Learning the business skill of negotiation can help you save money, earn revenue, and get exactly what you need and want. Unfortunately, negotiating isn’t always fun. There’s usually money involved. You have to give up something to get something – and that can lead to disagreements and, ultimately, the loss of a client, vendor, employee or some other individual critical to your business success.
Negotiating business terms isn’t rocket science, but it’s a business skill that can be learned, refined, and used more effectively as you develop more experience.
Here are some negotiating tips to give you a leg up the next time you sit down to talk business.
First, make a good first impression. According to a study published in the Journal of Applied Sciences*, the first five minutes can determine the outcome of the negotiations – even if they go on for weeks!
During the first five minutes of negotiations, both sides size up the other negotiators and exchange useful information. Sometimes, decisions to continue negotiations are made before your first sip of coffee. During the first five minutes of negotiations you’ll be evaluated – and so will your negotiation skills.
You’ll also evaluate the other side during this critical time. Be relaxed, confident, friendly, and open-minded to set the tone.
Know your acceptable terms before negotiations start. Prioritize your “must-haves” from your “nice-to-haves” in order to offer concessions during negotiations from your nice-to-have-list, but don’t give up a must-have. Know what you can and cannot accept.
Make the first offer. By setting the bar, you set the range of negotiations. You set the starting point.
Never accept their first offer. That’s why they call it negotiating. Chances are, your negotiating associate comes in high and can be negotiated downward in your favor.
Always ask for more. If you start your offer at the “acceptable level” there’s nothing to negotiate. High-ball the numbers so you can find a comfortable middle ground.
Use body language. Often, body movements reveal more than words, so when you’re negotiating, slump a little at the first offer. Sigh. Shake your head. Then, politely say, “I can’t do it.” Deliver your disappointment using body language.
Don’t say anything. Listen carefully to the proposal, inform the other person that the terms aren’t acceptable, then don’t say anything. There may be a long, long uncomfortable silence, but the first parties to speak are the parties willing to move their positions. Don’t say anything after turning down an offer. Wait.
Create urgency. “We have to make a decision by Thursday” creates a deadline, whether it’s real or simply a negotiating tactic. Car dealers use it because it works.
Don’t give something for nothing. In a good negotiation, both parties get some of what they want. If the other party asks for a concession, ask for something in return that will benefit your business.
If the negotiation doesn’t turn out exactly the way you’d planned, give some thought to what you could have done differently, and learn from your mistakes. This will help you prepare yourself for the next negotiation so you can get the best terms for your business.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.