To succeed as an entrepreneur you need to also have good
negotiating skills. However, to become a truly successful negotiator, you have
to learn to put aside pure self-centredness, because if all you care about is
serving yourself, you will blow the deal before you even start.
Experts at entrepreneur.com describe negotiation as a
delicate balance of give and take. Learning to strike this balance is necessary
for any entrepreneur hoping to build a prosperous business. It takes time and
practice and a whole lot of patience to hone a winning strategy. And yet each
deal is unique and needs to be approached correctly, which is why a
one-size-fits-all approach will never work for long.
It is therefore important
to know and exhibit some of the skills that will make you more successful as an
entrepreneur in any venture of your choice. Entrepreneurs should know that
successful negotiations are built on solid prep work.
This means that you
may know something about the parties involved and have done a little background
check to know about their business and maybe you have even talked to others
they had worked with in the past.
This is mainly to get an
idea of their strengths and weaknesses. The same is true if you are on the
other side of the table and are looking to invest in a product or service. You
should have a solid understanding of the pros and cons of the commodity they
are selling or the service being provided. The bottom line is, you need to have
a good idea of who you are dealing with and what they can offer.
Entrepreneurs must should
always go into whatever form of negotiation with their best foot forward. You
should be well rested. You should have eaten something, as being hungry may
trigger anger unknowingly. You should show up on time so as not to walk in
feeling rushed. If you have done the above, you should be feeling positive,
knowing that you are going in clear-headed and confident. You will have the stamina
and energy to get this deal done.
While you are in and
set for the negotiation, consider all the details of the opening offer. This is
because the opening offer usually acts as an anchor for negotiations. It is
also where the details get hammered out, so it is important that this is done
carefully and thoughtfully.
Experts point out
that the basic elements of an offer include the offer price, the work being
proposed, what goods or services are included, when it will all be delivered
and if there are any performance incentives, warranties or terms and
conditions.
Obviously, price is a key
component to any deal, but keep in mind the other details. They can matter
nearly as much in the long run. If you are the one initiating the opening
offer, this is your chance to set the stage for the negotiations ahead and
start with the upper hand. You will not get what you do not ask for, so be
bold! If you are on the other side of the table, the offer is key to seeing how
close together you are. So know your bottom line, by deciding on what you are
willing to accept. And remember to take a close look at the details. What else
are you getting for your money and what else are you potentially signing up
for?
Put your ego and emotions
under control. It is important to note that while you should have confidence
and assurance because you have done your prep work, you also have to check your
ego at the door. Letting your emotions run the show will never serve you well.
In fact, you should be going in feeling as neutral as you can about the
situation. Leaving your ego behind will free you to think objectively during
intense bargaining. You can then negotiate from a standpoint of flexibility.
To be successful, you have
to be able to think clearly in stressful situations and be willing to work to
find common ground. If you walk in with a middle-of-the-road attitude, you are
more likely to strike a balance between getting what you want and not giving
away too much. On the other hand, you do not want to give something away
without getting something in return. Losing your ego and putting your emotions
aside will help you find right path forward.
For an entrepreneur
entering into high-stakes negotiations, it may be helpful to run through
possible scenarios with a friend or colleague. This will help you feel less
nervous and it may also show you objections to the offer that you did not think
of, or help you see a side of the deal that you did not consider.
Playing through the
scenarios, even if it is just in your own mind, may help you feel less attached
to the outcome. In order to treat the whole thing as a game, you should care,
but not too much. Having a little apathy will help you stay neutral and keep
your feelings in check. And remember, negotiations are like anything else, the
more you practice, the better you will be.
Understand your strengths
and weaknesses very well. Self-awareness is key when you begin negotiations.
You are essentially looking for the other side’s strengths and weaknesses. Not
in a cruel way, but to help you determine your next play. At the same time, you
must also be aware of your own strengths and weaknesses, so you do not allow
yourself to be exploited. Try to take an honest inventory of your strong points
and vulnerabilities. If your company is small, what is its growth potential?
Are you able to be more responsive to the market than a larger company? In
short, what can you offer that the other side cannot, and what can the other
side offer that you cannot compete with? Knowing where you stand on the negotiation
chessboard will help you determine how to land the best deal.
Another vital skill that is
needed when negotiating a deal is knowing when to walk away. When you enter
into a negotiation with the knowledge that you are willing to walk away if
things do not go as planned, you come from a position of strength. That is why
staying neutral is key to a successful negotiation. You cannot be bullied into
a deal if you just leave. But often we tell ourselves that this deal means
everything to us. Our ego is involved, and that weakens our position. It is
about mindset. You have to believe that if this deal falls through, you are not
losing an opportunity. You are keeping that space open so when a better
opportunity comes along you can snag it. If you force a bad deal to happen, you
are stuck. You are no longer able to grab hold of something better. And there
is no shortage of business out there. So if you are pinning all your hopes on
one deal, you may be killing future business.
Try to negotiate in good
faith. Whether you are negotiating a long-term business deal or setting up a
quick sale, it is natural to feel on the defensive when you begin negotiations.
We are all protective of our interests and we want to cut the best deal in our
favour. But if you are hoping to walk away with your reputation intact, you
need to practice negotiating with compassion and good faith. Engage in active
listening and really hear what the other side is saying and asking for. What
are the issues that are making them hesitant? Then make sure that you relay
your own priorities. This is the basis of a ‘win-win’ solution, when both sides
explore each other’s positions and walk away feeling heard and comfortable with
the deal that was struck. Even if it appears that you are on opposite sides, there
is usually common ground to be had. Maybe the other side has a different goal
or an opposing position. But if you look for it, you can usually find mutual
gains both sides will accept.
Experts at entrepreneur.com
advise that you should know how to close. Negotiations may feel like a game of
chance, but they are more like a game of chess. A successful negotiation
requires a good sense of timing and the ability to sense the other side’s next
move. If you have done your prep work and are bargaining in good faith, you
should have a solid idea of what they are looking to get out of the deal. And
of course, you should have a clear idea of your own bottom line. So you are
either working to bring the sides progressively closer, or the deal is going
nowhere. Ask yourself what the endgame is. Can the difference between both
parties be split? If both sides are close but a few numbers are hanging up the
process, what will it take to shake things loose? If you can strike a bargain
that makes sense, it does not need to be perfect.
It just needs to work
for both parties involved. If you can get to that point, you have set the stage
for the final handshake. If not, you have to be willing to walk away knowing it
just was not the right time. And mind you, there will always be another right
time, just have faith.
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