In business negotiations, there are winners and losers and you always want to come out on top. Or at least, that’s what they told you. In reality, negotiations shouldn’t have winners and losers. There is only one relevant metric to measure how successful a negotiation in business was: How happy are both parties? That’s not to say you shouldn’t have a strong negotiation strategy in place, though. But there is a middle ground to be walked, so finding the best negotiation strategies to help you seal the deal AND keep both parties happy is of the utmost importance.
Defeating The Old Business Negotiation Myth
The idea that in business negotiations there will always be winners and losers is outdated, and heading into any negotiation with this notion is a surefire way to ensure that your negotiation will be unsuccessful.
As a business owner you’ll have no doubt entered negotiations with people like this in the past. And we can almost guarantee you found the whole process frustrating and unproductive.
That’s because if you enter a negotiation with the idea you have to win, and the other person has to lose, you effectively turn your negotiation into a stubborn explanation of why it’s your way, or no way. And that will lead to the other party walking away because they weren’t listened to and their perspective was never taken into account.
Essentially, seeing a negotiation in such simple terms as winners and losers means you’re no longer negotiating at all. A negotiation is a discussion, a sharing of ideas, with a successful conclusion for both parties. Try to walk all over the other party, and they’ll walk out the door.
So, with that first negotiation strategy in mind – removing the idea of winners and losers – it’s time to look at other strategies to make your negotiations more successful.
1. Know Your Dream Outcome
Just because good negotiation involves compromise, doesn’t mean you shouldn’t know what the perfect scenario for your business would look like. Of course, the likelihood of this happening is slim, because it’s essentially asking yourself: ‘What would the ideal outcome of this negotiation be for my business if my negotiation partner simply sat and agreed with everything I said?’.
It probably won’t happen, but it’s important for you to outline what this outcome would be. That way, you can start to better understand your position before entering the negotiation.
2. Consider Their Dream Outcome
If knowing your dream outcome will help you better understand your position before negotiations begin, then it follows that knowing your negotiation partner’s dream outcome will help you better understand theirs. Ask yourself: ‘What would their ideal outcome be for their business if I sat and agreed to all of their terms?’. It will help you understand how they might enter the negotiation.
Unless both of your dream outcomes are exactly the same, this dream outcome won’t happen either. But being prepared for a negotiation means knowing both what you want, and what they want.
3. Create ‘Plan B’ Scenarios
As a business owner, you’ll be used to creating ‘plan B’ scenarios. It’s good preparation for when things don’t go precisely the way you had hoped, and it’s the mark of a good business. And the same applies to negotiations.
Now that you know your dream outcome and their dream outcome, before you even enter negotiations you should know which ‘plan B’ scenarios that satisfy both of your wants you would be happy with. That way, you can better enter the negotiation with an outcome in mind that still leaves you happy at the end of it. Failing to do this could mean you’re led astray by your negotiation partner.
4. Discuss The Negotiation Process
Another good negotiation strategy to help you seal the deal is ironing out the details of the negotiation itself. Discussing:
- How it will take place – online, in person, over the phone
- Where it will take place
- When it will take place
- Who will facilitate the process
- What ground rules will be in place
- Who will be involved and at what points
- What main points need to be discussed in each meeting
will all help both parties prepare for the negotiation. Failing to do this can lead to lengthy negotiations that never seem to reach any positive conclusions.
5. Set Realistic Deadlines
In a similar vein, you’ll also need to discuss with your negotiation partner some realistic deadlines – and then ensure both parties stick to them. Bear in mind that any deadlines you set should allow both parties time to discuss the results of each negotiation with the relevant people before signing on the dotted line, so to speak.
Make sure the process doesn’t drag out too long though. In business you can always use more time, but a deadline helps speed up the process and ensure both parties can set realistic expectations.
6. Know Your Competitor
Perhaps the most important part of any negotiation strategy is research. Before you enter the room with the other party, you ought to know as much about them as possible. Yes, this involves their dream outcome, but it also involves their business values and aims.
This information will prove vital in informing how you negotiate during the negotiation. If you know your negotiation partner then you can set out more clearly how working with your business can benefit them and align with their business values and aims.
7. Know Your Non-Negotiables
Just because you’re heading into the negotiation with greater flexibility doesn’t mean you ought to head into it ready to concede to all of the other parties’ points. Having your non-negotiables clearly laid out in your mind ahead of the negotiation means you won’t compromise on the areas that are most important to your business.
Don’t share these with your negotiation partner until absolutely necessary. You have more chance of reaching a compromise naturally. Saying something is non-negotiable before the negotiation even begins could make you seem like someone who isn’t capable of negotiating at all.
