Whether you’re bringing a new client on board, looking for additional investments from new or existing stakeholders, or agreeing on new contracts with your employees, your ability to effectively negotiate these conversations is key to the success of your business.
Solid negotiation skills can help you to forge strong working relationships with your clients, mutually beneficial partnerships with suppliers, and put you ahead of your competition when looking to secure the best hires.
Although negotiation skills don’t come naturally to everyone, there are number of strategies that you can practise to nurture your negotiating skills.
Preparation is key
Before you go into any negotiation, it’s important to do your homework on the person, company, or supplier you’re talking to. Gather as much information as possible about the other party and try to understand their strengths and weaknesses, their needs, and the challenges they face. The more you know, the stronger your negotiation position will be.
Your research should define realistic objectives for the negotiation, a strategy, and the outcome you hope to achieve for your business.
Try to understand these questions before the meeting:
- What do you want and how much are you willing to pay?
- What does the other party want and what are they expecting you to pay?
- How will the deal benefit both parties?
- What are your other options in the market?
- How will you handle objections to your proposal?
Assume that the other party has also researched you and be prepared to answer any questions that might come your way.
Find a mutually beneficial middle ground
Nobody wants to walk away from a negotiation feeling like they’ve lost a battle. Good negotiators don’t view a negotiation as a game that can be won or lost. Rather, they try to come to a mutually beneficial agreement that leaves both sides confident in, and satisfied with, the outcome.
Let’s say you’re negotiating with a new supplier. You want good value for money and a high-quality product that you can sell to your customers. The supplier wants to close the sale and hopefully form a long-term relationship with you. There are certainly ways to ensure you both get what you want out of the negotiation.
In business, we want to engage with people who respect our interests, who take the time to develop a positive relationship, and who are creative, flexible, and empathetic in their dealings with us. Keep this in mind for your next negotiation: try to understand not only what the other party wants but why they want it.
Being able to listen is a key skill in a negotiation. Not only will you be able to identify what elements of your proposal will resonate with the other party, but it will also give you an opportunity to understand what their concerns might be.
After presenting your proposal, leave time for the other party to ask questions – and really listen to what they’re saying. Ask them questions if you need clarity on anything. The more information you have, the more successful your negotiation will be.
Don’t be scared to walk away
If something doesn’t feel right about a negotiation, or if you are struggling to come to an agreement with the other side, don’t be afraid to walk away from the deal and either look elsewhere or come back to it at a later stage.
You never want to feel trapped by the terms you’ve agreed to. For example, don’t invest all your sales resources in one large client or get locked into a contract with a single supplier. Keep your options open, even if you’re happy with your current supplier.
Know what your non-negotiables are and stand by them. Showing the other side that you aren’t afraid to walk away will let them know that you are serious about putting your business interests first.
Wrap it up
The longer a deal takes to be signed, the more chance there is of terms changing and something coming along to derail your progress.
That’s not to say that you should rush through negotiations and sign the first contract that is put in front of you, but try to make decisions quickly and keep turnaround times to a minimum.
The tip of the iceberg
There is so much more to negotiating; it’s a skill that should be constantly practised and developed. Whether you choose to read more on the subject, attend a workshop to boost your negotiation skills, or simply learn on the go, the more effort you put into improving your skills, the better you’ll get.