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10 Techniques for Better Negotiation
Startup entrepreneurs are not always the best negotiators. They step into the shoes of a business owner for the first time and find — to their surprise — that nearly everything involves negotiation of some kind, and they may not always have those negotiation techniques down.
Starting a business requires, quite literally, hundreds of negotiations. Some are small, like securing the best price on printing your letterhead and business cards. Others are far bigger deals that can make or break your startup business from the get-go. Sometimes you are the buyer; other times the seller. Either way, the skills you need to be a good negotiator are the same.
For some small business owners, it comes naturally. They're the ones who started negotiating an allowance and extra TV time with their parents at age four. For most of us, however, it comes through effort and experience. Rarely is it something you learned as part of a formal education.
Here are ten tactics that can make you a better, more confident negotiator on behalf of your small business:
Ten Negotiation Techniques:
- Prepare, prepare, prepare. Enter a negotiation without proper preparation and you've already lost. Start with yourself. Make sure you are clear on what you really want out of the arrangement. Research the other side to better understand their needs as well as their strengths and weaknesses. Enlist help from experts, such as an accountant, attorney or tech guru.
- Pay attention to timing. Timing is important in any negotiation. Sure, you must know what to ask for. But be sensitive to when you ask for it. There are times to press ahead, and times to wait. When you are looking your best is the time to press for what you want. But beware of pushing too hard and poisoning any long-term relationship.
- Leave behind your ego. The best negotiators either don't care or don't show they care about who gets credit for a successful deal. Their talent is in making the other side feel like the final agreement was all their idea.
- Ramp up your listening skills. The best negotiators are often quiet listeners who patiently let others have the floor while they make their case. They never interrupt. Encourage the other side to talk first. That helps set up one of negotiation's oldest maxims: Whoever mentions numbers first, loses. While that's not always true, it's generally better to sit tight and let the other side go first. Even if they don't mention numbers, it gives you a chance to ask what they are thinking.
- If you don't ask, you don't get. Another tenet of negotiating is "Go high, or go home." As part of your preparation, define your highest justifiable price. As long as you can argue convincingly, don't be afraid to aim high. But no ultimatums, please. Take-it-or-leave-it offers are usually out of place.
- Anticipate compromise. You should expect to make concessions and plan what they might be. Of course, the other side is thinking the same, so never take their first offer. Even if it's better than you'd hoped for, practice your best look of disappointment and politely decline. You never know what else you can get.
- Offer and expect commitment. The glue that keeps deals from unraveling is an unshakable commitment to deliver. You should offer this comfort level to others. Likewise, avoid deals where the other side does not demonstrate commitment.
- Don't absorb their problems. In most negotiations, you will hear all of the other side's problems and reasons they can't give you what you want. They want their problems to become yours, but don't let them. Instead, deal with each as they come up and try to solve them. If their "budget" is too low, for example, maybe there are other places that money could come from.
- Stick to your principles. As an individual and a business owner, you likely have a set of guiding principles — values that you just won't compromise. If you find negotiations crossing those boundaries, it might be a deal you can live without.
- Close with confirmation. At the close of any meeting — even if no final deal is struck — recap the points covered and any areas of agreement. Make sure everyone confirms. Follow-up with appropriate letters or emails. Do not leave behind loose ends.
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