Small Business Owners – Master the Art of Negotiation

As a small business owner, you will need to negotiate on a regular basis. This could include negotiating contracts, getting better deals from your suppliers, as well as settling disputes between your employees and clients. So it definitely pays to have strong negotiation skills in your entrepreneurial arsenal. Let’s look at how you can do a better deal.

1. Determine exactly what it is you want

Before you enter into any negotiation you need to do a little bit of homework upfront. This includes being very clear and very precise about exactly what it is you want. Then prepare a bottom-line compromise position. Have very clear outcomes defined i.e. I want this outcome, by a certain date at x price. This gives you room to move in your discussions, starting with your ideal position and stop at the line in the sand that you have drawn.

It also pays to know what you can’t accept. Being aware of your limitations ensures that you will not, in the heat of the negotiation, accept a position that will put you at risk.

2. Ensure you are negotiating with the person who has the authority to say ‘yes’

There is nothing worse than going through a negotiation and then find out that the person does not have the authority to sign off on the deal. Simply ask at the outset, “who has authority to sign-off on this deal?” and go directly to that person.

3. Aim for a Win-Win outcome

Negotiations do not have to be adversarial. This is one of the biggest mistakes people make when negotiating. If you go into them with a mindset of win-win, and aim to satisfy each of the parties involved, you are much more likely to be successful and the deal is less likely to come back and haunt you.

4. Apply Proven Strategies

There are a few strategies you can employ to help you negotiate a better deal. But bear in mind, when employing these strategies, that you don’t want to make the party you are negotiating with feel like a loser. Win-win should always be top of mind.

Some excellent strategies include resisting your first offer – unless it is exactly what you want (sometimes simply putting your request on the table is enough). Another is to act reluctant and the other party may be inclined to up the ante based on your perceived resistance. Pretending to flinch can help you gain concessions. You can play dumb by saying you need to run it by someone else in higher authority and come back the following day saying that the ‘higher authority’ wants certain concessions. Another is to simply walk away.

If you are new to negotiating, try your newly learned skills out on smaller deals first. Preferably ones that don’t have much pressure attached. Then continue to build your skills so you are able to deal more effectively. Your business will be much better for it.