This post originally appeared on Business Insider, where YFS Magazine’s Founder, Erica Nicole, regularly contributes articles on how to work smart, improve workflow and develop a profitable small business.
Can you remember as a child when it was perfectly acceptable to yell, “Mine!” without being ostracized as if you had three heads? Fast forward to circa now, and you’re a successful entrepreneur running a profitable venture on a much larger playground. Inevitably while building your empire, you will run into grown-ups that are still running around the playground yelling “Mine!”
As to be expected, when it comes to successful negotiations, a “Mine!” mindset suggests one thing – a slow route to defeat. On the other hand, have you ever considered what constitutes a win-win negotiation?
Most successful entrepreneurs are skilled negotiators and exceptional listeners. Finding the middle ground is essential to developing positive relationships and a healthy bottom line. Start negotiating like a pro, work smart and focus on three areas: the outcome, preparation and proven tactics.
Mastery of the Win-Win Negotiation
Closing a business deal starts with keeping the end in mind. The most rewarding and profitable outcome is what is known as a ‘Win-Win.’ According to Steven Covey, the author of The 7 Habits of Highly Effective People, “It’s not about being nice, nor is it a quick-fix technique. It is a character-based code for human interaction and collaboration.”
The single most important part of negotiation is preparation. The groundwork starts with your ability to be specific and transparent about what you want and why someone should negotiate with you. Understanding needs and motivations will help you build bridges to benefit everyone involved.
For example, when you decide to work with new vendors open the bidding process with a request for proposal. A RFP is an essential tool that will help you accurately assess the marketplace, define the big picture and paint it.
Six Powerful Negotiation Tactics
Once you have clearly defined what you want and prepared by acquiring knowledge you are ready to execute on powerful negotiation tactics. Here are a six proven techniques that will change your life and your business:[check_list]
- Always ask for more than you expect to get. The results may surprise you. One of the key characteristics of a good negotiator is the courage to ask for the impossible.
- Never say yes to the first offer. Even if the deal is perfectly aligned with your needs, take a deeper dive into the facts. Emotions, opinions and feelings dilute deals. Focus on the facts.
- Avoid confrontational negotiations. We all like to do business with people we like and ultimately trust. Affirm the other side’s position and then offer factual insights to strengthen your case. If you’re out for blood, you may end up crawling from the war room nursing your wounds.
- Be reluctant. The less eager you are the better off you will be. Often times, the Vise Technique, an initial “I’m sorry, you’ll have to do better than that,” is highly effective.
- Leverage urgency and remember the 80/20 rule. Eighty percent of your concessions will be finalized in the last twenty percent of your timetable. Think auction houses – going, going … gone.
- Evaluate the competitive landscape. This is where RFP comes to your aid. Don’t be afraid to state what your observations of competitive activity.
Close the Deal
There are several ways to close a deal and they are all dependent upon how well you prepare and execute. If a win-win is unattainable, as a last resort, learn to walk away. “Sometimes your best investments are the ones you don’t make (Donald Trump).”
If however, you’ve manage to inch out a win-win – congratulations. Remember to always get it in writing and follow through. Be firm, honest and fair. If you make promises work diligently to deliver on them.
Did you enjoy this article? If so, subscribe to YFS Magazine and never miss an update.