When you own your own business, you will face negotiation situations on a regular basis–hiring new employees, developing partnerships, or simply landing a new client will all put you in the negotiation hot seat. You don’t have to be a hard-bargaining business shark to come out on top of your next deal–in fact, some of the most effective negotiation tactics business owners use rely on being open, friendly, but firm.
Read on to discover the 6 negotiation tactics business owners need to know.
6 Negotiation Tactics Business Owners Need to Know
These tactics can be applied across a variety of negotiation scenarios, but you’ll want to consider your situation individually for each one. For example, if you’re in talks with a real hardball negotiator, it might be okay to be a little more aggressive and firm than you normally would be in such a situation.
Likewise, if the negotiation is particularly difficult and you’re having trouble coming to a resolution with the other party, it may be best to reconsider your terms and what you expect from the deal.
1. Think of the first offer as a starting point, not a destination.
Tried and true, this tactic will change your negotiation game from the ground up. When you think of the first offer as just that–the first offer–you’ll be more confident when you assert that it’s a fine starting point, but you were thinking something more along the lines of ___.
2. React honestly to the other side’s offer.
That means if it’s insultingly low or offers less than you expected, you shouldn’t pander or act like it’s a compliment; let it show. Flinch, wince, chuckle–whatever you feel about their offer, react honestly. An important factor of negotiation is letting the other party believe that you are in control of the outcome–even if it doesn’t really feel like that’s the case.
3. Put your cards on the table.
Not all your cards, of course, but reveal some extra information about yourself, your company, or your current needs. It will humanize you to the other party, and if you’re sharing additional info that will help them make a decision in your negotiation, you only increase your chances of coming out on top.
4. Know your price.
The best negotiators know they can’t win every negotiation, and they’re okay with that. You need to set limits on what you will accept and what you will walk away from. Adam Galinsky, Northwestern University professor and negotiation expert, calls the amount you’re willing to walk away from your “reservation price,” while the amount you really want is your “target price.” If the other party can’t exceed your reservation price, you’ll know it’s time to walk, and if they meet your target price, you’ll know the offer is good.
5. Always counter.
Counter offers leave both parties feeling more satisfied with the deal in the end, and that may have something to do with the way we all like to feel like we’ve just finished up some really tough negotiating and come out on top. Don’t be afraid to counter offer–the other party will respect that you know exactly what you need and will not settle for less. This makes you a more attractive person/company to work with!
6. Let the other party talk.
Detectives understand this tactic well–state your final case, and then shut your mouth. Sometimes the best information comes when you simply let the other party lead the conversation. By making your final statement (“I appreciate the offer, but we’re going to need at least x amount to move forward. *Silence*) then going silent, you make it clear that it’s their turn to talk and make a concession.
Remember to set your limits–reservation and target prices–and remain confident throughout the negotiation process. There’s a fine line between being assertive and confident/aggressive and pushy, so tread lightly but don’t settle. You’ve gotten this far on your current negotiation skills, so use these tactics to bolster your negotiation power!