5 Tips For A Successful Business Negotiation
What are the tips for a successful business negotiation?
- Do thorough research
- Know your goals and ultimatum
- Start off with a highball and lowball offer
- Listen and work toward a win-win scenario
- Set a deadline for the offer
Whether you’re trying to seal a business deal, solve conflicts, or ask for salary raise, negotiation is a skill every professional will need. It can be extremely difficult to reach an agreement no matter what the item is being negotiated. That’s why it’s important to plan ahead and know the most effective tips for a successful business negotiation.
Those who account for all possible outcomes stand a better chance of bargaining the right way. However, even the smallest mistakes can fail to close the deal. That’s where business negotiation skills come into play. Consider these five tips for a successful business negotiation.
Do Thorough Research
You can’t secure the deal you want if you don’t know facts about the subject of negotiation. This is why it’s important to do proper research first. Get as much info before entering the negotiation session. This is also a key to putting yourself in a position of strength.
Let’s say, for example, you will be negotiating with a supplier. If you understand the offerings and prices of the party’s competitors, you may be able to strike a deal that is more beneficial on your part. Another example would be when an employee is negotiating a salary raise, you can review his or her past performance to come up with a fitting amount.
Know Your Goals and Ultimatum
The best negotiators know exactly what their goal is before entering into a discussion. This means they also clearly know what deal they won’t accept.
If you don’t know the point where you will be willing to walk away, then you may be setting yourself up to make a bad deal that will force you to the losing side. Make sure you know your goals and what parts you are willing to concede.
Start Off With A Highball or Lowball Offer
If you are a client and you know what you are willing to pay to a supplier, then you can start with a lowball offer. Offer half the amount that you are willing to pay. Even if you know the supplier would not accept your offer, it establishes a reference point to push the negotiation further. In a way, this can be a negotiation tactic to put pressure on a seller who needs to liquidate their assets quickly.
On the other hand, you can also start with a highball offer if you are the seller. Lead with an amount that is higher than what you are willing to accept.
Listen and Work Toward A Win-Win Scenario
More often than not, people think of negotiations where one party wins and one loses. When in truth, a successful negotiation is supposed to feel like a win-win scenario. In that sense, the session is viewed as a method of problem-solving for both parties.
However, negotiations can’t feel like a win-win situation if each party’s arguments are not addressed properly. This is why some of the worst negotiators are the ones who do all the talking.
You need to carefully listen to the other party’s concerns to be able to formulate an appropriate bargaining response. After recognizing what the other party wants and what their limitations are, then propose a deal that addresses both your needs.
For example, let’s say your employee is negotiating for a higher salary, but you are not flexible enough with it. Then you can offer other win-win solutions in the form of flexible work schedules or remote work opportunities. Both these don’t cost much for your company but can be tremendously valuable for your employee.
Set A Deadline For The Offer
If you are the one making an offer, then set a deadline to accept it or walk away. It’s important to take note that setting a deadline shows the other party about how serious you are about the deal. During the deadline, the other party may also come back with a counteroffer. This being said, setting a deadline is one of the most effective strategies when negotiating.
Negotiations can be challenging without proper preparation. Even the slightest mistakes can put you on the losing side. That’s why we’ve listed five tips for a successful negotiation above.
Learn more about negotiation strategies from the best business podcast in the Philippines — Leadership Stack. Leadership Stack is the podcast for entrepreneurs by entrepreneurs. We invite professionals from different industries every week to share their best business, finance, leadership, digital marketing, and investment tips. Click here to tune in now!