Most business owners develop their negotiation strategy in the crucible of the real world.
It doesn't take many sour deals to teach an entrepreneur what works – and what doesn't – in their negotiations with suppliers, clients, employees, and other parties.
But here's the problem: Although learning negotiation skills through trial and error is effective, it comes with a high price tag. Even a single failed negotiation can have a devastating impact on your company. That's why it's critically important for business owners to become students of negotiation strategy, paying especially close attention to the do's and don't of negotiation that have been passed down through the learnings of experienced entrepreneurs.
- Set goals. It's important to clarify your goals and desired outcomes before you begin negotiations. If you haven't given much thought to what you hope to achieve through negotiations, don't be surprised to walk away from the process disappointed. Set high goals, but also be clear about the minimum outcomes you are willing to accept.
- Define thresholds. In addition to knowing your own bottom line position, you'll want to make a concerted effort to assess the other party's bottom line. Once you get a sense of the threshold that they won't cross, it's easier to influence the outcomes in your direction.
- Follow negotiation etiquette. Professional etiquette requires all parties to maintain a polite and courteous attitude. If you want to be taken seriously, approach the negotiation process with a willingness to compromise and to hash out a win-win outcome.
- Don't avoid conflict. Conflict is an inherent part of a negotiation process. Accept the fact that your interests are in conflict with your partner's interest so you can roll up your sleeves and begin the hard work of identifying a solution that is acceptable to both of you.
- Don't be intimidated. Some people rely on intimidation to get their way in negotiations. Don't allow yourself to be intimidated by someone who raises their voice or disrespects you, but require the other party to provide substantive support for their claims, preferably in the form of quantifiable data.
- Don't lose your cool. Negotiations can be emotional. But when you allow your emotions to control your negotiating strategy, you relinquish power and handicap your ability to control the outcome of the process.