As an entrepreneur or in sales, you need to negotiate with potential clients or even investors, but do you know how to get the best results? It's always handy to plan how to proceed rather than bumble through discussions when you need to strike a deal. These tips will help you do just that.
What is negotiation?
Negotiation is when two or more parties attempt to agree on a course of action. Usually, the teams or individuals have different plans. But there are points where their needs and wants cross over. The best aim is to uncover that point and find a way to please one and all.
What makes negotiation vital for entrepreneurs?
Negotiation is essential for entrepreneurs and salespeople because it helps them secure favorable terms for their business deals. Whether you discuss business contracts, finance, or make a different type of deal, you'll need to know how to negotiate.
What are the best tips for negotiating as an entrepreneur?
Negotiation is part of every relationship, so even if you're new to making business deals, you've negotiated with friends, family, and the other people in your life before.
When you wanted ice cream as a kid, perhaps you bargained with your parents. Maybe you told them you'd be good and tidy your room if they gave you money for a double cone of vanilla with a chocolate flake. Business negotiation involves a similar process.
First, you ascertain your needs and the other party's needs. Next, you exchange ideas. Sometimes you might have to compromise and alter your plans. You might get two chocolate flakes in your ice cream rather than one at other times. Each negotiation differs, but you can use these tips to guide you through every process.
"Place a higher priority on discovering what a win looks like for the other person." - Harvey Robbins.
Be prepared
Learn about the company, individual, or people you are due to meet. It's helpful to know their weaknesses and strengths. You'll also need to recognize their values and what they are likely to want from the business deal.
Check their social media and website, and look at connected press releases. You'll soon know more about the company you'll be dealing with and what to expect.
Planning can also involve goal setting. Identify your key issues and what you hope to get out of the negotiation. Create a shared and clear agenda and commit to staying true to the action items. This demonstrates that you are negotiating in good faith.
Listen and observe
Remember to keep listening at the top of your negotiation must-dos. You know what you want to say, but you can impart your needs after hearing what the other party wants to tell you. Afterward, your plans might change. They may provide data you haven't considered that makes you see circumstances in a new light.
Let listening be your superpower. The more information you glean, the more vital knowledge you can put to good use.
Try to observe concerns and fears. Take responsibility for reading and others' non-verbal communications. Try to discover and observe what this person is concerned about and what is most important to them.
And when you can identify someone's concerns or what drives them, you can address them to understand their goals better, motivations, wants, and needs.
Ability to communicate non-verbally.
Do you have the ability to listen, harness trust, stay quiet when needed, and build rapport through empathy? We use non-verbal communication all the time, and these cues–such as their expressions, body language, tone of voice and even appearance–can tell you a great deal more about what that person is trying to say. Humans gravitate to psychological comfort. So, take a walk in their shoes and genuinely cultivate curiosity about your subject, so they start their business journey with you with trust.
Be direct
Have courage when you negotiate and speak up. Some entrepreneurs hold back, imagining they can say what's on their minds later. However, after listening to the other party's needs and gathering facts, it's time to show that you are confident and make your desires known.
If you demonstrate weakness, other people will imagine you're a pushover, and you might not strike the best deal. Be assertive, though, while remaining polite, and they are more likely to listen to you and take heed of what you have to say.
Aim for a win/win scenario
Think about how to meet your needs and the other party's requirements when you negotiate a deal. Then, when they see you considering what they want as part of your strategy, you will gain respect.
When you aim for a win/win scenario, you stand a good chance of forging an allegiance with the other party and turning them into allies. Your healthy connection could come in handy later.
Be willing to compromise.
Before entering a negotiation, consider that you might need to compromise. Identify the bottom line beneath which you won't tread. What are you willing to give up regarding your plan? Perhaps you won't have to change your plans at all. But at least you'll be ready if the situation arises.
Know when to quit
Occasionally, negotiations won't help you meet your business needs, and the deal on the table won't work for you. So, it's best to know when to walk away and accept that the other party involved isn't a suitable match.
Recognizing it's time to forget the deal with a particular party can save you time, money, and energy in the long run. It also frees you to pursue a better deal elsewhere. So don't be afraid to say 'goodbye' gracefully.
What are potential mistakes during a negotiation?
Avoid these common negotiation mistakes, and the chances of securing a favorable deal will rise.
Making demands
Don't make the mistake of being too demanding. There's a difference between assertiveness and using an aggressive tone to challenge someone when you state what you want to happen.
When you're assertive, you describe your needs confidently. On the other hand, if you are demanding, you tell people what they must do by giving them an order.
No one enjoys others telling them what to do. It can be an immediate cause for them to become defensive. Rather than make demands, make suggestions. Ask the other party what they think of your ideas and be open to their responses.
Getting emotional
Obviously, you have strong feelings about your business and want to progress. Making deals that work for you means a lot to you. But be careful not to get emotional when you negotiate. Otherwise, your reasoning skills will plummet. You'll also reveal any weaknesses and give others an advantage.
Keep your cool and take deep breaths if you feel your emotions rise. Then you'll remain logical and be a better negotiator.
The take-away: Always be prepared, listen, observe, be direct, aim for a win/win scenario, and be willing to compromise and walk away.
Negotiation skills are critical for you as an entrepreneur because they can help you get the best terms for your business deals. However, they're not just about 'winning.' Successful negotiation involves both parties feeling heard and reaching a beneficial outcome.
In the wise words of former FBI hostage negotiator, Chris Voss, "Negotiation is not an act of battle; it's a process of discovery. The goal is to uncover as much information as possible."
So, look at the negotiation as a time of discovery; curiosity can lead to better results.
