What Did You Say? The Importance of Active Listening in Business Negotiations

Posted on: September 7th, 2017

business negotiations A business seller meets with her selected buyer, who has reached a negotiating impasse with the seller’s lawyer.

The owner sets the appointment, tells the buyer to be there on time, and upon arriving late to the meeting she scheduled, begins with, “I need you to get over your entrenched position…” and goes on to illustrate many troublesome reasons why the buyer’s negotiating posture is endangering the viability of the deal and the future of the company.

The buyer feels unheard and unappreciated as he attempts to negotiate terms. The conversation, fueled by tension and frustration, accelerates. The two resolve nothing and the deal impasse continues. With active listening and empathetic responses, this meeting could have been successful for both parties.

Active listening in business negotiations is an opportunity to gather information that will guide you to the best possible outcome. Replying in a way that shows your ability to understand and share your perspective with associates will make difficult conversations easier, more productive, and satisfying.

Rather than jumping to the end goal and stating how you would like the negotiation to conclude, use these communications as a learning opportunity. Before you begin to ask, “Why” or forcefully state your stance, try active listening.

How to actively listen:

Maintain eye contact and wait for your opportunity to speak
Show your interest by not picking up your phone or multitasking
Reiterate what the other person has communicated in order to demonstrate your understanding
Ask questions for clarification if you don’t understand
Steer away from “Why” questions

How to respond empathetically:

Responding to another person includes acting with respect i.e. be on time, be aware of your body language, take the time to look nice for the meeting, etc.
As they speak, identify their emotions toward the subject, if you can’t identify this on your own then ask how they feel
When you respond, you can say things like, “I know you are passionate about this …” to let them know they are being heard beyond just the words they are saying

Before being understood, seek to understand. The way in which you both listen and respond is not only to benefit the other party. Listen, learn, and be empathetic, it will get you further in your negotiations.

As the Fed decides to ease interest rates, middle market acquisition financing structures will benefit in a number of ways. The underlying values of middle market companies will increase leading to a higher enterprise value and lower loan to value ratios for existing portfolio companies of acquisition financing lenders.

The role of acquisition financing is infrequently elevated above a functional transactional one. When a business needs financing to acquire, they go to the market and source acquisition financing to supplement their equity investment to close the deal. Despite existing in many different forms, acquisition financing is rarely explained in terms of the value it brings to the acquirer.

Acquisition financing underwriting usually focuses on business and financial issues that underpin the stability of cash flow. Providers of acquisition financing usually validate the durability of a company’s competitive advantage and the depth of its resource base. Environmental issues are usually not a major part of the analysis in today’s service and technology-based economy.