A special excerpt from the upcoming eighth edition of Entrepreneur Press’ ‘Start Your Own Business: The Only Startup Book You’ll Ever Need,’ available for pre-order now.
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The following is an excerpt from Entrepreneur Press’ Start Your Own Business: The Only Startup Book You’ll Ever Need, 8th Edition. Pre-order your copy today here!
It’s a lot easier to describe what negotiation “isn’t” than what it is. Let’s get some things straight upfront. Negotiation is not: A search for truth, justice and absolute fairness; a friendly discussion at the corner Starbucks; a quest for the perfect solution to a business problem.
Make no mistake: Negotiation is not a game, but sometimes feels like one. Whether sellers have paid good money for something or are emotionally attached to it, they’ll want to get the most money they can from its sale. Buyers are worried about losing money and want to pay as little as possible, so the chances of making a profit on a resale are as high as possible. Somewhere between these two goals, there’s a deal waiting to happen. The goal in negotiating is to win — to get the best deal you can. Period. Here’s how.
Be assertive and straightforward. You can aim high, even if you know you would be fine with a little less. Ask for $40,000 for the project, even if you are prepared to receive $30,000, which is still above the going rate for that project.
By researching the other party carefully, you’ll know what they want, need and exactly where they are coming from. What is important to their side in this negotiation? The more you know about them, the more leverage you will have. It’s important never to be blindsided, so do plenty of preparation.
Don’t take no for an answer. It doesn’t matter if this is the way the other party has “always” done business. If it does not fit into the way you’ve always done business, then something must change. There is no “standard contract,” so don’t back down and accept that it “has to be” done a certain way.
Once you have an idea of what the other side needs, and why they need it, you can decide how they can get what they want or need while you are getting what you need. Too many people are so focused on their own side that they forget the other person has wants and needs, too. This causes long negotiations that often end in stalemates with no one getting anything.
If you know what they want, you can determine if that will have any bearing on you getting your needs met. Sometimes what is important to the other side is insignificant to you.
Unlike the hurry-up world around us, good negotiators do not rush through negotiations. If they do, they end up leaving money on the table or making a deal that is not in their best interests.
In negotiations, there are things you must have, things you’d like and those extra things that you could take or leave. Know what’s important to you and what isn’t. This means you can compromise on items or issues that are not important to your needs, but remain unwavering on your must-haves.
Never let yourself feel that your back is against the wall and you must take what is on the table. Visualize yourself walking away and know it is a possibility. This will allow you to keep negotiating from a place of strength. Once the other side sees that you will walk if you have to, they will make concessions.
Ultimately, as any lawyer will tell you, you know a deal’s been well-negotiated when both sides walk away from the table feeling at least somewhat disappointed in the outcome, but not defeated.