Negotiation is an essential business skill, no matter the size of your business. The Centre for Economics and Business Research estimates that a typical UK company could improve its profits by 7 per cent a year by negotiating better. Imagine the boost that would give to their bottom line.
The best negotiation is one where both parties walk away feeling as though they have been heard and that they are comfortable with the outcome.
Here are some practical things business owners can do improve the way they negotiate:
Do your research
Preparation is key. As the age old saying goes, ‘Fail to prepare and you prepare to fail’. For business negotiations, know the background of the company, learn about the factors surrounding their offer and, if possible, verify the information you have received relating to their proposal. Do your research and come prepared with numbers to back up your offer. Your argument will be more persuasive and you will have a stronger position if you can mention specific examples, statistics or potential outcomes.
Learn to Listen
Listening is the first essential of communication. Interestingly, ‘listen’ and ‘silent’ are anagrams, corroborating the statement that listening is being silent in an active way and supporting the saying “The quieter you become, the more you can hear”.
When it comes to business negotiations, it is vital that you listen to the other person or party. Understand the message they are trying to relay and never interrupt unless you find it necessary. If you listen, they might just answer your questions for you.
Ask Questions
Smart people know how and when to ask questions. Questions should be relevant to the topic of your negotiation. Try to understand all the relevant background information related to the discussion. Know what the other party has to say and, when in doubt, verify things so that there are no misunderstandings with the other person or party.
Don’t Rush Things
Don’t expect that after the first meeting you will reach a decision. If you or the other party are still undecided, then you can schedule another appointment in order for both parties to consider the information discussed during the first meeting. Being patient will give you time to consider your options.
Understand the Other Party
Do not be narrow-minded. Learn to understand the situation from the other party’s perspective. You should also prepare to walk away if you think a successful negotiation is not possible. Stop the deal if necessary so that the other party can see that you have a strong will and are serious about the negotiation. This can often put you in a stronger position as the other side will have to ask you to resume negotiations if they wish to carry on working towards an agreement.
Good communication skills, open-mindedness and preparation are some of the most important factors in securing a positive outcome from a negotiation. If you would like some help in an important business negotiation, please contact Steve Govey or your usual Beavis Morgan Partner.