It’s simple, really… Have a plan and start early.
I wrote about this as part of a post a few weeks ago in relation to the amount of time it takes to complete a deal, but think it’s worth adding some detail.
Starting early and controlling the pace of negotiations is a very powerful. Time allows you to keep emotions out of the discussion, avoids hasty decisions, lets you identify priorities and soft spots with your counter-party, and prevents settling for unacceptable terms.
Additionally, just giving the impression that you would consider alternative options creates anxiety and gives you tremendous power in the discussions. It doesn’t require making demands, being aggressive, or trying to intimidate. It’s just being cool, calm, and collected.
A short case study that illustrates my point:
A technology company engaged us to help them expand and extend their lease. They engaged us with more than eighteen months to go before their lease expiration. The landlord was reluctant to agree to our terms so we were able to “go silent.” We let the landlord come back to us when we created doubt and uncertainty about our intentions.
When everything was done, we were able to reduce their rent by 15%, secure generous concessions, and start recognizing the savings three months before their existing lease expired. This allowed my client to reallocate some capital towards other priorities and invest in a couple of discretionary projects.