When Is a Good Deal Too Good?

By Michael Masterson

When negotiating a deal, how hard should you push for an advantage? Should you play the competition game and get as much as you can? Or should you "take care of" the other guy, even if he isn't taking care of himself?

What should you do if you discover a benefit or cost in the deal that the other guy isn't aware of? Do you bring it up? Or figure "If he's too stupid to notice, he doesn't deserve to find out."

If your resources and position in the marketplace give you a substantial negotiating position over the other guy - if he needs you more than you need him - should you take advantage of it?

Let's answer these questions today.

I do business with a lot of very accomplished businesspeople - entrepreneurs and executives who understand how business really works. They have learned the importance of going after new business, and have developed the personal skills to apply themselves aggressively toward that end.

Some of these people, however, allow this virtue to become a vice. When they negotiate deals, they focus all their energy on themselves and their goals. If they think of the other guy at all, it is only to discover a weakness they can take advantage of.

These guys can be great family men and loyal friends - but when it comes to doing business, they believe in taking care of Number One. And for them, because of the wa they see business, taking care of Number One means caring little or nothing about the other guy.

Some of these guys are just plain evil. They like screwing people and take pleasure from giving others pain. But many more see themselves as just and moral but with a "realistic" view of the business world. For this group - let's call them the self-righteous sharks - business is an "either-or" proposition: "Either I get the gold or he does."

Self-righteous sharks tend to act selfishly in all facets of their business life - in sharing information, in deciding at whose office a meeting will be held, in determining who sits where at a business dinner, etc.

You Can Win the Battles but Not the War

Some might view that selfishness as the natural personality of a winning competitor. I view it as a major character defect.

When you think of business as a war and arm yourself accordingly, you can win plenty of battles. But as the years roll by and the battlefields change along with technology, all military approaches - however clever or powerful - fail.

Yes, you can fight your way to the top of the mountain when you are young and strong. But nobody stays on top forever.

Remember that old saw: Be nice to the people you meet on the way up, because they will be the same ones you meet on the way down.

So long as you maintain an edge, you can take advantage of it. But the minute you lose ground, you will slide onto a slippery downhill slope - greased by the bitterness of the many people who secretly resent you for past transgressions.

As I said before, righteous sharks see the world in a different way than I do. In my opinion, their view is based on at least two fundamentally faulty ideas. One is that power is static - that he who is stronger now will be stronger in the future. Another is that wealth is a commodity - that it is something limited as opposed to something organic that can grow.

Mother baked a nice apple pie. She cuts it into four pieces. Since Mom has not used a protractor along with her knife, chances are that one of those pieces is slightly larger than the others. "I want the largest piece," the righteous shark says.

The trouble with that is: (1) Mother can and probably will make more pies, and (2) when she does, the shark's brothers and sisters will remember that he had the biggest piece the last time. If the shark is bigger and stronger than his siblings, he may be able to wrestle the biggest piece of pie for himself again. But what if he's feeling a little under the weather when Mom bakes the next pie? What will happen then? Will he be given the biggest piece because that's the way it was done before? Or will he get a smaller piece? Or none at all?

When I get into a deal, I don't want the other guy to feel as if he's been taken advantage of. I don't want that to happen for three reasons - two practical and one philosophical.

First of all, I believe that someone who feels abashed by me will quietly assign an emotional marker to my butt that says "You'll get yours one day." Second, I believe that if I get known as a tough guy to do business with, the number of people who will bring me good deals will diminish and the pool will eventually dry up completely. And, finally, I think that, in the great scheme of things, everything eventually balances out with interest. If I give you something today, I'll get something back from someone - plus interest - some years hence. If I take something from you now, I'll pay the price for it - with interest - in the future.

If you see things the way I do, you really, really don't want to take advantage of anyone. You'd rather be the one taken advantage of.

My brother tells me that people tell him I'm sometimes "too good" to those I partner with. When he sees someone I've helped get rich "overcharge" me for something or refuse to offer a concession after the many "gifts" I've given him, he feels as if I'm being too soft - maybe even foolish.

But when he considers how much less I fret about being screwed and how much more enjoyment I get from my business relationships, he realizes that there's a distinct and substantial advantage to being willing to give more than you get.

"That's worth a lot," he concedes. "I don't know if you'll convince your readers of it. But maybe a few of them will get it. And that will be good."

[Ed. Note: The only true shortcut to business success is to follow the lead of masters who've "been there, done that" - and have millions to show for it. You can get Michael Masterson's mentorship here in ETR. And if you want the true secrets to building a powerhouse, profit-producing business, we've got a team of business-building experts who are ready to tell all. Learn the details here.]