Strong negotiating skills can be invaluable in the business world and, as an entrepreneur and small business owner, cultivating and improving your abilities to negotiate will lead to more favorable contracts and business relationships. Follow these four steps to gain an advantage in your negotiations and ultimately improve your skills of persuasion.
Step 1 – Research and understand your opponent’s motivations. Separate their wants from their needs. Differentiate and understand what points of negotiation they cannot live without, and which ones they will use to bluff you into believing you are winning when they are really pulling one over on you.
Step 2 – Identify your motivations, and be candid and honest with yourself. If you lie to yourself about why you want something, it will only serve to hinder your chances of getting what you need out of the negotiation. Identify what items you need to have in the agreement, what items you want to have, what items you can live without, and what items you are willing to sacrifice if necessary to negotiate better terms and assure that you get what you need.
Step 3 – Plan your strategy. All of the information you obtained in steps one and two will guide you in planning your strategy. If you were diligent in your research in step one, and honest in your identifications in step two, your strategy should essentially write itself. Plan out your starting point (your opening offer), and then consider how you can and how you will respond to your opponent’s offers and counter-offers. Next, create an exit-strategy by identifying the three crucial closing situations where you will know when it is time to (1) agree and strike a deal, (2) agree that the negotiation has reached an impasse but may be revived in the future, or (3) end negotiations altogether and walk away.
Step 4 – Execute your plan. If you execute your plan, and your plan was well prepared, there will be no need to look back and second guess your decision making process. You will walk away satisfied with the outcome, no matter which exit-strategy identified above you ultimately engage. If you agree and strike a deal, you will do so with the knowledge that you have agreed to the best deal you could have negotiated. If you agree that the negotiation has reached an impasse but may be revived in the future you will have gathered additional information to use during the next round of negotiations that will assist you in striking the deal you are looking for. Or, if you end negotiations and walk away, you will know that the deal was not meant to be, and you made a wise decision by choosing to seek what you need elsewhere instead of entering into a less than desirable agreement or wasting further time and resources engaged in unfruitful negotiations.