If you’ve recently started a new business or have joined a start-up or scaling business, you are going to have to have to sharpen your negotiation skills to achieve success.
It is certainly not the case that all good negotiators are either unscrupulous car salespeople or members of the UN Security Council. Negotiation is a vital part of life and for those with children, you know exactly what I am talking about.
However, acknowledging the need for negotiation does not guarantee proficiency. There are a few techniques I coach the people who attend my workshops to help them improve their negotiation skills in this area and hopefully they will help you too.
There is no need to enter into a negotiation with an investor or supplier as a closed book. You certainly don’t want to give away your trade secrets and undermine your position by revealing your strategy.
However as we know, people tend to respond well when a meeting starts positively. So if you are willing to trust the person you are negotiating with some information, whether that is about your company or yourself, it can build trust and establish a positive tone.
Preparation is key in any business communication but it is especially important in negotiation.
Very often you will find negotiations meandering away from the original focus; some people use it as a technique to achieve their desired result. If you haven’t prepared for a range of outcomes and any number of different questions you can find yourself in a situation you were not expecting.
Before you enter any negotiation, you need to be acutely aware of what you want. You should have researched the person or people sitting opposite you and tried to understand their needs, as well as any strengths or weaknesses they may have.
At this point, get some advice from your network. Chat to your advisory board and get a handle on what a good outcome would be for both.
Know when to walk away
Understanding when you need to walk away from a negotiation is part of your preparation, but it should be an essential element of your strategy.
No one with any business intelligence is going to give you what you want at the point of asking and if they do there is generally an issue. So you need to know at what point the deal won’t work for you.
If you are discussing with potential investors to fund the next part of your growth, you will be keen to get the funding on board, that would be natural. However – and this is one of the most challenging aspects of this process – you need to have the confidence to say no. If the money isn’t right or the conditions you are signing up to are too onerous, while it might seem like the only option, you need to respect yourself and your company enough to be able to walk away.
Prepare to compromise
As part of this process, you must prepare for compromise. While you will have your ‘walking away’ point, you cannot enter into any negotiation without the knowledge that along the way you will need to find a compromise.
Knowing this is coming, you can be somewhat tactical with this and use it to your advantage. If you’ve done your homework, assessing both market conditions and your opposite number, then start at the extremity of your position and work back. This approach will ensure you achieve something within the parameters that you anticipated.
Find a win-win
Finding a situation where both sides feel like they have succeeded is not easy. However, business is built on relationships and to find greater success and more meaningful results, you need to use your emotional intelligence to find a resolution.
If you begin with the mindset that no one needs to lose for you to win and that both sides can benefit from the situation, then you will almost certainly find a more amicable solution.
Negotiation doesn’t have to be tough
Having good negotiation skills does not mean you need to become Kofi Annan or to bully others into submission to achieve success. You need to prepare well; you need to earn the trust of the other side, understand where a deal is no longer beneficial for you or your business and ultimately find a win-win for both sides.
If you can follow this approach, you are well on your way to achieving a good result.