All things being equal about business, I’d have to say this — negotiation can make you or break you, period. Not only is it a corporate skill, it’s a life skill. We do it all the time. We did it to our parents when we were kids. It’s pretty safe to say that it is a relevant — and effective — skill in the office.
This is particularly true for small business owners. You have to know how to negotiate. There’s no “running with it” and seeing how it all pans out. The numbers game plays out, and maybe 9 times out of 10, you get what you want. This, however, isn’t about getting the cookie in the jar, but a lucrative account or business partnership that’ll make sure your small business continues to grow and prosper.
So you have to know how to negotiate well. And here are seven ways to do it:
Know What You Want
It sounds simple — but it’s far from it. Part of knowing what you want includes knowing what you want and when you should have it. Namely, consider your top goals and then rank them. Prioritize them.
Develop a plan. Nail down your bottom line. After all, how are you supposed to negotiate when you don’t even know what you want?
And you thought school was over when you graduated…. That’s also far from the truth. Part of effective negotiation includes comprehensive research. It’s the most prepared businessman, not the most experienced businessman, who will most likely profit from a negotiation.
Know your competitors, their backgrounds, market costs, prior deals. Adjust your strategy to match what they may need without compromising your goals. This is something you should do before actually entering into a negotiation, by the way.
Don’t Be Afraid to Compromise
Speaking of preparation, understand that compromise isn’t a sign of weakness. Be prepared for it. It’s part of the game. You will not get everything you require out of a business negotiation. However, aim high and negotiate down for the better prospect of getting a majority of what you want.
Of course, don’t aim too high, or you might scare your prospects away. Ease them in, let them know you are willing to compromise if possible, but definitely don’t squash your own bottom line just so they can say “yes.”
Sometimes It Doesn’t Always Work Out
The world isn’t perfect. You’re always going to need a fall-back plan. Don’t call it a “Plan B” either. Look for a different “Plan A,” a plan that’s just as good, but only an ‘alternative’ to get more of a yes out of your business prospect.
It’s all about options. Know this, though: sometimes all the options in the world can’t help you get past this important fact about negotations —
Sometimes You’ve Got to Say “No”
Deals don’t work out often. Know when to admit that. Sometimes those prospects want something that you can’t give, and that’s okay. Don’t stretch yourself. In the end, you’re digging your own corporate grave.
There are other fish in the sea, so tighten up that tie, stick to your guns, and determine that parts of your budget or your plan are completely non-negotiable, and if that’s not acceptable, say “okay.” Have a nice day. You never know, though — that strong corporate strategy might be something the prospect might respect enough to one day come back and say, “hey, I liked your style, and I’m ready to do a deal.”
It’s Not About You, Though: It’s About Them.
I did say that your bottom line is ironclad, but understand one important fact about negotiating — if you seal the deal like an effective business lawyer reviewing contracts, bear in mind that you must make the other party feel like they’ve just won a gold mine.
It’s not simply about you and what you’re getting out of it. It’s a partnership resulting from the negotiation. Ensure that the partnership remains profitable and positive by making it all about them.
However…. Don’t Be Timid.
Size matters not. Sure, those big corporations out there that you might negotiate with will have the bigger computers, workforce and perks like the lifetime membership at the million-dollar country club, but ultimately you are a business like they are, so act like one. Don’t be intimidated. Be professional.
Part of being professional is to show sheer logic in your reasoning, complete and total absence of emotion, especially any sign of fear or worry. You’re confident. And this can be a game changer when you show that confidence even in the presence of a massive company over your small business outfit. There’s respect in that.
And Respect Is the Core of All That You Do as a Businessperson
Ultimately, your reputation matters. Win or lose, in the long run, you’ll gain a following, more prospects and better results. So the reality is this — it’s not about getting the deal to go, but rather getting to the deal that’ll go the farthest for your business.
So take these tips to heart. Your small business will thank you.
- License: Creative Commons image source
Matt Faustman is the CEO at UpCounsel. You can follow his business insights on Twitter at @upcounsel.