Regardless of the type of business or size of your business, you may find that you will need to do business negotiations every now and then. These negotiations need to be done skillfully.
Skillful business negotiations can help you to obtain what you want for your company and establish rapport with other companies.
Whether you’ve already experienced some negotiations that you feel could have been improved, or you’re planning to negotiate in the future, developing the negotiation skills of your employees and yourself can make a tremendous difference.
These tips below will improve yours and your employees’ skills on how to negotiate in business.
1. Set Specific Goals
One of the issues that many people encounter in business negotiations is that they have not set specific goals for the conversation.
They may know that they want to negotiate a lower price on warehouse stock or that they want to establish a better trade agreement, but they might not have yet defined “lower” and “better.”
Before entering into negotiations, set specific goals so that you have a defined focal point for the conversation.
This negotiation process also allows you to assess if you’re reaching your goals in negotiations; if you don’t have goals, you cannot then assess them.
2. Create Reasonable Expectations
You are setting your company up for a great deal of disappointment and potential failures if you don’t set reasonable expectations from the start.
While you may not want to think about everything that could go wrong with the negotiations, you simply have to.
You need to consider what you will do if the company decides to pull out of the negotiations before anything official.
Another issue could emerge if the other business breaks its part of the deal.
While you may think that a contract will entirely protect you, you should also recognize that some businesses may be willing to suffer legal ramifications, if these ramifications will not exceed the damages caused by remaining in the contract.
3. Conduct Research
Having a successful negotiation process often involves conducting research on the business.
If you have associates who have worked with the company in the past, ask about strategies employed and how successful the negotiations were.
Just as your company is planning out a set of tactics for smoother operations, be aware that other businesses employ the same techniques.
Knowing what the other business might say and do does not guarantee that you’ll get exactly what you want in the deal, however, it suggests a higher success rate.
4. Stick to Serious Inquiries
While you’re researching the company, you should also get a sense of how serious the business is.
Simply put, you do not want to waste your time with companies that are just casually looking into possible prospects.
You want to make sure that the businesses are ready to make a deal with you.
Some companies might tell you that they are just conducting preliminary research and are far away from making any sort of commitment.
With other businesses, you may need to ask a series of questions to get this information out of them.
5. Know Your Limits
Part of the negotiation process often involves giving up some of what you want in order to get the more important elements.
Once you’ve defined your goals for the meeting, you can prioritize the items on your list.
While you might start by asking for everything, know the smaller items that you’re willing to surrender for the sake of the bigger picture.
However, in order to generate success for your company, you need to know where to draw the line.
In other words, if you give up too much of what you want, you aren’t having a successful experience.
When you are conducting research on the other company, you will likely gain some valuable insight into what the representatives might ask you to give up.
6. Start Big
While you should know what you are willing to surrender in the negotiations, the other party should certainly not be aware of that information until you are ready.
You must start by asking for exactly what you want.
You do not need to come across as demanding.
Exuding confidence in your requests can make it less likely that the other parties are able to see through the exterior.
7. Keep Your Budget Secret
If you consider even fairly low-level negotiations, you’ll recognize the importance of keeping your budget a secret.
For example, imagine a newly engaged couple who goes to meet with a band with the hopes of hiring this band for the wedding.
The band may start by asking what the couple’s budget is for music.
Then, the package can be tailored to that budget.
However, if the couple had not revealed their budget, they might have then received the same services for less money.
In this scenario, a few hundred dollars might be lost.
Now, take this scenario and apply it to the larger negotiations that your company conducts on a regular basis.
Chances are that you will see how revealing your budget can cost you a substantial amount of money.
8. Build Confidence
In order to be a successful negotiator, you are going to need a high level of confidence.
Coming across as arrogant or rude is unlikely to help you in negotiations, but carrying confidence very well can.
Boosting confidence often comes from a series of small successes.
Therefore, you may want to start in low-stakes negotiations.
In the event that you are training employees how to become more skilled negotiators, consider having them start in more low-stakes environments as well.
After the negotiations, you can discuss the positives and negatives of the situation.
While you want to provide them with feedback on how to improve their negotiation skills, you also want to build their confidence in their abilities to negotiate.
9. Improve Articulation Skills
A negotiation conference is not going to go well when articulation skills are poor.
Just as you need to absorb what the other business is saying, so do they have to understand what you mean.
When other businesses are constantly asking you to repeat what you said, this occurrence might be a sign that you’re speaking too quickly.
Working on clearly articulating your thoughts can help you to have more efficient business negotiations.
While this tip might seem simple and small, consider how much information is lost if you aren’t being clear.
10. Choose Your Strongest Employees
You might want to be at all business negotiations yourself, but doing so could prove difficult when you are the leader of a large company.
Also, opportunities may arise at times and locations when you cannot be there.
While you do want more of your employees to learn how to conduct proper negotiations, you should send your strongest employees.
