If you run a business for a long enough period of time, chances are you’re going to take part in your fair share of negotiations. Whether you are negotiating better shipping rates on your inventory items, a new contract for a valuable employee, or a corporate buyout on the scale of millions of dollars, being an effective negotiator is a perfect balance between skill and science. Though the skill portion of being a great negotiator is really more of an art and is something that takes a long time to hone and refine, the science portion of negotiating is something that can be learned. Not only will these 5 steps to effective negotiation help you achieve more from your discussions, but knowing them can also help you predict what the other side is thinking and allow you to positions yourself more effectively.1 – Know Who’s In Charge
One of the biggest mistakes you can make is talking to a middleman or an intermediary rather than the actual decision maker at your negotiations. Sometimes you’ll want to be speaking with the CEO of the company while other times the head of a department will do just fine. Know who you need to talk to and don’t settle for anyone else.
2 – Have a Clear Objective
If you enter a negotiation without clear goals and objectives already in mind, you are pretty much dead in the water. The best way to enter talks is to set a goal that is truly aiming for the stars and force them to negotiate you down from that point. It’s easier to resist a bad deal if you had your sights aimed much higher in the first place.
3 – Keep It Business
Sometimes it can be easy to let your personal feelings get in the way of business, but this is always a bad idea; especially while negotiating. If you are selling your family business, for instance, you may have nostalgia or personal pride standing between you and the right deal. Check your emotions at the door and conduct business like a pro or don’t bother showing up at all.
4 – Know Your Stuff
If you show up to a meeting without doing your homework, you will be eaten alive by the team that knows the facts. You simply can’t limp through a serious negotiation if you don’t know hard numbers or market research to cite, so make sure you have all the appropriate data collected. One of the best ways to come out on top in a negotiation is to be better prepared than the other side.
5 – Give Them an Inch
When you set your goals for the negotiations, you should factor in a “concession” point that you were comfortable with in the first place. That way, you can offer that “concession” if the need arises and create the illusion that the other side has won. This can lead to you getting the deal done on the terms you actually wanted because the other side is blinded by the concept that they “beat” you. This isn’t about pride; it’s about making the deal.