8 | T h e B r i d g e W i n t e r 2 0 2 5
An Offer You Must Refuse…
to Make
THERE ARE MANY SITUATIONS IN BUSINESS NEGOTIATIONS WHERE A BUYER OR SELLER MUST
MAKE THE OPENING OFFER, EVEN THOUGH THEY MIGHT PREFER NOT TO. THERE ARE EFFECTIVE
TACTICS TO EMPLOY WHEN ONE IS FORCED TO MAKE THE OPENING OFFER, AND I COVER THOSE IN
SOME OF MY OTHER MATERIAL. BUT IN THIS ARTICLE, I’D LIKE TO TALK ABOUT THE OPENING OFFERS
YOU SHOULD NEVER MAKE. EVER. UNFORTUNATELY, MANY PEOPLE MAKE THESE KINDS OF OFFERS
EVERY DAY IN BUSINESS NEGOTIATIONS. AND THE RESULTS ARE TYPICALLY NOT POSITIVE.
These “bad” opening offers can come in a variety of
packages, but most can be grouped into what I call
Dummy Offers. There’s two reasons for the name. One,
the offers are not genuine, or serious, so they’re like
a dummy, or fake. Second, and more importantly, the
Dummy Offers are made by dummies, or people who
don’t know any better (but should). And how do I know
about Dummy Offers? Because I have been the dummy
making them, plenty of times, and believe me, the results
usually made me feel pretty dumb!
The first Dummy Offer is the “informal offer”. It goes like
this: the buyer is looking at the business for sale and is
talking and talking and casually mentions to the seller
what he thinks would be an appropriate price to pay.
Just an informal, off the record, comment. Right?
Wrong. While the buyer thought he was merely whetting
the appetite of the seller, to sort of “warm her up” to
where he was going to come in at, what he really did was
to set a base standard in the mind of the seller, a rock-
bottom limit to what the seller should take. Sellers seem
to have this innate sense so that whatever price they hear
from the mouth of the buyer, it is the lowest possible
amount the sale could possibly settle on.
In other words, in the seller’s mind the price negotiation
was heading only north from that point in the transaction.
This is done frequently by buyers. Of course, they never
intend to lock in a bottom price. But that is exactly what
happens. The “informal offer” is an uninformed offer,
and should never be made, unless it is par t of the plan
of the buyer for other reasons (but that is a different
subject altogether).
When you are in a business negotiation, you have
to consider everything you say to be something you
would write, because the opposing par ties don’t forget.
If it works to their advantage, they will remember it and
they will surely hold you to it later on.
Rhett Kniep
M&AMI, Centurion 7 Business Advisors