Owning your business requires many skills, and among the most important might be the ability to manage negotiations. As a business owner, you could find yourself negotiating in many circumstances, such as:
- Salary and job expectations with a potential employee
- Financing terms with a lender
- Payment terms with a supplier
- Lease or property agreements
- Equipment agreements.
Your ability to negotiate will have an impact on your financial situation, which is why it’s a good idea to refine your skills. That way, you’ll feel confident when discussion time comes around.
Here are four tips to improve your negotiation skills.
1. Be prepared
One of the best things you can do to improve your skills is to be prepared for any negotiation. By being prepared you’ll be better able to negotiate beneficial agreement terms and you’ll identify when someone is offering you a great deal that you should take advantage of.
This means doing your research to understand the scenario you’re negotiating in. Get to know what terms businesses like yours have agreed to, what other options you have available to you and how they’d stack up against the agreement you’re considering.
Also give thought to what you would consider a good agreement. Ask other people how they have handled similar negotiations. Finally, make sure you know what you’ll do if negotiations fall through. It’s easier to walk away from a negotiation if you know you have a back-up plan in place.
2. Know what you’re willing to give up
Before you go into the negotiations, it’s important to not only know what you want but what you’re willing to give up. Would you lose an investor so you keep more shares in your company? Would you give up partial control of your company for more shares? Would you pay more money for additional storage space?
Understand what you’re willing to give up and what you won’t yield on.
Knowing what you will–and won’t–give up on helps you stay focused and prevents you from making snap decisions that you ultimately wind up regretting. It also helps you evaluate whether the deal is a good one for you, and enables you to push to keep the things that are most important.
3. Practice negotiating
There are plenty of opportunities in your daily life to practice your negotiation skills in a low-stakes environment. You can practice negotiating where you want to eat for dinner, who has to do the chores, and what activities to take part in on the weekend. Use these situations to develop your listening skills and your ability to find a way to mutually beneficial terms.
4. Keep it conversational
Negotiations are about both sides walking away feeling positive about the deal that has been reached. You don’t want a negotiation to become adversarial. Remember that you are having a conversation to reach a point of agreement between all parties involved, and keep in mind that the negotiation isn’t personal. You and the other parties both want to get something out of the agreement, and you likely both want the other side to come away happy as well.
Negotiation is an important part of business life. Ideally, you want to feel confident, relaxed and prepared going into any negotiation. The best way to do so is to do your research, know what you want, practice your skills and keep things conversational.