If you are an entrepreneur, there’s no getting around the fact that negotiation is a key skill that you need in your business. You may need to negotiate deals with suppliers or customers, negotiate salary with employees, or bargain terms of an agreement with business partners. Whether you like negotiating or hate it, it’s something you have to do. Here are a few tips that can improve your negotiation results.
Be clear about your goals
This sounds simple, yet it is sometimes overlooked. Before you go into any negotiation, be clear about your goals and what you hope to achieve. Is your goal to sell 1,000 widgets at a minimum price of $10? To sign a new employee to work for you? To renegotiate the terms of a loan so you have 2 more years to pay? The more clarity you have about your goal, the easier it is to stay on track towards reaching it. Try not to confuse your opponents; keep things simple and to the point.
Prepare beforehand
Learn as much as you can before you ever enter the negotiation. Find out what the other party wants and needs, and any particular pressure points for them. If they have a history in this field, find out what products or services they have used before, and with what results. Make sure you are comfortable with your knowledge of the product or service that you are negotiating around, because if you are unclear on any details, that can be a weak spot for you. The bottom line is that the more you know before you enter the room, the better you can do.
Know your walk-away numbers
You should know in advance just how low or how high you can move on a deal before it is no longer financially beneficial for your company. If you are selling a product, what is the lowest possible price you could accept and still have a workable deal? If you are buying, what is the highest price you are willing to pay? If you’re hiring someone, what is the top amount you can offer in terms of salary or bonus?
Knowing this up front can help you avoid ending up with a counterproductive deal. Worst case scenario – if an offer doesn’t benefit your company in any way; walk away in the most professional way possible. Always leave room for further collaboration.
Make the first offer
Old school negotiation held that the first person to mention a number would lose, but modern negotiators have found the opposite. The first offer puts a stake in the ground, and then all the rest of the negotiation works from there, so making the first offer can work to your advantage. Make your first offer bold, and ask for more than you expect to get, so that you have room to make some concessions during the negotiation. Just don’t be too aggressive with it, or they might not take you seriously.
Don’t disclose your parameters
You need to keep some cards to yourself, and not share all of your negotiating parameters with the other party. You don’t need to let them know what your overall budget is, your walk-away price, or other limitations. You do need to share some information about what you want, but hold back on some things.
Have something to give away
Negotiations often involve compromise, so you need something that you can concede during the process. Think about how you can do this without just giving in on the price. For instance, could you have some extra services included with your original offer that you could remove in order to justify dropping the price? Alternatively, could you offer to throw in free support for a year as a way to sweeten the deal? Think about this during your advance preparation, and you’ll be well on your way to an advantageous deal.
Entrepreneurs must have exquisite negotiation skills in order to help their businesses thrive. Unfortunately, not everyone has an iron business personality. In this case, negotiation workshops and professional seminars can help you get over your fears. With some assistance, every starting entrepreneur can master the art of negotiation.
By Steve Brown and TheGappartnership.com!