In business, negotiation is about the give and take process where two parties are seeking common ground in order to reach an agreement or to settle a mutual concern. Negotiation in business takes pace in banking (lines of credit), investor relations (equity stake), contracting (bidding) and product delivery (transference of assets). Negotiating is an art. It is getting what you want or need at a favorable price. It is absolutely critical to the success of your business.
Effective use of negotiation in business is a core leadership skill. However, some believe that effective negotiators in business are adversarial and hostile. Those who believe that tell you to just say yes to a deal and forget about negotiation. We could not disagree more!
The ability to negotiate effectively is critical to the success of your business.
In fact, studies show that people who do not know the art of negotiation are 60 percent less successful than those who do!” ~ MaryEllen Tribby, CEO of WorkingMomsOnly.com
For some, the art of negotiation comes naturally and for others it is a struggle. You can increase the likelihood of success by learning tips from those who have crafted many deals. Those ‘deals‘ can range of employees wanting vacation that conflicts with the seasonality of commerce to buyouts, mergers and large customer contracts. Regardless of the negotiation being made, this advice holds true for all settings. Check your ego at the door, keep your eye on the big picture and remove emotion from the business decision.
“The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts.” ~ Howard Baker
Be Prepared. Great negotiators know their opponents weaknesses as well as they know their own strengths and vice versa. When you are up against goliath, that just means they have information that is useful to your points. Being prepared means gawking at their web site, articles written and a thorough search through Google and LinkedIn. Know the experience and education of the person you will be meeting with. Understand the role competitive pricing plays in your meeting. Know if the party is authorized to make a decision.
Be Strategic and Methodical. Focus on the process rather than the resolution. Be purposeful rather than combative. Know exactly what you want and what they want. Match benefits to wants. Do not cave or concede as you remain patient and confident in your value. Do not worry about insulting the other party when it comes to price, quantity or quality. As long as you aren’t ridiculous the negotiation will continue as you methodically find the padded margin in the deal. In addition to exploiting the other party’s weaknesses, concentrate on taking maximum advantage of your strengths.
“You can look at the situation and feel victimized. Or you can look at it and be excited about conquering the challenges and opportunities it presents.”
― Jack Welch,
Be Dynamic. Remember the cardinal rule of negotiation, if you do not ask for it, you will not get it. Know who has leverage. Who wants it more? What time constraints are at play? Time kills more deals than anything. What options do they have? Know your competition and the deals that have been made. Follow the money, that is who has the advantage.
Be a great listener. The one who talks the most is likely the one who has the most to lose. Talking about how great you are, this is not the time or the place, both sides are well prepared and have checked each other out. Listen to know only what is said, but what is not said. Listen for limitations, flexibility and what is most important to them.
“During the negotiation process, it’s common for misconceptions to occur, since both parties assume what the other person is saying or thinking. This can lead to conflicts or disagreements.” ~ John Rampton
Be the one with the options. Do not enter a negotiation with only one option. You must have alternatives and things that can enhance your position without hemorrhaging your gain. Avoid exclusive negotiations with one party until you have reached a meeting of the minds.
Be the one asking the questions. Great negotiators answer questions with questions. If you get them talking about themselves you are in control. Ask questions that reference pricing, assurances, alternative products, competitive products, things that can be thrown in, timing, delivery, features, benefits, contract language, etc.
Be a winner. If you negotiate a bad deal and take a pound of flesh, you will fight that deal during execution and delivery – it is not worth it. Upon reaching an agreement, thank the other party, but do not celebrate! Celebrating the outcome of a negotiation sends the signal to the other party that they have been taken advantage of. Sending this signal will jeopardize the long-term potential of the relationship. When both parties feel great and you have a win-win solution get all the terms in writing. If it is a big deal, have a lawyer draft it, and choose one both can agree on.
The art of negotiation for the entrepreneur and small business owner is about being the anchor at the table. Take the high road, do not argue and seek to understand before being understood. This is not an agreement, this is a long-term relationship and your reputation. Establish yourself as a top-rank business mind by being a respected negotiator.
Copyright Viral Solutions 2017
Thomas von Ahn
Chief Elephant Slayer for Viral Solutions LLC
“Achievement seems to be connected with action. Successful
men and women keep moving. They make mistakes but they
don’t quit.” — Conrad Hilton