Business owners negotiate. The monthly rent, outsourced projects, a company car – we’re used to negotiating for a better price or better terms, but are we good at negotiating?
Negotiations are part, science, part art, and a whole lot of reading peoples’ feelings from body language, facial expressions, tone of voice – each provide clues to just how negotiations are progressing.
Little things – a pause that’s a bit too long, a slight downturn of the brow, slouching – these little things add up to a clearer picture of your negotiations.
In almost any negotiation, you won’t get every thing you want, but neither will the other guy. Negotiation is all about give and take – and who’s willing to swap what for that.
As a business consultant I’m often engaged before a business is sold to develop a strategy to get the best price. The strategy doesn’t change. You, the business owner, want the best price given current circumstances. The individual with whom you negotiate wants the opposite. She wants your business for less than you want to get.
Let the negotiations begin.
- Become a vocal mirror.
In a study conducted at the prestigious Massachusetts Institute of Technology, researchers determined that the first five minutes of negotiations are a reasonable indicator of how the negotiations will conclude.
The MIT study reports, “When the observable behaviour of one individual is mimicked or “mirrored” by another, this could signal empathy, which has been shown to positively influence the smoothness of an interaction as well as mutual liking.”
In other words, if you use the same language, tone, syntax, vocabulary, industry jargon, and other elements of communication during negotiations, you build a rapport with those sitting across the table from you and your team.
It only takes a few minutes to understand the nuances of language you hear. Use similar language to your advantage during negotiations. The other side will like you more if you’re more like they are.
- Don’t put out the first proposal.
If you set out your terms first you’re going to be working in that general range up or down. You’re going to be providing whatever services or products you sell within the range of the initial proposal so let the other team lay out their terms first.
This enables you to flinch and show disappointment at that offer and determine just how far you should go with these discussions and with this business.
Never agree to the first proposal offered by their team. It’s not the best offer you’ll hear that day. In fact, don’t say anything after hearing the proposal of the other side. Believe it or not, whoever speaks first at this stage of negotiations is most likely to make concessions as negotiations continue.
It’s always better to say nothing than to say the wrong thing during negotiations. Once it’s out there it’s out there!
- Be reluctant even if you’re getting a great deal.
Negotiations are all about reading the emotions of others. If you “reluctantly” agree to terms instead of doing cartwheels around the negotiating table you win by not showing the other side just how happy you are with the final terms.
Always agree with reluctance.
- Don’t split the difference.
Often the final negotiation point is cost and which party pays for what. If the other party offers to “split the difference” you’re in a good position to split that difference and getting 75% of what you asked for instead of the 50% you would have gotten if you’d split the original difference.
It often pays to let the other side run the meeting. You’ll get more of whatever is under negotiation.
- The good guy, bad guy approach to negotiation.
This doesn’t usually deliver the best outcomes in my experience. One negotiator is compliant, the other digs in his heels. It tends to create stress and conflict, even if it’s planned stress and conflict.
Forget the good guy, bad guy approach. It isn’t productive except on TV with good cop, bad cop interrogations.
A negotiation isn’t an interrogation.
- Always come in high.
Ask for more than you ever expect to get during the negotiations. Coming into negotiations with high numbers and a long list of “must-haves” gives you the negotiating room needed to cede something you weren’t really expecting in exchange for one of your must-haves.
- Know when to stop.
If negotiations aren’t moving in either direction after a reasonable amount of time, chances are you’re at an impasse. Sure, you can order more coffee but if negotiations are going nowhere why bother?
On the other hand, if you’ve negotiated terms that benefit your company – even a little bit – know when to shake hands, draw up the contract, and sign on the dotted line.
In good negotiations, both parties walk away a little disappointed because they didn’t get everything they wanted. But parties also walk away feeling satisfied that they got a good deal through good negotiating tactics.
Prepare yourself for any negotiation. Know your limits of what is and is not acceptable. Be cordial, be flexible, but don’t give away more than necessary.
That’s what good negotiating is about.