How to be a better negotiator
As a business owner, there will be many times when you need to negotiate—or could at least stand to benefit from negotiating. You may need to negotiate with a supplier to get a better rate, or you may need to negotiate with a client who needs their project to remain on budget. For a few people, negotiating seems to come naturally. But for most, being a good negotiator is a learned skill. Here are some strategies that can help you improve your negotiation tactics and land a better deal.
Go in with a goal.
Don't simply enter a situation with the mentality that you'll "do the best you can." In order to do the best you can, you need to know what "the best" is! Sit down and think about your goals with this upcoming negotiation. In a perfect world, what would you see happen?
Many people benefit from setting their goals in three tiers. At the top is your reach goal—what you would accomplish in a perfect world. In the middle is your attainable goal—what you can realistically expect to achieve and would be happy with. At the bottom is your settle goal—a goal that, if reached, will satisfy your needs, although it won't have you cheering at the top of your lungs.
As an example, your reach goal may be to convince your supplier to sell you widgets for $5 each. Your attainable goal may be to buy them for $5.25 each, and your settle goal, to get them for $5.50.
Sometimes, it's better to negotiate on terms other than price. How else might you meet the other party's needs and also your own? Returning to the previous example, suppose your client won't come down in price and will only sell you widgets for $5.50. You could then propose that they send the widgets to you already unwrapped so you don't have to have your employees spend half a day unwrapping them. That would also save you money.
Be assertive, and state your needs.
Negotiating is no time to be shy. Don't beat around the bush. If you are up against a tight budget and don't have any extra dollars to spare, let the other party know. This way, you can move forward and explore solutions that will fit your budget from the get-go. Similarly, if there is a deadline you absolutely must meet, make this known immediately.
Remember, the worst someone can tell you is "no." It's worth asking for what you need.
Listen to what the other party needs.
Although your focus in the negotiations will be getting your own needs met, it is important to remember that the other party has needs to meet, too. Listen to what those needs are, and aim to collaborate on a solution that will work for you both. It really helps to think of negotiating not as an opportunity to win out over the other person, but rather as an opportunity to compromise and find the solution that works best for you both.
Work together, not against each other. That's what a good negotiator really does. If you treat the other party with understanding and compassion, they'll likely do the same for you.
It's okay if you were not born a good negotiator. Most people are not! With some practice and the tips above, you can still hone your skills and start making better deals. Be confident, ask for what you need, and remember to think of negotiations as a compromise, rather than a battle.