declaration of a BATNA can result in the other party simple meeting that requirement when the might have been a potentially better offer waiting to hit the table.

Remember negotiation is a game, put in the training and the preparation before you play to have the best chance of getting the result you want. Don’t feel like you need to rush into an agreement if things don’t stack up just to get it over with.

If you want more advice and help in developing your negotiation skills visit the LimeMinds Academy for our neogitation courses and training guides.

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The 10 Second Business Pitch

admin — Mon, 23 Mar 2009 14:55:45 +0000

“So, what do you do?” I think we’ve all been asked this question, but how should you answer this question in order

Its not an Internet idea, it’s not even a new idea but it’s possibly one of the most important tools a small business owner or entrepreneur can utilise in a networking situation. The 30 second pitch or ‘elevator pitch’ is a concise statement about you and your business that conveys to your audience what you are all about without losing their interest. However the concept of a 30 second pitch in our eyes is a little unhelpful, in reality 30 seconds is often much longer than either 1. the time you’ll get or 2. the time you’ll need. Plus a 30 second rehearsed speech often rings a bit sterile and forced.

This is where the 10 second pitch comes into play, we suggest you have a brief benefit statement ready to use when anyone asks the question. You can develop a unique benefit statement by answering the following questions;

1> What do I or my business do? – Try to answer this without using a job title or industry name.

2> What makes us unique? – What is your USP?

The answer could be as simple as “We help small businesses develop skills to create an online presence, through a range of online resources and e-courses.”. Once stated anyone who has a genuine interest will question more, at which point you can elaborate more and even pitch if the situation feels appropriate. By using the 10 second pitch you inform the person of what you do without allowing them to form any pre-disposed ideas. We didn’t say small business consultancy, or business coach and attach all the stereotypes that come with the titles. Nor did we reel off a long winded pitch before we qualified any interest.

The 10 second pitch is a quick and easy method that you can employ in an array of networking situations, it also attaches an element of filtering to your networking allowing you to find the people in a room with some real interest in your business.

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