Negotiation skills – are they the key to success in business?
There are two types of people in the world – those who enjoy haggling to get the best deal, and those who would rather avoid it if they could. Even if you’d prefer a visit to the dentist than a negotiating session, if you own a small business, this is a necessary skill. The golden rule of successful negotiations is to be fair and square with your opponent. A manipulative, aggressive behaviour won’t bring you a satisfactory deal, not to mention that your business partners will never want to work with you again.
Many business deals require negotiation. You strike a deal with vendors over the terms of your supply agreement. You negotiate job duties and pay employees. You bargain over contract terms with customers or joint venture partners. Strong skills in negotiation can help you get a better deal in any of these situations, and that can directly affect your bottom line. Here are a few tips that can help you build your negotiating skills, and enhance your business success.
Before you enter any negotiation, make sure you’ve got as much information as possible. What do you want out of the deal? What does the other person want? Use this information to help plan your strategy. What’s your opening offer going to be? How much are you willing to give on this? What other aspects of the deal can you work with? For instance, rather than just talking price, can you work with delivery time or other aspects of the deal? The more information you have up front, the better. Key aspects to consider for your negotiation strategy:
- Have a marketing and product strategy clearly laid out
- Consider win-win solutions
- Consider both long-term and short-term collaborations with negotiators
- Set reachable targets
- Have a motivation strategy
- Have a decision-making strategy
Negotiating is a back and forth process. You don’t just lay out your offer and expound on it yourself. Listen to the other person, and try to pick up clues about what they want and need – this can give you another bargaining chip. If you find they really need your product by March 31, guaranteeing the delivery date may bring you a better price.
Don’t show all your cards
Negotiation is kind of like a poker game. Don’t lay all your cards on the table right away, or that will give the other party an advantage. Don’t let them know what your bottom line is on price, schedule, terms, or other factors. Keep them guessing about exactly what you’d accept in order to seal the deal.
There’s a flow to a successful negotiation, with each party giving a little here, and taking a little there. If you walk into it with a “take it or leave it” approach, you may wind up losing the deal altogether. Be prepared to compromise, and remember that you want to end up with a win-win situation. If both parties are happy with the deal, it can lead to profitable business dealings for years to come. It’s equally important to compromise with credibility. Make your opponent believe whatever comes out of your mouth, and try to make concessions sound beneficial for both of you.
This process can take time, and the more complex the arrangement you’re trying to negotiate, the longer it can take. If you need to seal the deal in a hurry, the other party gains a leverage point, and you could end up paying more than you need to. Patience can pay off in getting you a better deal.
With negotiation, as in so many aspects of life, practical experience is the key. Getting out there and practicing these skills is the way to improve your abilities and results in any negotiation. It may not be your idea of a fun time, but you’ll become more confident and comfortable with it over time. Work on it a bit, and your business can reap the benefits. Great negotiation skills can work miracles for your business, and to get what you want you need to practice. Planning ahead, building a strong research team, and taking the time to understand your opponent’s business goals too, are the key to winning negotiations.
Author Bio: Davis Miller frequently writes business related articles concerned with negotiation. He is a frequent author at http://www.thegappartnership.com/ which provides negotiation workshops in about 12 languages in over 50 countries.