When a business is going through financial difficulties, successful negotiations could be the difference between insolvency and saving the business. However, there is a definite art to carrying out negotiations and here’s Jeremy Frost to tell us how to get the best outcomes from the negotiating process.
Yes but most people probably shouldn’t! In theory negotiation sounds simple but it can be very stressful, especially if you are inexperienced. The other party will also have their agenda and if an agreement is not immediately obvious, this can cause disagreements and frustration.
I think perhaps I am! Negotiations can be emotive and you can’t always rely on professionalism to win the day when people are under pressure. However, disagreements and a reluctance to budge delay the process, ultimately making it more painful for everyone involved.
There’s no one secret unfortunately. Before you get into negotiations you need to understand what your situation actually is. This may sound obvious but we often meet with people who aren’t clear on what they need, what they can afford or the reality of their financial situation. Once you have this information, you have a foundation from which to start negotiating.
We help those that are considering entering the negotiating process, those who have tried negotiating but aren’t getting the results they want, or those who are already caught up in protracted negotiations involving various creditors and insolvency practitioners and are quite frankly losing the will to live. They all have the common factor of trying to resolve financial difficulties.
Once on board, we help clients find the clarity referred to above. It may transpire that they can pay back considerably less that what is being demanded. From there we are able to gain an understanding of what each party can afford and will be prepared to accept. We then outline a strategy and put a negotiating position in writing, justify it and invite comment from the creditors. It’s common to experience some resistance from the creditors and that’s where the real negotiations start.
We know our position and where we want and need to end up, we know where we can be flexible and where we need to stand our ground. We are robust in our stance but don’t believe in “bulldozing” other parties into accepting our position. We view the process as taking small steps towards reaching an agreement rather than sprinting towards the courts.
We always settle the position quickly wherever possible as creditors look more favourably upon a debtor committed to a swift resolution.
It does, doesn’t it?! Throughout the negotiating process there are any number of ‘human’ factors at play. There is definitely a coaching element involved where you need to be aware of how both sides will view the problem and their ideas regarding the ideal solution. One view isn’t necessarily better than another; it’s about finding the deal which works for both sides. You need to be able to challenge views without alienating anybody. In some respects it’s similar to mediation insofar as you’re setting up a solution upon which both parties are able to settle.
Currently about 5-10% of our client portfolio is negotiation but we are definitely seeing an increase in demand for our negotiation services. The skillset required for negotiation is transferrable to other elements of the business so it’s all in a day’s work for us!
At Frost Group, we want to make things as easy as possible for you. That is why, if you can’t come to us, we’ll come to you. We operate face to face, nationwide meetings, wherever is most convenient for you.