Learning how to negotiate is, for some business owners, about as difficult as mastering the art of public speaking. The potential for unpleasant confrontation is one element few people care for, as is the possibility that by negotiating ineffectively, one might end up giving away a lot and getting little in return.
But, in fact, business and negotiation skills go hand in hand. So, instead of avoiding give-and-take discussions, use these opportunities to gain valuable experience that can help make you a more effective leader.
Follow these tips to learn how to negotiate more effectively:
Know What Your Counterpart Is All About
The more you research about the other party, the more you can appeal to their strengths and weaknesses. Never go into a negotiating session with a "let's wing it" attitude. Learn all you can about what the person across the table really wants and needs and tailor your strategy accordingly.
Listen More, Speak Less
Another way of gaining tactical insights is by listening more than talking. Avoid overwhelming the other party with long, detailed monologues. Instead, ask open-ended questions that give you the chance to discover their actual bottom line. This can help you modify your strategy and determine where you can give up something in order to get something you want in return.
Be Prepared to Take a Break
Negotiations may get heated, which can rile up emotions. Have a strategy in place to step back from the discussion in these situations (for example, you could say, "I need to consult with my partner," or provide another reasonable excuse). This can allow you (and, hopefully, the other party) to cool down a bit. It's also a smart maneuver if you're feeling pressured to make a decision on the spot.
Bite the Bullet and Go First
When you really don't like to negotiate, it seems incomprehensible that you should be first out of the gate with an offer. In fact, jumping out first in negotiations can work to your advantage. This is an opportunity to set an "anchor number" (whether it's related to an employee's salary or the price you wish to pay for a long-term equipment lease), and the ensuing negotiations will revolve around that figure.
Also, making that first offer demonstrates a sense of confidence on your part that can help influence how the other party approaches any subsequent talks.
Be Clear About What You Want
Subtlety isn't a smart tactic during a negotiation. You can't get what you want if the other party doesn't have a clear idea of what that is. State your goals upfront and invite your negotiating partner to do the same. This can help ensure that everyone's on the same page.
Share a View of a Long-Term Relationship
A single round of negotiations doesn't necessarily mean the end of a relationship. Look for ways to emphasize how working together can be beneficial to everyone involved. As Forbes notes, focusing on cooperation and opportunities for mutual gain can be a valuable strategy. Paint a picture of a potential win-win conclusion to your negotiations.
Allocate time to practice your verbal arguments beforehand. Conduct a mock negotiating session with someone you trust and who can give you objective feedback. This way, you can embark on the real thing with the confidence you need to get what you want.
Don't forget to come back next Wednesday for the next installment in our Small Business Summer School series when we'll be offering a crash course in delegating. See you then!