The art of negotiation a very important art every entrepreneur must master to become successful and also get what they want before we dive into the main topic let’s see what negotiation is all about.
Negotiation is part of everyday life, but in business it’s critical to your success. Poor negotiation can cripple your business just as quickly as losing key customers. While most negotiating strategies may seem like common sense, it’s not uncommon for people to get caught up in the emotion of the moment and ignore their basic instincts. Emotion, luck and magic have no place in a successful negotiation. It takes guts, homework (research), street smarts and discipline.
If you notice homework was mentioned in the previous explanation of negotiation, it was mentioned because a good understanding of the party you’re negotiating with is very crucial to your success, in the sense that once you have a good understanding of the party you are negotiating with you can trample on their weaknesses and hone your strengths.
Strategy: The first offer is usually the most important and the benchmark by which all subsequent offers will be judged and compared. You’ll never get what you don’t ask for, so make your first offer bold and aggressive.
You want to take all you want and hopefully more, so start lower than the seller expects also don’t worry about insulting the other party. As long as your offer is not ridiculous, the other side will continue the negotiations in hopes of settling at a better number.
Understand the leverage and use the conditions around: In addition to exploiting the other party’s weaknesses, concentrate on taking maximum advantage of your strengths. If you’re the only source available for a particular product, you have tremendous leverage across the board. If economic conditions have created a market in which the product you’re selling is in great demand and low supply, that gives you more bargaining power to name your price.
Know the offer: The offer must encompass all the elements of the bargain and will normally makes the basis for a contract that formalizes the agreement. The basis of the bargain should include: offer price (in proper denomination), statement of work (scope), identification and quantities of goods or services, delivery schedule, performance incentives (if any), express warranties (if any), terms and conditions, and any documents incorporated by reference.
Seal the deal: Successful negotiation requires timing, creativity, keen-awareness, and an ability to predict the other party’s next move with all these being said always have your end game in mind.
Let us know what you think, how did you go about your lost negotiation share with us as we are always glad to hear and learn from your story.