I enjoy the show “Shark Tank” and when I was watching a recorded episode last night, I thought it was pretty gutsy for an eleven year old boy to ask for more money when the Sharks made him an offer. The move almost cost the boy and his sisters (they were the business owners, though Mom and Dad were there too, and had financed the business to this point) a deal. The family ended up taking the initial offer, and when asked whose idea it was to ask for more money, because it almost cost them, the boy answered that they did get a deal, and that’s what mattered. And the boy was right, he did get the deal, and in fact I believe the Sharks respected the guts the boy showed. After all, the group of investors wouldn’t have massed billions between them if it weren’t for negotiating and taking risks. It does bring me to an important aspect of negotiations. As a general rule, don’t accept first offers.

Some people would insist that you never take the first offer, but I don’t like to say never, so I’ll stick with it being a general rule. There is a concern, like on the episode of “Shark Tank,” that if you make a counteroffer, they will refuse and you have given them a reason to back out of the deal altogether and you get nothing. And this is a valid concern, and could very well happen. In some cases, it may be that the person wasn’t serious about negotiating in the first place, and in others such as the above television show, the shrewd negotiators opened with their one and final option. That or they were just good at negotiation and knew their stance would make the family reconsider. Regardless, the refusal of the initial offer does have the potential to stop the deal. However, more often, the acceptance of the first offer will create the feeling in the initial party that they could have done better. Otherwise, why would you jump at the first offer so quickly? This feeling could turn to remorse and second thoughts, and they may want to change their mind about the deal.

This is especially true when negotiating products or services that are routinely negotiated upon. If you accept the first offer right off the bat, the other side may wonder what you are up to, and suspect that something is being hidden, or that they are missing something about the deal. An exception to this is when negotiating with an unsophisticated or novice negotiator. They may accept the first offer you make and you can just be happy they did so. But in most negotiations, it is not only normal, but expected, that offers and counteroffers will go back and forth until a deal is made. There will be less remorseful and suspicious feelings and both parties will feel better about the negotiated deal. So just remember, as a general rule, when bargaining is expected, don’t accept the first offer.