Wednesday, December 6, 2017

An entrepreneur’s guide to negotiating

Ultimately at some point in every business, we all need to negotiate. If you’re an employee, you might want to strike a better deal with your boss in terms of your pay and conditions. Or, you might be a sales person for whom the ability to negotiate is absolutely critical to getting a sale that works for both the customer and the company you work for.
As an entrepreneur with a wide variety of business interests, I come at this issue of negotiation from yet another angle – that being able to negotiate well is a fundamental part of growing your  business successfully. So, with that in mind, here are a few lessons that I’ve learned over the years about the art of negotiation – I hope that you find them useful.
  1. Listen
For me, this is the number one skill that any good negotiator has to have. Think about it – in any sales situation, the best outcome is a ‘win-win’ result (more about this in a moment). But in order to reach this point, you need to have a thorough understanding of what the other person actually wants. This is where good listening is essential. It may actually be more about what they don’t say that what they do – but you’ll never find any of this out if you’re endlessly trying to dominate the conversation. It’s also worth saying that by constantly talking you’re more likely to give some of your own bargaining position away, simply to fill the gaps. Let the conversation breath, let the other person talk, listen to what they say and respond to the underlying needs they are revealing, whether they realise it or not.
  1. Win-win
To some business people this might sound counter-intuitive – we all want to win, and if there are winners then there must be losers, right? Well, look at it another way – the other person is obviously more likely to want to strike a deal with you if they think that they are gaining something. Unless they’re under enormous pressure (or are just very poor negotiators), they certainly won’t want to be worse off as a result of dealing with you – so showing them how the deal you’re offering them will improve their situation (rather than simply trying to get the best you can for your business, regardless of the outcome for the other side) should deliver a better result for everyone.
  1. Show the other person how you’re going to meet their needs
Closely linked to the other point above, this is a fundamental part of any negotiation. Those of you who work in sales will of course be very familiar with this idea – that there is no sense in talking to a prospective customer about the features of your latest product without explaining them in terms of how it will solve the particular needs that they have. Someone who finds complex interfaces confusing is unlikely to be impressed by a lengthy sales talk about a mobile phone that highlights its hundreds of features. The same principle applies in any other form of negotiation – by actively listening to the other person you’ll have a clear idea of what it will take to satisfy their needs – and will be able to then explain that to them clearly and powerfully in order to reach a result that feels like a win-win for both sides.
  1. Don’t give anything away without getting something in return
Freebies, or unilateral offers rarely work. Regardless of any temporary warm fuzzy feeling that is generated between the two parties, giving something away without anything being given something in return will only weaken your position and strengthen the other person’s.
  1. Aim high – but also be prepared to walk away
This is a question of the attitude you take in to a negotiation – I strongly believe that you should be upbeat and optimistic in your expectations of what can be achieved. Aim to achieve even more than you would otherwise expect, and you may well succeed. That said, it’s also important that you are prepared to walk away without a deal being done – there is no point in reaching an agreement that is unsatisfactory for either party because ultimately it won’t last.
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