In the months ahead, as Brexit talks gather pace, “negotiations” could be a word that many of us grow tired of hearing. But negotiating is something most of us do every day, whether in our business or personal lives.
Negotiating means trying to reach agreement with others. It’s about finding a solution that suits both parties. However, if you’re up against a superior negotiator, you may end up with less than you hoped for. So, how do you achieve more favourable outcomes?
1.) Prepare properly
Sound preparation is essential. Decide what you want from the negotiation; know what alternatives are available and what you’ll concede if necessary. You must also understand what the other party wants, what they might give up and what alternatives they have. Before negotiating, practice answering any questions you’re likely to be asked and gather proof of any claims you’ll make, as it can strengthen your hand.
2.) Have a sound negotiating strategy
Lacking knowledge could undermine your position when negotiating, so do your homework on the other party. It can help you to decide how to approach the negotiation (AKA your negotiating strategy), which is likely to be different for each negotiation.
3.) Pick the right time and place
You need somewhere free of distractions, where both parties can talk openly. Leave yourself enough time, so deadline can’t be used as leverage against you. And avoid meeting too early or too late in the day – you’ll want to be at your sharpest. Very early on in the negotiation, explain what you hope to achieve, but don’t reveal any concessions you’ll make, as these must be negotiated.
4.) Believe in yourself
Lack of confidence can seriously undermine you when negotiating. If you’ve prepared well, have clear objectives and a sound strategy, you should feel confident. Aim to be firm but fair. Speak with clarity and authority. Avoid clichés, jargon and business peak. You must also get your appearance and body language right.
5.) Keep it friendly
Keeping the discussion friendly can help you to get what you want and win concessions. Be respectful and polite. Aim to build rapport – the tone shouldn’t be adversarial. Don’t issue ultimatums, make threats (however mild) or allow the conversation to get heated. Remain cool and don’t take things personally – even if the other party is rude or pushy.
6.) Listen carefully
Not only is this good manners, but you must also carefully consider the other person’s opinions if you’re to reach agreement. Don’t talk at or over them, instead, play an active role in sustaining a good conversation. And be patient, because negotiating takes time. Where necessary, seek clarification on things you don’t understand.
7.) Learn to recognise negotiating tactics
Much depends on whom you’re negotiating with and why, but seasoned negotiators can employ various tactics, especially when buying or selling, when they’ll be seeking to minimise or maximise price. Be prepared for someone playing hardball, but don’t allow it to affect your confidence or resolve. Don’t be bullied into revealing your bottom line too soon. Remember, there should be some room to negotiate on their opening offer.
8.) Be prepared to concede
But only if it’s the only way to reach an agreement, and only then – ask for something in return. So, for example, if they want a lower price, agree only if they buy more from you. If they want better credit terms, negotiate a higher price, if possible. Never volunteer concessions without negotiation. And never come across as desperate, because it will probably be used as leverage against you.
9.) Don’t be afraid to ask for concessions
If you feel you’re in strong position and close to agreement, ask for concessions. Make sure they have real value for your business, otherwise there’s no point. If you’re buying, you need to drive a hard bargain, but the deal must be fair to both parties if the relationship is to last.
10.) Walk away if necessary
No deal really is better than a bad deal. If you need time to consider an offer, ask for it. If you’re a long way from your objectives with no agreement likely, politely end the negotiations and part on good terms. They might later make more concessions to rekindle your interest. If you can’t come to an agreement that works for you and your business, look at other options.
Read our guide to minimising costs when starting and running a business HERE, which includes guidance on negotiating deals with suppliers.
You can Request a Quote or call 0800 028 1028 now to speak with an advisor about getting on top of your finances today to help your business navigate tomorrow.
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