Conducting regular reviews of employees and engaging in work-shopping activities can give you a sense of who is at the top of the pack when it comes to employing the best negotiation tactics.
11. Learn to Listen
While moving up the confidence ladder, you might start to forget how important listening to the other person’s perspective is.
Listening is particularly important in business negotiations for a few reasons.
You want the other party to feel respected.
When you’re continuing on about your viewpoint with no regard for this other viewpoint, you are likely to show disrespect.
Also, you want the other party to listen to you when it’s your turn to speak.
On top of that, listening can help you to avoid asking repetitive questions later.
You might be eager to get to your list of questions, but by simply listening to the other party, you may realize that they have already been answered.
12. Recognize the Customs
In a world that is driven by a global marketplace, you cannot expect all of your business negotiations to happen within your own community.
Understanding the business customs and polite manner of speech in other parts of the country and in other parts of the world is necessary if you want to be successful when it comes to negotiation in business.
In the event that you appear unaware of how business operates in the other country, the company’s representatives might not have much incentive to want to work with you.
The same applies if you engage in rituals that are considered rude or inappropriate.
13. Exude Respect
You have to ask yourself why any company would want to work with you if you are disrespectful during the negotiations.
When you aren’t getting what you want in a conversation, you may find that you quickly lose your temper.
While you may think that this strategy will lead to getting what you want, it is likely to have the entirely opposite effect.
Employing respect at all stages of the negotiation is an important part of having a meaningful conversation with a fruitful outcome.
14. Learn Another Language
When it comes to negotiation in business, it is imperative that all parties are abundantly clear on what the deal entails.
If all parties do not speak the same language, then these details can become unclear in both speech and writing.
While you cannot train every representative from your company to speak every language, you can offer support in the necessary areas.
For example, if your business conducts many negotiations with a company in Japan, providing training in both Japanese language and traditions for your employees could better negotiations.
Another option is to hire proficient translators who will play a role in these negotiation conversations.
15. Get It in Writing
If you’re new to the skills of negotiation in business, you might think that a verbal conversation will suffice when you and another company are trying to better your businesses.
However, it is important that you always have the details of a negotiation put into writing in the form of a contract.
Otherwise, you are running the risk of merely pitting your word against the word of another.
Perhaps you have learned this lesson the difficult way from a failed verbal negotiation in the past.
Instead of allowing this situation to occur again, make sure you follow proper protocol next time.
16. Recognize that Other Offers May Exist
When you are trying to negotiate with a company, you might get so focused on that particular business and forget about other ones in the field.
However, the other company might have a number of prospects.
After the company’s meeting with you, the representatives might have a host of other meetings scheduled to see which opportunity is the right fit for them.
Realizing that your offer may not be the only one on the table can encourage you to act quickly.
This will turn a potential deal into a real one as soon as possible.
17. Consider Terms
In the event that the negotiations are successful, you also need to determine how long this relationship will last for.
Depending upon the type of negotiations, you may need to determine that information earlier in the process.
In fact, the length of the agreement could be part of the negotiations process itself.
Consider how long it will take for those results to come to fruition.
If you are working with a new company, consider a short-term agreement with the prospect to turn into a long-term agreement if the conditions work out well for both sides.
18. Develop Workshops
You may be trying to improve your personal business negotiation skills.
You may also be trying to improve these techniques on a company-wide level.
Developing workshops is an effective way to develop negotiation strategies in your business.
In-house workshops on how to negotiate in business will give you and your team an opportunity to practice and refine negotiation skills.
Workshops also present the opportunity to learn from external people.
For example, you could ask a professional in negotiations to give a talk or to lead a discussion on negotiations.
Sometimes, an outside perspective is what your employees need.
Create role-playing activities as part of workshops on how to negotiate in business.
You can develop scenarios that mimic ones that employees may encounter in real-life negotiations.
When employees are negotiating with one another, they might feel compelled to compete a bit and to win their negotiations.
These sessions can be used to help employees learn what to do and what not to do in order to have successful business negotiations.
19. Attend Conferences and Events
You can arrange for your employees to attend external conferences and events.
They may either focus on negotiation tactics or have units dedicated to these strategies.
Sometimes, getting out of the workplace is what employees need to have some perspective.
When they go to these events, they can mingle with professionals in the field and learn what it means to have the most successful negotiations.
Also, going to events and conferences that are specifically designed for your niche can bring a wealth of important information to your business.
20. Know The Technology
Meeting in person is not always possible, especially when businesses are working with associates on the other side of the country or the world.
Therefore, you may need to use a toolkit of technological devices to conduct these negotiations.
You don’t want your negotiations to fail because of faulty technology or employees who do not know how to properly use the equipment.
When you anticipate using a particular tool to conduct negotiations, make sure to implement proper training so that technological glitches do not lead to the end of your business negotiations.
Knowing how to negotiate in business will give you an edge in the marketplace.
Review these tips, learn from them and have a successful business negotiation.
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