How to Negotiate Your Way to Better Business Agreements
Negotiation—some people love it like they love the smell of coffee in the morning while others would rather avoid it like the plague. The feelings on the subject are that strong.
For some, the skill comes naturally, but for many of us, it’s something we must craft and continually work on. The best negotiators have honed the skill over time, working their way into their deal-making, and negotiating prowess. These individuals usually have the upper hand in business.
In truth, negotiating in business can be overwhelming and draining. If you’re starting a business or just looking to work better agreements, it’s important to learn the art of negotiating. We’ll discuss some surefire tactics that can put your mind at ease while significantly enhancing your confidence. Not to mention, positioning yourself to close on the terms you’re looking for.
Do Your Homework
First things first, knowledge is power, and having knowledge about the company or person you’re negotiating business agreements with means control at the negotiation table. Take the time, in advance of the meeting, to learn the ins and outs of their product or service. Genuinely understanding what they have and what you need from them puts you in a position to not accept everything they say as final. Not to mention, this allows you to probe deeper and ask the right questions.
Research can help clue you in to an offer that may not be advantageous to your business. It will also supply you with the background information to feel confident and in the proverbial driver’s seat.
Ensure You’re Talking to the Right Person
OK, this one may sound a little obvious but it actually needs to be stated and explained.
The last thing you want is to have a lengthy back and forth with someone who ultimately isn’t the gatekeeper to the deal. To be told that they have to check with a superior or being forwarded to multiple contacts is not what you’re looking for. Put your newly crafted negotiation skills on hold until you have the right person in front of you.
You need to be negotiating with the decision-maker from the jump, otherwise, you’ll likely end up going through another set of negotiations with that person after you’ve already spent the mental energy dealing with a lower level associate.
That’s a draining process and can lead to accepting something that isn’t best for you from pure mental fatigue. Consider this an extension of your research and ensure whoever you’re talking to is the one you can effect change with.
Determine Your Conditions
You’re simply not going to get what you want from any negotiation if you don’t know what you want beforehand. Be it changes to credit card processing fees, lower rent for your storefront, or whatever else you’re negotiating, it’s crucial to know exactly what your bottom line, must-haves are before you’re speaking with your contact.
Knowing, with extreme specificity, what you want opens you up to being more flexible in the negotiation because it allows you to bend in other places to tick those boxes so to speak.
Create a Positive Environment
The old saying goes, “you catch more flies with honey than vinegar” and what’s true in life is just as true in negotiating. The tone and tenor you set in your discussions can go a long way in getting you the result you’re looking for. After all, the idea here isn’t to make an enemy, you’re aiming for a fruitful business relationship for both parties. This is the proverbial win-win scenario, after all, that’s the main factor of the act of negotiation.
Things like body language, smiling, and small talk matter. Therefore matching values, attentive listening, genuine interest, etc. come in handy when laying the groundwork for a mutually-beneficial agreement.
That being said, you need to consider that there will always be outliers to these fundamental rules. So, reading the room, being adaptable, and playing tough-nosed, hardball when necessary is very much worth mentioning and employing when it fits the circumstance. Just ensure you’re keeping your conduct respectful and professional.
The last thing you want to do is bulldoze or overtalk the deal.
Active listening is vital in gauging what the other person is saying in response to your proposal. Talking breathlessly can in some cases lead you to talk your way out of a deal.
Just like you have those must-haves, the company you’re negotiating with has them too, and actively listening lets you hear and work with them. Truly understanding, internalizing, and being flexible to what your counterpart is saying, therefore, can lead to opportunities for agreement. In fact, there’s a chance a more advantageous deal will be put on the table because of your diligence.
While most individuals put the emphasis on speaking during negotiations, the real focus should be on listening and strategizing what your next move is.
Set an Expiration Date and Be Willing to Walk Away
Last but not least be prepared to walk away, particularly if your must-haves aren’t met (this saves you from a bad deal altogether). This is a tactic though and not a concession. Before this move, you’ll have spent considerable time outlining your stance and why you’ve landed on certain terms. All backed by data and evidence, naturally.
The expiration date plays into this. If you’ve presented a fair offer and made a sensible, logical case you should feel comfortable setting a deadline to reply and walk away. If your offer was indeed as fair and reasonable as you thought, this makes your negotiation counterpart get serious or lose the deal. Don’t be afraid to commit to walking away, trust your instincts here.
Negotiating Takes Practice
All of the above can certainly help you in your pursuit of an agreeable deal. But at the end of the day, negotiation is as much an art as it is a skill. You’ll get better and better at achieving those positive outcomes for business the more you do it. Practice makes perfect as they say and that surely extends to the realm of negotiation.