Negotiation is a skill. It can be an essential and lucrative skill, depending on what you’re negotiating and how much is at stake. It’s a tool a small business owner should have in their personal toolbox.
You may be able to lower the price you pay for goods and services and increase the compensation for the goods or services you provide. Your successful negotiation may mean a valuable employee will stay with you, or the cost of your lease renewal will be more affordable than you expected.
What Is Negotiation?
As a mergers and acquisitions lawyer can share, negotiation is a way people settle differences by reaching a compromise or agreement. Both sides want the best possible outcome, but if they can’t achieve that, negotiation can result in the best outcome given the circumstances.
How Can I Be A More Effective Negotiator?
An article in the Harvard Business Review has some suggestions, including the following:
- Be Positive
How you frame a negotiation impacts the outcome. Do you focus on possible gains or losses? If you see the goal of the negotiation as an opportunity to achieve or advance something, you’ll probably be more comfortable with the risks before you start.
Negotiators with this mindset often gain more than if they’re trying to prevent losses. They extend bolder offers when negotiations start, leading them to better outcomes. Negotiators with more negative mindsets who see negotiation as a risk or a chance to lose are more conservative in what they ask for and end up with worse outcomes.
Before negotiations start, think about the gains you can secure. Your offer should be specific and bold. Go beyond an offer you’re comfortable with. You can always negotiate down from where you start, but gaining more than what you first asked for is almost impossible.
- Be prepared
As our friends at Focus Law LA would advise, do your homework before you start. Think about potential roadblocks and study the subject matter thoroughly. Have data to back up your position. Most importantly, know how your proposal (the outcome you seek) will be of value to the other side. They get benefits, avoid problems, or both.
Game plan the negotiation by thinking about the following:
- How the negotiation process will probably proceed
- What the other party might say or ask
- Their potential reactions and responses to your proposal
- Their likely objections and your responses
Your preparation could include dry runs with a colleague. They will help you prepare for the real thing. Take notes about what you should say if the party tells you or asks for certain things. You could also rehearse in front of a mirror.
- Make It A Conversation
When you talk to your friends, do you talk all the time? If so, you won’t have friends for long. You probably listen to them and try to understand their perspective. You should handle negotiations the same way.
Negotiations aren’t about imposing your will on the other party. Actively listen to what they’re saying and how they say it. Ask questions. Go beyond what they might or might not accept or propose. What are their needs and goals? What problems do they want to avoid or address? What opportunities do they want to exploit?
Knowing these things can help you tailor your pitch so it sounds like a better fit for them or change your proposal so it helps them reach their goals at the least cost to you. You’re not the only one at the table seeking a win.
If you’re negotiating something important, contact your attorney. They may be more skilled and experienced with negotiations. If you hire them for the job, you can save yourself some time and energy, and they may achieve a better outcome than what you could’ve reached.
