Five Things to Know About Negotiation
Negotiation skills are vital for entrepreneurship, yet many struggle due to a lack of strategy. To succeed, here are five intelligent tips you can use to secure your next big win.
Negotiation is an integral part of the entrepreneurial journey. Whether you're working with clients, partners, or suppliers, effective negotiation skills are essential for success.
However, many people often struggle with negotiations, as they do not have a clear strategy in place.
To help you be in control and avoid common pitfalls, we've compiled a list of 5 intelligent negotiating strategies from Sally Page, Vice President of Content & Creative Partnerships at Blinkist and Co-Founder at WorkTripp.
1. Know what you want. It sounds obvious, but this is key. Most people go into a negotiation only thinking about two aspects: Money and something to do with the products/services on offer. But, there are several things you want to think about.
For example: Do you need an exclusive relationship? What are the timings/deadlines? What would your walkaway position be? What’s your cherry on top that a partner could give you?
And on the other side, what could you give to them? Traditionally, this is referred to as a concession, and the value you have the potential to add is easy peasy for you to deliver AND means the world to your potential partner. This is a valuable tool when you’re negotiating.
Remember, there are always different aspects that you can pick out when you're building a partnership with someone that would have value to you OR add value to them. Spend as much, if not more, time preparing for the negotiation so you can discover all of this and more.
2. Listen first. Most people, especially knowing what they want, go into a negotiation and speak. They think, ‘If I tell someone what I want, and all the reasons why I like it, they will agree. Don't do that.
Starting from the other side, a position of curiosity, you can always put forward how you see some benefits of a partnership, but then start asking the questions and draw that information out.
There are three parts to listening:
- Ask questions. This is the best possible way to start and is especially important if you’re starting from scratch, working in/with an industry that you don't know much about, or it’s a deal/partnership that you have never done before. Why? Because you can then find out what areas are really of interest to them or concern. You can find out what they want to get out of the deal and, importantly, what success looks like.
- Rank the questions. When you ask questions, try ranking them to get under the surface even more (e.g. ‘Is it more important for you to be paid upfront or is reach important?’). Now, everyone will always say, ‘But it’s all the things,’ however, you start to get a sense of their real priorities, jobs, pains and gains by ranking your questions.
- Summarise what the other person has said. This is a straightforward way of building a relationship AND clarifying so that you're on the same page when you return with a proposal. For example, you respond with, ‘So what I heard is that [insert answer] is important to you at the moment.’ And if they confirm/deny, you have a firmer view of where they’re coming from.
Do not neglect the importance of time
There are two aspects of that: Timing within the deal and speed. Timing covers: ‘When do you/they want to start working together?’ ‘When do you/they want to get paid?’ or ‘When do you want to review the relationship?’ This can make people a lot more comfortable entering a partnership and set boundaries on both sides.
And the second aspect of time speeds. Remember that the longer you draw out a negotiation, the more it costs you and your potential partner in time. Also, the longer a negotiation carries on, the less likely you are to find mutual ground.
Keep the momentum and focus your energy in the right place, so you don’t procrastinate and drag it out.
Channel your Creativity
This is a big part of the negotiation, and creativity is your friend. If you’re a parent or have experience with small children, you’ll recognise the art of using hypotheses to reach a mutually beneficial agreement. For example, you may say, ‘If I were able to get you x, would you think you'd be able to do y&z?’
This also helps to identify what’s possible and its importance to them. You find out if that is the thing that they would want.
For example, if someone says, ‘It has to be this amount of money, and you say, ‘Great, if I could get you this amount of money, will you give me these things that I want?
Don’t try to “win”
If you come away from a negotiation and feel like you've got way more value from it than the other side, that is a massive red flag. Why? Because they will go away and think about the deal they've just done, and they will feel bad.
Why? Because they will feel like they have lost. And if you're trying to build a sustainable partnership with someone who feels like they've lost, you've instantly broken that relationship.
According to Sally, "I always say to the teams I work with, picture old-fashioned scales. The deal must feel balanced. You’re exchanging equal value, so it’s a ‘win-win’ situation for all parties."
The next step? Once you've gathered all this information, you know where you want to put forward a realistic proposal showing the other side that you've listened to. Even if it means you've moved massively from your initial idea, remember that you didn't have all the information and improve your offer by using the top 5 tips.
By following these five strategies, you can be in control, avoid common pitfalls, and get everything you want from your negotiation.
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