Most people dread negotiating without realizing that they regularly do so every day. You will encounter formal negotiations in your professional and personal life. Examples of such instances include haggling over the cost of a new appliance, discussing the provisions of a new job offer, and even drawing out a contract with your supplier.
Apart from the formal negotiations, you have the informal ones, such as convincing your client to accept a late delivery. As an entrepreneur, you must possess crucial negotiating tools and skills to remain competitive. By being a good negotiator, you’ll be able to secure an outcome that you and the other party are happy or satisfied with.
Ultimately, the essence of negotiation is for two or more parties to find an amicable solution to a problem, and to ensure you don’t get the short end of the stick, try to be in control of the negotiating process. We’ve put together some key elements of an entrepreneurial negotiation for you to look into. So put down your social media-ing, your online gaming and even your Ozwin login to play slots, and let’s get down to business.
1. Build trust
The first thing you want to do when negotiating is to build customer trust. With this, you will reinforce the legitimacy of your dealings. When negotiating, most people’s decisions are molded by how legitimate or fair they view the process. When one party feels like the other is trying to take advantage of them, they are more likely to reject an offer, even if it seems objectively beneficial.
To successfully negotiate a deal, you must forward a proposal others will see as legitimate or fair. Be willing and ready to listen to what the other party is proposing, as it will help them feel that their voice matters. Even if you ultimately settle on different terms altogether, they will feel like their opinion matters.
2. Create value
Within the free market structure, there are always alternatives. Therefore, something crucial to remember during negotiation is to create value. As an entrepreneur, you need to demonstrate why it is better to negotiate a deal with you and not other individuals or parties.
For this to pan out as intended, do adequate research. It will also help you realize other options to put forward to the other parties in case the negotiation you are currently discussing doesn’t meet your threshold.
3. Protect client relationships
It is in your business’s best interest to safeguard your business relationships, whether you are negotiating with people you have an ongoing business relationship with or not. Sometimes, you might be in talks with someone you perhaps don’t foresee working with in the near or distant future. Still, you need to manage the relationship as the ongoing negotiations unravel.
Maintaining a good relationship with everyone, even when you can’t reach a consensus, may work in your favor in future dealings. It will also help strengthen your reputation, encouraging your other partners and collaborators to want to continue doing business with you. Generally, you should intentionally build a rapport with them and maintain exemplary ethical standards during the negotiation process.
4. Understand the difference between Interests and Options
Interests are the key drivers of any negotiation. Your interests during a negotiation are your motivations, needs, and wants. Although your interests are usually unspoken, they guide what different parties do and say during the negotiation. Therefore, as a seasoned negotiator, you want to probe more into the positions your counterparts take.
Knowing what drives your counterparts’ decisions will help you understand their underlying interests, which will make it easier to negotiate successfully.
On the other hand, options are the various choices involved parties could consider to meet their interests. They include contingencies, trades, and conditions. Essentially, options capitalize on the similarities and differences between you and the other parties. Options are significant as they create value within the negotiation process and help to enhance satisfaction among concerned parties.
5. Partaking in simulations
Practice makes perfect, and if you want to become the best negotiator, you need to be in a negotiation room more often. Another way to increase your prowess is to participate in negotiation simulations to help you realize your strengths and weaknesses. Ultimately, you’ll be able to work on rectifying your mistakes and increasing your strengths to improve your negotiating power.
You can also assess past negotiations to see where you might have gone wrong and which areas were okay. A deep dissection will help you discover the glaring issue, saving you from repeating the same mistakes.
6. Learn the steps
The last key element for a successful negotiation is learning the steps that help create value in the negotiating process. The first step in any negotiation is to prepare for the actual process. After doing all the necessary preparation, proceed to the next step, exchanging crucial information with your counterparts.
The third step is the bargaining stage, where the “give and take” occurs. After you have bargained the terms, you will move on to the fourth step, the conclusion. Here, you will reach an agreement before moving to the fifth and final step, the execution stage.
Negotiations take place every day in the business world. Knowing the right thing to say and do will give you an added advantage and put you ahead of competitors in the industry. The tips outlined above will be essential in helping you successfully negotiate with potential partners and clients.