Starting a small business is a challenging undertaking. While new companies sprout every minute, the business world runs on the “survival of the fittest” theory.
Fierce competition, lack of qualified workforce, compromised cybersecurity, lack of financial management, constant changes in the market, contingencies, etc., emerge as the everyday challenges. No doubt, only a handful of businesses tend to survive.
The businesses that survive credit their success to varied factors, one of which is their negotiation skills.
Any business of any size requires competent negotiation skills to endure the challenges of the business world.
If you are a small business owner who lacks competent negotiation skills, these tips might help you.
- Build a good rapport
Having a good rapport takes you a long way in the business world. Having a good rapport with the vendor establishes good communication, which makes way for better negotiation.
Communicate with your vendors and be approachable and responsive. It will give you a competitive edge over others.
- Know where you stand
A little introspection before negotiation will help you know your position. Before you sit at the negotiation table, answer a few questions, like what is your budget? What is your deadline for closing the deal? What are the alternatives available at your disposal? Is walking away an option? What if the deal doesn’t go as expected? Is there a plan B?
Answering these questions will put you in a better position to negotiate.
- Consider the other side
Negotiation is a two-way process. While you focus on retrieving the most beneficial deal, things may never work out if you disregard the other side.
To know what the other side wants, review the proposal document or contract, previous email conversations, and notes from your past calls or meetings.
You can also try taking cognizance of their strategic goals by visiting their website or reading news articles about them. Or, reach out to their old clients and gather as much information about them as possible to prepare yourself for the negotiation.
- Listen to them
If you hear them out, they will listen to you; as simple as that.
When having a complex negotiation, parties tend to focus on counter-argument. Instead of thinking about the rebuttal, focus on what they are saying. While they speak, repeat the main points they just said to make them know you are listening.
This strategy will establish a favorable feedback loop.
- Be firm at the finance game
If you keep your cash reserve ready, you get the upper hand instantly. If you can afford a higher advance, the vendor is more likely to succumb to your demands. But educate yourself on the payment terms. Try to pay more than half of the total sum as a deposit.
- Try to avoid fatigue
When the negotiation process takes longer than expected with no signs of agreement in sight, fatigue sets in. However, it is a blessing in disguise.
The opposite party may be willing to make concessions to conclude the negotiation quickly. You can use it to your advantage by coming prepared to the table. Book your travel accordingly, keep the venue comfortable, and take breaks to ensure that your energy and concentration levels remain high throughout the process.
These tips may sound vague, but they go a long way.
The bottom line
Negotiations are won by strategies, but other factors play equally important roles. Coming prepared to the table and being willing to endure a long negotiation process also better your chances to close a beneficial deal.
So, while you practice negotiation exercises, take some time to reflect on these tips to get 360-degree benefits.