8. Think Body Language
In business negotiations, confidence is 90% of the battle. Walking into the room and letting your body tell the other party that you’re prepared is vital. Shoulders back. Head up. Open and willing for discussion. These are all important signs you ought to be giving off when you enter a room for a negotiation.
And if you aren’t feeling particularly confident: fake it. Truly, more business owners that you realise get nervous before negotiations – especially if the outcomes of which are especially important to business operations and growth moving forward. But by simply pretending to be confident, you’ll carry yourself in a much more convincing way.
9. Use Their Ideas In Your Words
This is one of the most persuasive things you can do in a negotiation. It’s important that you take the time to sum up their ideas, but using your own words. That’s not to say you’ll say they said things they never – that’s unethical and it will only serve to irritate the other party.
But if you’re able to paraphrase their key ideas in your own words then you’ll be able to get them to agree with you. Do this early and you’ll have already set yourself up as a person who listens to their ideas and understands them, and, crucially, make yourself somebody they can agree with. And if they can agree with you on one thing, they can agree with you on others…
10. Be Patient
Patience is everything in a negotiation. Expect some pushback on your ideas, expect them to take time to mull things over and discuss your propositions – after all, they have to make sure this deal is just as beneficial to their business as you hope it will be for yours.
Patience shows that you’re a calm and collected negotiator. It shows you’re in control and you’re used to the negotiation process, and therefore you’re somebody they can follow throughout the process.
11. Build Rapport
Yes, the main reason the two parties are even negotiating is because there is a potential deal at the end of it that benefits both of your businesses, but that doesn’t mean you can’t get friendly throughout the process and build a rapport.
People are far more likely to do deals with those they like and trust, and the best negotiations happen in comfortable environments where both parties feel they can bring ideas to the table. Listen to these ideas and be respectful. The key to a successful negotiation strategy is being able to be kind to the people, and strong on the terms of any deal.
12. Take Breaks
Taking breaks is important in any negotiation. It gives you the necessary break from the other party whilst the meeting is adjourned, meaning you can sit with your team and employees and discuss progress, and maybe even get ideas from those around you on how you might proceed to a successful business deal.
It’s been proven that business negotiations that take breaks actually reach a successful deal far quicker than those who try to ‘power through’. Frustrations will only rise without regular breaks, so take them to keep a clear head and move towards sealing the deal quicker.
13. Use Your Team
You should be using your team for ideas, of course, but you should also use them in the negotiations themselves. They’ll notice things you don’t, have ideas you don’t, and help strengthen your case to the other party.
And don’t be afraid to mix up the line up in the negotiation. The more options you have on your team the better. Different members might be better placed to negotiate different elements of the deal, and they’ll also have different ideas to share with you afterwards. When setting out the negotiation process, think about which members of your team will be most useful and when, and let the other party know who to expect in each meeting.
14. Bring In Impartial Third Parties
Sometimes negotiations can prove more difficult than either party expected. In these cases, don’t be afraid to suggest using an impartial third party to help move negotiations along.
Find another person the two parties trust, and have them sit in on the meeting and sum up both of your ideas. You may find a deal can be struck when it’s summed up by someone else.
15. Be Ready To Walk Away
You should never enter a negotiation with one foot out of the door. But you absolutely should be willing to walk away if a deal can’t be struck, otherwise you’ll end up making compromises to make the deal happen that you won’t be happy with.
As a business owner you’ll be used to making hard decisions, and one hard decision you might be forced to make is walking away from the table when negotiations are not proving useful to either of you. After all, the sooner you stop this negotiation, the sooner you can start negotiations with another business that aligns more with your goals.
Negotiation Strategies To Help You Seal The Deal: Conclusion
Having a good negotiation strategy essentially means you are:
- Well prepared
- Clear on both of your goals
- Clear on the process
- Willing to listen to your negotiation partner’s perspective
- Ready to communicate effectively
- Willing to try something new
- Prepared for success AND failure
The best negotiation strategy is one where you can be firm on the things that are really important to you and your business, but flexible on things that may mean more to your negotiation partner than you.
Remember, if both parties walk away from the process happy, then it’s been a success. It isn’t about winners and losers, one party getting their dream scenario and the other being left with nothing. It’s about compromise and building rapport.
Learning the art of negotiation is a vital skill for any business owner. Get this right, and you’ll be giving your business an edge on the competition, and setting you apart as a business owner that others can have successful negotiations with. And that sort of reputation is invaluable in business.