Some of the world’s most prolific business leaders attribute a fair part of their success to the art of negotiation. As a small business owner, knowing how to negotiate will become one of the most powerful tools in your arsenal.
Consider the words of American author and life coach, Tony Robbins, who said: “A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have,” which can be particularly true when it comes to negotiation.
The following strategies and tactics will help you sharpen your negotiation skills:
Check your mindset
No price in the business world is ever fixed. Therefore, you should never take for granted that the price of something, or the terms and conditions attached to it, are set in stone. Entering into a deal with this mindset will allow you to project confidence and prevent the supplier, partner or employee from believing that theirs is the final say.
Ultimately, if you can assert yourself in a way that gives the other party the impression that you are comfortable with walking away should the deal not be optimally beneficial, you’ll be halfway there.
Predetermine what you’ll do based on a number of possible outcomes
Before entering a negotiation, develop a set plan of action. As part of this process, you’ll need to decide for yourself how to proceed should the deal be settled in your favour. Most importantly, you’ll also need to reach a resolution on what to do should you not realise the ideal outcome.
If that means thanking the other party for the opportunity and walking away from the deal, then set that boundary and stick to it. If it means going back to the drawing board and subsequently proposing a Best Alternative to Negotiated Agreement (BATNA), then make that commitment to yourself and your business.
Whether celebrating a win or bouncing back from a failed negotiation, you require a plan that allows you to remain mentally and emotionally empowered and focused on your long-term vision.
Know when to settle
Negotiation in the business world is often a balancing act between getting the right deal and building the right kind of relationship. If at a point in the negotiation, you find that you have the upper hand, resist the temptation to over-negotiate and push the other party too far outside of their comfort zone.
Ultimately, your objective should be to walk away from a negotiation knowing that you’ve maximised the benefits of the deal for your business, but also that you’ve built a rapport with someone who may prove to be a valuable connection in your network. Knowing when to draw the line and negotiate within reason will engender trust and mutual respect – two values that go a long way in building good long-term business relationships.
A quick list of negotiation dos and don’ts
- Set objectives beforehand – know exactly what the ideal outcome is, but also the minimum acceptable outcome. You can then be flexible between those two parameters.
- Practice active listening. Rather than listening to the other party with the sole intention of formulating a rebuttal or response, listen intently to their reasoning and respond with patience.
- Follow up the conversation with written confirmation of what was agreed upon to prevent misunderstandings and misinterpretations.
- Ask questions – be objective enough to listen to all sides of the argument and ask questions that will give you a better understanding of how to reach a win-win.
- Rush or allow yourself to be pressurised into making a decision. Ask for a reasonable amount of time to consider your options if that’s what you need.
- Enter a deal negotiation with a confrontational attitude. Be assertive – not argumentative.
- Make assumptions about the other party’s business. Go into a negotiation as prepared as possible by conducting research on their competitors, their strengths, their weaknesses and their values.