Negotiation skills can give you a leg up. A good negotiator can get the best prices, the best people, and have the best relationships, all which add up to a thriving and successful business.
To be truly good at negotiating there are two critical considerations. First, preparation is key, and, second, is the actual art of negotiation. Doing one without the other won’t yield the best result.
This article is about the preparation, but you can see our other article on the actual negotiation here.
Follow these six steps to set yourself up for a successful negotiation.
Good negotiation is done through knowledge, not force. You’re sold something when you aren’t informed or prepared, and you’re led down a path by the sales person. Instead, you want to be empowered with information to be able to control the situation.
Here’s what you should research ahead of time:
1. Research the Company
- Who is the company?
- What products or services do they offer?
- What are the features, pros and cons, and costs of that product?
- What do they advertise?
- Have they had any sales/advertised discounts over the last year?
- What were the prices during that sale?
- What do they value?
- What do the reviews of their company or products say?
- Are they strong in any area?
- Are they strong financially?
- Are they reputable?
- If you don’t go with them, what alternatives will you have?
- Can you find what other people paid? Do they need your business?
2. Research the Negotiator
- Who are you going to be negotiating with?
- Can that person make decisions?
- What are their goals?
- What leverage do they have over you?
- What leverage do you have over them?
- What can you find about the person you’ll be speaking with on social media or in the news?
- Can you find out what the person’s negotiating style is?
Often business owners think that getting a good price is the only thing they want out of a negotiation but that might not the whole story. Knowing what you care about and don’t care about will allow you to craft your strategy accordingly. Price is only one of the factors. Convenience, flexibility, service, or consistency of availability are other examples of things that a business owner might want out of a negotiation. What are you, and aren’t you, willing to compromise on?
4. Develop Ideal Outcomes
Before you go into the actual negotiation, you should know what your ideal outcomes might be. You should have three scenarios ready and written out.
Scenario 1 – What is the absolute perfect, “unicorn,” contract or deal you want?
Scenario 2 – What would you be happy with?
Scenario 3 – What’s the bare minimum you’d accept and still find worthwhile?
After thoroughly researching the company, the products, the prices and the features, you should have these numbers nailed down before the negotiation begins.
5. Develop Your Strategy
Strategies are your overarching guiding principles you’ll use in the negotiation. For example, a strategy might be “don’t be afraid to walk away” or “show the other party the value in working with you.” They’re more generic, high level philosophy statements that are applied to the negotiation. Build these strategies based on your research.
6. Become Mentally Prepared
Right before the negotiation make sure you pause for a moment to “get into the zone.” Perhaps close your eyes and focus on what you want to accomplish. Also commit yourself to staying emotionally neutral. The best negotiators can put their emotions on the shelf, so they can manipulate the emotions of the other party.
Once you’ve completed these steps, you’re ready to enter the negotiation. Click Here to see our article on the actual negotiation.