Small Business Dealmakers Menu

More than just numbers

What is not said, but is seen, can tip the scales between a good and bad deal

Michael Feuer

December 8, 2017

By: Michael Feuer

During my career, I’ve negotiated more than 1,000 transactions. As CEO of OfficeMax and now Max-Ventures, this ranged from store leases, basic vendor contracts and nine-figure credit lines all the way to major acquisitions and deals amounting to billions of dollars.

A deal is much like a love story. At the beginning, both parties have great expectations, in the middle everybody reaches a frustration point and in the end, if it works, much like the boy getting the girl, handshakes, high fives and guffaws abound.

Before two sides sit down, each starts with the numbers, basically what one side is willing to accept and the other is willing to pay. Countless spreadsheets proliferate as numbers are crunched and vetted from every angle using innumerable scenarios. The initial bid and ask, however, is merely the starting point before the real work begins when each side sits, poker-faced, across from one another, on opposite sides of the table. Make no mistake about it, there is a lot of high drama and theatrics throughout the process. Some dealmakers play the tough guy, others the country bumpkin, while there is always one who projects an aura of total indifference. To top it off, each team always has the prerequisite good cop/bad cop duo.

Location can provide an edge during the first sit down. Some try for home-court advantage. On the flipside, crafty negotiators might want to give the other side a false sense of confidence by being in their chosen venue, hoping they’ll inadvertently drop their guard. Taking a cue from the Godfather flicks, I try to maneuver to sit with my back to the wall and not the door. In the opposite position, it’s easy to be distracted watching the opponent’s eyes darting to-and-fro with the comings and goings in the room.

Once the preliminaries are settled, it’s a benefit to have the other side speak first. Most people don’t know when to shut up and many times opponents start negotiating with themselves to justify the first salvo, asking and then answering their own questions, even before you open your mouth.

What you see can be as important as what is being said. Watch for subtle clues revealing what your rival is really thinking. Glistening moisture at the hairline (anxiety), heavy sweating (losing control), thumping fingers (either impatience or being unsure of what to say) and my favorite — the Adam’s apple bobbing up and down (panic). I was negotiating a $400 million deal for a chain of 250 stores when I picked up on my counterpart’s habit of slouching in his chair when he was being less than truthful or bluffing. The further he slid, the bigger the fib. I knew I had him when I could only see his eyebrows above the table. Another sure “tell” is when the opponent has a smirk on his face, which strongly suggests that what is being offered is a meaningless throwaway to appease you.

Negotiations are a lot like a mystery movie — nonverbal clues can crack the case in your favor, making the difference between a profitable transaction or a money loser.

Michael Feuer co-founded OfficeMax and in 16-years as CEO, grew the retailer to sales of $5 billion in 1,000 stores worldwide. Today, as founder/CEO of Max-Ventures, his firm invests in and consults for retail businesses. Feuer serves on a number of boards, is a frequent national speaker and author of the business books “The Benevolent Dictator” and ”Tips from the Top.”