Our emotions have a huge impact on our day to day lives. They influence buying behaviour, and marketers have cottoned on to how to manipulate emotional intelligence to drive sales.
Emotions also affect selling – particularly when negotiating.
According to research by Harvard Business School professor Alison Wood Brooks, “…anxious negotiators tend to make more modest first offers, have lower expectations in deal-making discussions, and exit situations early, among other pitfalls.”
Now, when the time comes for you to Double to Sell, and partake of all you’ve put into your cash-rich exit strategy, are you interested in, “…lower expectations in deal-making discussions, and exit situations early, among other pitfalls…?”
I thought not.
Which brings me to why I’m talking about emotions and negotiating today – on this week’s episode of “I'm a Millionaire! So Now What?” I chatted with Eric Haggar, President & CEO of Axxel Inc.
Meet Another Inspirational Member of the Self-Made Nation!
Eric’s a text-book example of what it means to be a member of the Self-Made Nation. While he studied engineering, and built a successful career with Bell Canada, he always knew his endgame would be to shift eventually gears and become an entrepreneur.
An only child, he credits this entrepreneurial spirit to his father. Eric grew up watching his father start, grow, and sell multiple successful businesses, across many fields - a true serial entrepreneur!
So, in 2010, when his dad was about to sell his latest venture – offers on the tables and names on the deal (!) - Eric knew that the time was now or never – and he decided to buy it himself.
Cue one very happy dad.
The company has successfully switched gears, grown, and rebranded over the years. But It hasn’t been all unicorns and sunshine. Running a business never is, is it?
Eric lost his beloved dad to cancer just as he was pivoting a part of the company – investing in another vertical, which meant selling off a current one – and naturally he suffered immeasurable loss.
Leave Your Emotions (Maybe Even Yourself!) at the Door
Eric shared with me about how much his dad’s passing impacted him, how torn he was to be actively invested in selling part of his dad’s business. But more importantly, he shared the steps he took to remain in a neutral place and keep emotions at bay during negotiations.
Obviously, everyone’s different – and everyone’s individual experiences with negotiating a huge sale and/or purchase will be unique. But I think the lesson here is to trust your instincts. Eric knew that he would be in the way – and this was a HUGE business move for the company – but he knew he wouldn’t help, in fact, he might hinder.
And he had people around him he could trust to run the deal, which says a lot about his business smarts as well.
Here’s a bit more of what we talked about.
The Emotion Behind Selling
“So, in 2019, we had a great opportunity to sell off a portion of our business that I believe was more of a risk portion of my business, which was everything related to tax credits, because at that time, tax credits were related to government funds. And as the government budgets get reduced, business gets impacted. So, in order to secure my employees, to secure the sustainability of our business, I thought ‘what can I do to ensure people are protected?’
And that's where I found one of the large accounting firms, they actually approached us to say, ‘Well, we'd be interested in buying a piece of that business. That's almost like the original piece of the puzzle. And it was very hard. It was very hard for me from an emotional perspective, because my father is no longer with us. He lost the battle to cancer three years ago, so he wasn't able to see me sell the business. And that was a very big piece of my emotions, to say, ‘Well, can I part ways with this?’ But I've always known, and my advice to all entrepreneurs as well is, don't let emotions make waves with your business decisions. Because at the end, you feed more than just one family, you feed many, many families. In my case, I had close to 25 people that I was feeding from that division. So how do we make sure we make that sustainable? And get the emotions from a personal perspective, out of the way? How you how you react and how you decide? So yeah, so it's an interesting thing, emotions and objective decisions.”
Sometimes, Put Your Trust in Others
“In my transaction, in order to remove all emotions from it, when I sold the part of the business, I didn't handle the negotiations, I didn't handle the day to day deal structure myself, even though part of my business is mergers and acquisitions. That's what we do for a living! But I made sure to have an outside source, handle all that B.S., so the emotions stayed out of the transaction. And that was probably the best thing I've ever done. I've seen so many cases where entrepreneurs believe they can save a couple of bucks by not hiring an advisor or try to sell their businesses themselves. There are studies…that show emotions eat up a lot of the value you could have gotten. So, I stayed totally impartial. I stayed out of it. I let somebody else negotiate. I drew the big lines of the musts and the non- negotiable items, and I let them run with it. And you know what? Usually a transaction takes anywhere between six to eight months, [but] we finished in (almost) less than three months. So, it was really a profitable decision I made at the time.”
Turn Pandemic Panic Into Opportunities for Change
“In whatever field you're in, things are going to change. And change doesn't necessarily mean bad. It could mean take the change and make it good. Don't look at new ways to work, look at how to transform your business model into this new era that we're hitting. I tell all my clients, all my friends that are entrepreneurs - and some of them are very, very nervous right now - I tell them, ‘don't be nervous, look at what opportunities are going to lie in front of you. Because there will be tons and don't panic, right?’ The worst people can do is panic, and you know it from the stock market, you know it from all kinds of different things that are happening. But panic is again, back on emotions, it's an emotional way to handle your business. So, as entrepreneurs, I think you got to take a step back, you got to breathe, you got to turn this [pandemic and second wave] into a happy opportunity, because I think every business needs transformation. And maybe this gives us a little hit to transform even faster. The little prod that was needed, the little the little fire lit.”
I would love you to have a listen to that episode – because we talk so much about embracing change, finding the strength to turn your business in another direction if necessary, and why it’s so important to believe in yourself and the people around you.
And November is getting closer! I hope to see you at Double to Sell, featuring the great Cameron Herold – reserve your spot before it’s sold out!
If you’re an entrepreneur looking to exit, or you’re at the helm of a thriving business or startup, I would love to talk with you about your stories! You can drop me a line here.
Plus, if you are craving like-minded conversation with growth-oriented business owners, consider joining me and eight other business owners, investors and entrepreneurs for our next two editions of Elevated Conversations - watch this space for more details!
“I’m a Millionaire. So Now What?” is brought to you by Double to Sell - Canada's Premier Invitation-ONLY workshop for business owners wanting a cash-rich exit in 10 years or less. For more information, or to register, please visit the “Double to Sell” website.