Negotiation is a transaction between two parties and both parties have a veto power as regards the final outcome, so voluntary consent is required on both sides. It is a process of give and take where the actual conditions of a transaction are clearly agreed upon. It is the process or act of bargaining to arrive at a mutually agreement or objective that is acceptable to all.
Must We Negotiate?
Yes we must negotiate. If we don’t we will not get the best deals. In business you must negotiate if you don’t you are already losing money. Though a lot of entrepreneurs do not negotiate because they don’t even know how to, negotiation skills is a must for us as business men and women.
What Can You Negotiate About?
There are actually only nine subjects about which we can negotiate about. They are:
9. Process (who is going to do what to whom)
So if any of these comes your way as an entrepreneur, know that it’s time to negotiate. As an entrepreneur you will have all of the above subjects coming up from time to time of which you have to negotiate.
The Stages of Negotiation
Orientation and Fact-Finding: This is a very crucial stage. It prepares you for what is to come. This is where the saying, ‘‘Information is power,’’ holds true here than any other place.
Resistance: This is a normal part of any negotiation. Though it could be painful but it’s a good sign. Where there is no resistance it means there is no real interest in the deal.
Reformulation of Strategies: In planning your negotiation you must come up with a strategy but as you gain new data it’s wise to reassess earlier strategy. Some data’s like: What is the motivation of the parties to do this deal? What strategies worked? What didn’t work? These are things that will guide you to reform your strategy.
Hard Bargaining and Decision Making: You should concentrate more on the real needs of both parties involved, not just on the formal position that is taken. You are to concentrate here on the determination of real objectives. Like the TOS’s main objections, how you can overcome them and the key issues that are involved. This is where you also determining WIIFT (what’s in it for them). You cannot leave it to chance. Negotiation is all about mutual gain remember.
Agreement: This is where you work out all the details of the negotiation and then ensure clear understanding. The negotiators then go and ratify the agreement with their respective sides. You may do your ratification by attorney, boss/yourself (as the case may be) or financial manager.
Follow-Up: I’m always shocked that negotiators almost always forget this stage. Don’t work hard to sign a contract and then go and sleep. Effective follow-up sets the stage for the next negotiation. Follow-up can also be a tool to build relationship. Use it well.
Qualities of Good Negotiators
They take time and even money to explore the other party’s position in depth and they do it in advance and then go back home to strategize.
They don’t talk too much. They choose when to talk, listen more and carefully and are not unnecessarily aggressive.
When they talk they do it knowledgeably and confidently.
They are shrewd and may not even show it.
They know what they want. They do not go back on their ‘must haves’ except there is clearly a better option.
They have ambitious goals, and build a strong position and case to support them.
They don’t concede without at least gaining a concession in return.
If there must be a concession they concede slowly and it’s not without something in return for it.
They look for inexpensive concessions that they will use to trade for valuable ones in return.
They have credibility and respect from the negotiating party. Trust is a master key on the negotiating table.
The have and show empathy for others.
They have agile minds and a capacity for sustained concentration. This is so much important because no matter how well you have planned your negotiation some things will quickly change and you will have to think quickly and come up will the best decision that won’t hurt in the long run.
They think clearly under huge stress. Negotiating can get really stressful.
They stay positive. They believe in their case and support it wholeheartedly and passionately. If you don’t believe in it, why should anyone do?
They can be really patient. They know that nothing good comes easy. Quick deals most times produce unbalanced deals.
They stay placid always. You will find some negotiators who will deliberately try to destabilize you with strong emotional complaints, demands and criticism. You must watch out for this.
They stay prepared. They don’t get prepared. You should never be taken by surprise.
Negotiation Tips of the Pros
Plan Your Negotiation Well
A good plan will keep you prepared and may even give you and edge over the other party. To plan well: Identify all the issues involved, take time to prioritize the issues, establish a settlement range and then develop strong strategies and tactics. If you do this you may be on your way to winning a good deal for your company or business.
Adopt a Win-Win, Interest-Based Approach
This is what will help you get what you want. Everyone is in it for what they will get. Give them their share and get yours. It’s a win-win thing. That is how skilled negotiators do it.
Use Simple and Accessible Language
Any misunderstanding will break down a negotiation that is supposed to deliver to you a great opportunity to start, grow or get your company established. Negotiation is communication and that communication must be one all parties involved understand. So write and speak in clear terms. You are not on that negotiation table to impress anybody.
Ask Lots of Questions, Then Listen with Your Eyes and Ears
Asking the right questions is vital throughout the negotiation process, especially in the early stages. Your main goal is receiving and gathering information. Pro negotiators ask more questions than amateur negotiators. They also listen more than those who are less skilled.
Build Solid Relationships
You may be a person of strong values but on the negotiation table you should stay away from value issues. When was the last time you won an argument on religion? On politics? I can bold say you have never. So also you will never win at the negotiation table hammering on such touchy issues. Stay around the generally accepted norms and practices. This will help you start and build a strong relationship. Even if you lose a deal keep the relationship.
Maintain Personal Integrity
You must be seen as trustworthy then go the extra mile to protect it. It takes time to build trust but it pays more when its built. Building trust is a good investment. Customers should trust you, investors should trust you, your boss, team and work force should trust you.
The good thing about it is that concessions gives valuable information about you, your style, and your resolve. How you choose to use them sets the tone of an ongoing negotiation and even future ones. It tells the other side how to treat you in future negotiations.
Make Patience a Strong Obsession
Since most times negotiation tends to take longer than planned for patience is not only a virtue, but a necessity. If you stay patient it will do the following for you: It will facilitate getting vital and key information from the other side that will help you navigate difficult areas later, it will help build the relationship and it will increase your chances of effective concession making.
When is your next negotiation? I believe this post has inspired and prepare you to go all out for that negotiation and win he deal for your company.