The Wild, Wild, Wild World of NO!

By Bill Snow

Eskimos, if we are to believe an old cliché, have dozens (if not hundreds) of words for “snow.” The business world, especially the world of buying and selling and investing in companies probably has a few dozen (if not hundreds) of words for “no.” Let’s take a look at some of them.

The business of buying, selling, and investing in businesses can be boiled down to, in the parlance of business books, getting past no. While the basic answers “yes or no” may seem to be an either/or proposition, “no” is not as binary as we may think.

“No” actually has many permutations and uses and based on the actions, intents, body language, and phrasing of the person uttering it, “no” can be far more nuanced and subtle than a seemingly apparent “this or that” dichotomy.  

In other words, “no” may not always mean “no.” So let’s set aside all this etymological, linguistic, and over educated piffle and explore a few examples of business related “no.”

The Actual No

Here’s “no” in its most basic and natural form. An actual, total, complete, honest to god, “I really mean it and please go away” NO!  This “no” is so strong, so absolute, so concrete, that even the most optimistic among us will be left saying, “I think he really means it.”

The way this “no” is performed is simple: The utterer actually means it.  The “no” will be delivered in a polite, perhaps even professional manner, but the utterer really means “no.” Emails and phone messages will go unreturned. You probably won’t hear from this person again.

Next step: Time to move on.

The Burned Bridges No

This “no” is the same as an Actual No, except the utterer has decided to go for some extra credit bonus points by not only saying “no,” but by burning every bridge in the process of saying “no.” Not only will you not hear from this person again, not only will your emails and phone messages go unreturned, you’ll probably be too afraid to even attempt a rekindling of discussions.

Next step: Not only is it time to move on, you may want to lawyer up in case the utterer eventually tries to slap a stalking lawsuit on you.

The Bluffing No

Bluffing is a part of business. We all know this…that’s why some of us played poker in addition to going to college classes. Anyway, someone giving you a “no” actually may be negotiating with you. Here’s where the shades of gray enter into the seemingly black and white world of yes and no.

Is the utterer saying “no” merely in an attempt to get you to agree to low price? If you think so, you need to understand what the utterer really wants, whether your deal is a good fit for the utterer…and if you’re willing to accept that low price.  

This is easier said than done, of course, and if you misread an Actual No for a Bluffing No, you may eventually end up with a Burned Bridges No. So be careful out there!

Next step: Be persistent, but tread carefully.  

No As A Rare Species of Yes

Or is the “yes as a rare species of no”? In this example, the utterer is actually saying “yes” (well, perhaps he just isn’t saying “no”), but for all intents and purposes the utterer really isn’t interested in your deal: he simply doesn’t have the ability (or heart) to say “no.”

Next step: Don’t confuse politeness for actual interest.  Set specific milestones and dates for follow up, if the deal isn’t progressing, in other words, if you’re not seeing specific offers, purchase agreements, due diligence requests, etc., the utterer’s politeness (or timidness) may simply be getting in the way of giving you an Actual No.

The Contrarian No

The Contrarian No is when someone says “no” simply to say “no.” Most often the milieu of toddlers and teenagers, the Contrarian No often pops up in the business world when the erstwhile decision maker is so overwhelmed with responsibility and so afraid to make an actual “yes” decision that simply saying “no” to everything is the safest and easiest course of action. “No” becomes a form of “I can’t make up my mind.”

In the world of private equity, the Contrarian No often resides with those the young, newly minted MBA types who have been tasked with reviewing deals. These neophytes might not know much (yet), but they sure as heck know a bad “yes” can get them fired while a bad “no” probably won’t.

So if sales are flat, that’s a “no.” But if sales are increasing too quickly…that’s a “no” since that sales increase is probably unsustainable. If the valuation expectations are too high, that’s an obvious (and easy) “no,” but if the valuation expectations are low, that’s also a “no.” What does that seller know what we don’t know? If a company has a small number of customers, that’s a “no” because the company does too much business with a small number of firms. But if a company has a large number of customers, that’s a “no” too, because the company will have a difficult time taking care of such a large number of customers.

You get the idea.

Next step: Find the real decision maker.

Other Forms of No

In no way, shape, or form have I listed all the sundry ways business people say “no.” In fact, I’m sure you have a have examples of you own. If you do, please send ‘em to me, perhaps I’ll use them in a future article!

Next step: Send me an email. And please, hold off on your “snow” jokes. I’ve heard ‘em all!