A big part of managing and running a business is negotiating, whether you’re negotiating vendor contracts, employee salaries, or your property lease. While extremely important in the business world, schools often do not teach this valuable skill. Not everyone is born a good negotiator, but any business person can learn the necessary skills over time through experience.
Whether you’re already an expert negotiator or you don’t think you can handle the pressure, here is a list of techniques for small business owners to feel a little more comfortable and prepared the next time you need to haggle.
Determine your top priorities – Going into a negotiation, you should know exactly what you want. Without a set bottom line, you’ll either come out empty-handed or the meeting will end up going in circles. Once you know what it is that you want, rank each of your goals in order of importance. Set a few primary goals and then secondary goals. This will help you to better formulate your negotiation conversation because you’ll know what you need to focus on.
Do your research – Walking into a negotiation unprepared is one of the worst things you can do. It shows that you aren’t serious and that you don’t have any respect for your time or the person you’re meeting with. You need to make sure you go to a meeting with numbers and facts to back up your offer and support your needs. If you can site credible resources, your argument will be stronger and you may not have to work as hard to persuade the other side.
Understand the cultural differences in negotiation styles – This may seem unimportant or irrelevant to some, but cultural backgrounds make a big difference in negotiations. For example, when you walk into a meeting with Chinese businessmen and try to discuss an actual deal at the table with them, you may be embarrassed when they immediately turn you down because they like to make business decisions offline. Different cultures have their own negotiation styles. Some are more laidback while others like to jump right into the process.
Ask for more than you want or expect to get – If you know a thing or two about negotiating, you know that asking for what you want right off the bat is not the best idea. If you give away what you actually want, you have no wiggle room to negotiate. What you’d be doing is presenting a take-it-or-leave-it deal. Know what your bottom line goal is and shoot for something higher over the course of the negotiation. That way, you can potentially come down to your bottom line or even come out with a little more than you expected.
Know what you’re willing to give up – You won’t always get what you want. In fact, more likely you will walk out of a negotiation with less than you expected. Going into a meeting, it’s important to know what you’re willing to give up. If you aren’t ready to give anything, you might want to reconsider the meeting. While it’s ideal to get everything you want, a majority of the time you will have to give something as well.
Know when to walk away – From the start of the negotiation it should be clear what is touchable and what is not. Are there certain things that are non-negotiable? If yes, make that clear. If the other party is not consenting, then you need to walk away. Rather than going down a bad road of arguments, it’s better to politely remove yourself and your business from the equation and look elsewhere for a deal.
Negotiating deals for your small business doesn’t have to be scary. As long as you walk into a meeting knowing what you want, what you can concede and come prepared with facts, then you will be in a good position to negotiate successfully.
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