Anyone who owns a small business knows the importance of having good negotiation skills. It’s the ability to create a situation where both parties leave the process feeling they each got what they wanted. This is a skill that, once developed, will lead to positive relationships with both customers and vendors. Knowing how to negotiate can create new business opportunities.
According to an article in Entrepreneur Magazine, “While experienced negotiators sometimes refer to their methods as the “negotiating game,” it’s really a misnomer for a process in which the stakes are often extremely high. Check your ego at the door and keep your eye on the big picture at all times. This is all about business.”
Prior to entering into any type of negotiation, it’s important to know the desired result. This could include everything from a specific price to guaranteed delivery dates and more. These goals should be part of a company’s long and short term strategy. This will enable a company to know what they’re willing to concede, and what they’re not.
A skilled negotiator will knows their situation, and that of the other party, prior to any negotiations. This is a proven way to capitalize on the other party’s weaknesses, and the company’s strengths. It may be valuable to speak with others who have previously negotiated with the other party. This could provide important information on their style and negotiating pattern. It could identify when the other party will bluff, and when they’re serious.
A successful negotiator will know what they’re willing to give up during the process. This will let them know in what areas it’s possible to compromise and be open to new ideas. Flexibility enables a negotiator to focus efforts on getting what is most important during the process. This will make it possible for both parties to avoid issues that could be potential deal-breakers.
An experienced negotiator will only make an offer when they understand the details of the deal. This is an extremely important aspect of negotiating. Once an offer has been made, it could be the basis for a formal agreement and a written contract. The specifics of this agreement must be understood by both parties, prior to a contract being presented. At this critical stage, a small misunderstanding could ruin a good deal.
One of the most difficult lessons to learn in the art of negotiation is when to walk away. Too many times, people have dragged out the negotiation process and simply repeated what has been previously discussed. When both sides aren’t able to get past issues that are important to them, it’s best to walk away. It’s a struggle to leave behind a large amount of effort, but it can be the best solution. In time, one party may figure out a possible compromise.
A knowledgeable negotiator will have a sense of when it’s time to close the deal. They will have previously thought of how things should end. When that situation enters the picture, they move on it. They will know which issues are arbitrary to both sides, and what issues will impact the desired result. The offer to close a deal will only be successful, when it is done at the right time.