Do you always get your own way? Or are you more likely to go with the flow, and react to events? As a business owner, knowing how to negotiate and win people over by steering them in a direction that suits you can be a very useful skill. It doesn’t matter whether it’s your work peers, staff, suppliers and customers, even potential investors or funders, being able to negotiate effectively can be the way to seal a deal, or make things go your way.
Focus, prepare – and be first
To be triumphant in a negotiation you need to know what you want to achieve at the outset. This will also give you more confidence going into a discussion, so take some time for preparation, weighing up what the ideal outcome would be, and also the bare minimum you’ll accept.
Decide the point at which you’re prepared to walk away from the conversation. If it involves money, this is likely to be a figure below – or above – which you’ve calculated you won’t go. Know ahead of time your parameters, and don’t budge from them – unless you’re made a stunning offer you didn’t foresee.
Do thorough research to make a strong, and persuasive case. The more data you have to hand to support your position, the better your chances will be of a positive result. Give a succinct summary of your stated aims. Have questions that you want answered, and your own anticipated answers well practised. Even run through your own delivery beforehand if you feel nervous.
Be the first to make a move. The person who suggests having a conversation about a deal, contract terms, or any discussion is at an automatic advantage. You’re laying the ground rules, and studies suggest this can result in things going in your favour. Lay out your core points early on – experts call this ‘anchoring’ – and then you’ve potentially influenced the way that all other subsequent information will be considered.
Take legal advice ahead of the meeting if any contentious issues are to be discussed. If you’re negotiating a contract with a big retailer, for example, it could pay to invest in a lawyer’s advice to be sure you know your position before you go in.
Who, what, and why?
Think about the person or organisation with which you’re negotiating. Even if it’s a larger entity you’re dealing with, you’ll still be facing a human being, so personal chemistry is likely to play a part.
You want to develop a rapport with your counterpart – angry exchanges rarely produce satisfactory outcomes – so be courteous, even friendly, if it’s appropriate. But, always remain professional, and firm in your purpose, and delivery. If things are getting heated, or are going in a direction you don’t like, suggest a break to calm down, and reassess your options.
Try putting yourself in the other man or woman’s shoes. What do they want? What’s their limit? Are they focussing on what they and their organisation really needs, or is emotion driving their arguments, and responses?
What’s incentivising your discussion partner? If you’re talking about sales with a company employee, and the person’s compensation is linked to the outcome, it’s a very different scenario to dealing with a business owner taking a longer-term view about profit or growth, and who also has genuine final say in any decision. Tweak your delivery for your audience. Once you’ve got an idea of who an individual is, and what motivates them you might have a better plan about how you can win them over.
Show and tell
While you should have all of your facts to hand, don’t read from a pre-prepared script. You want to appear fluent, assured, and natural, so have some notes nearby, but use them as prompts rather than a strict template for the conversation.
How you present yourself physically also matters. Apart from obvious things like attention to dress and personal grooming, your body language will say a lot to another person about your determination, manner, and confidence. People who are physically expressive come across as being passionate about their subject, which can be very winning, and persuasive. Academic Albert Mehrabian famously estimated messages are transferred 55 per cent by body language, 38 per cent by tone of voice, and just seven per cent by actual words, so be aware of how you come across in person.
Even if your chat is taking place on the phone, impressions count. You can hear when a person is smiling, so do so – be upbeat, friendly and enthusiastic. Using physical gestures while you’re on the telephone isn’t a waste either. Research suggests that people use a broader vocal range if they use their hands when they talk. Negotiation experts the Gap Partnership has even devised an infographic giving tips on how to influence over the phone.
Listen and learn
It’s not just good manners to give people your attention when they’re speaking, it’s good business. A conversation has to go two ways, so really listen to what your fellow negotiator has to say. Make your opening bid, then be prepared to shift, while still retaining the fundamental line beyond which you won’t stray. This is a negotiation, after all, so show that you’re willing to bargain, see things from the other person’s perspective, and work with them. Once you appear to have reached an agreement, rearticulate it to make sure you’re on the same page, then get things in writing as soon as possible.
The most important thing to remember when entering any negotiation is to know your worth. Just because you’re a small business, it doesn’t mean that you don’t have bargaining power. Even if you’re up against a big company or organisation, remember you may have expertise they need, information or intellectual property that would be valuable to them, or strong links to other businesses they would like to exploit. If you’re haggling with a business partner, consider what you personally bring to the company. When dealing with suppliers, don’t forget they need you, at the same time that you want to maintain a good ongoing relationship with them. The key here is to find a fair deal for you both. Investors or funders want evidence that you’ve got a strong business with a good plan for the future, and growth prospects. Through it all, your own and your company’s value should never be far from your mind. Instilled with that confidence, the art of persuasion should be yours.