How to negotiate in business

It’s a vital skill to learn how to negotiate in your business

The art of how to negotiate in business is a very important skill but often seen as something that only certain types of people can do well.

So why is negotiating so important?

The word ‘negotiate’ means to obtain or bring about by discussion and find a way over or through (an obstacle or difficult route). It all sounds very cohesive but negotiating can often be perceived as one person getting their way while another walks away with nothing.

Good negotiating doesn’t have to mean an all or nothing scenario. Remember, negotiations happen countless times a day. Some have small outcomes, while others will involve business decisions worth millions.

Without negotiating, we’d be stuck in a status quo with no control, which is not a place we want to be. You wouldn’t be able to grow your business or have meaningful relationships without some negotiating.

So, if it’s a fact of life, how do we make sure we’re good at it?

How to be a good negotiator?

The good news is that we can all learn to be better negotiators. Even if you’re someone who is fearful of confrontation, you can still become a good negotiator. It’s just a case of following and practicing  a few simple steps.

1. Prepare ahead

Benjamin Franklin, famously said: “By failing to prepare, you are preparing to fail.”

In negotiations, preparation is key.

Before you enter into a negotiation, make sure you know what you want to walk away with and what you’re not prepared to compromise on.

Take some time to find out about the people you’re negotiating with. Building rapport with people is easier if you can demonstrate some understanding of their situation. Try to find out the personaities of your counterparts so you can better anticipate their approach.

Planning isn’t always possible of course, as in some situations you don’t know that you’re about to go into  a negotiation but other disciplines can still be followed.

2. Place and time

If you can, choose somewhere neutral to hold any negotiation discussions. If you want to meet a supplier to negotiate better payment terms then their office probably isn’t the best place to do that. See if you can meet somewhere else nearby, for a coffee instead.

Avoid holding important negotiations in the afternoon. As the day progresses, we all begin to lose steam and can easily let other frustrations from the day cloud our judgement.

3. Be polite and smile

Being assertive and a strong negotiator doesn’t mean you can’t be polite and respectful of others.

You might want to think about smiling too!

Even if negotiations are taking place on the phone, when you smile, the tone of your voice changes.

People will be happier to rest on a compromise if you’re smiling. It makes you seem more approachable too and more open to negotiations. If you get someone’s back up, they are much more likely to stand their ground and dig their heels in. It’s human nature.

4. Be a good listener when you negotiate in business

Negotiations are all about give and take, so being able to listen to people is important. If you can show someone that you understand their issues, reservations and concerns, you open up the discussion much more. Try to put yourself in their place and consider how you would feel if you were on the other side of the table.

Listening isn’t just about sitting quietly and not interrupting. It’s about maintaining eye contact and concentrating while someone else is speaking so you can demonstrate you are interested and can remember what they have said. Repeating back what you’ve heard shows you’ve understood them (just the main points, not word for word mind).

5. Be aware of your body language

Eye contact is important. If you keep looking away it could imply that you’re not being truthful.

Be aware of your limbs, stance and body movements. When you get anxious, even if you don’t realise it, nervous ticks may creep in. This body language can be picked up by other negotiators.

Don’t sit on your hands though! Hand gestures show you are speaking from the heart and are passionate about something and not just reading from a script.

6. Use anchoring techniques when you negotiate in business

“Anchoring” is a technique which relies on humans attaching themselves to a piece of information which they hear at the start of a conversation. For example, if you said to a candidate in an interview that the role cannot pay above £25,000, that figure will stay front of mind.

7. Don’t be afraid of the silence

If you feel uncomfortable with awkward silences, you’re not alone.

However, if you can practice holding back the urge to fill that gap it could bring benefits. For example, if you ask your counterpart for something but they don’t answer you straight away, avoid the temptation of jumping in with an alternative offer. If you sit back and wait, you might be surprised at their response.

Out of the mouths of babes and cats!

Young children and cats are actually quite good negotiators. They don’t take no for an answer, they let you know exactly what they want and they’re very creative.

Creativity is helpful in negotiations, as you need to think outside the box and search for ever changing solutions and compromises.

So maybe we can all learn something from children and cats. You just need to find ways to avoid their other tactics of crying, stamping their feet and clawing at your curtains when they don’t immediately get everything they want though!

How can THP help?

If you’re about to head into negotiations with your suppliers or customers or perhaps are looking to sell your business or acquire another, we can work with you to agree aims and objectives.

We can also help prepare up to date forecasts and accounts so you have a clear idea of your financial position before you go into a negotiation.

Why not give is a call at one of our offices in Sutton, Chelmsford, Wanstead or Saffron Walden and let us know how we can help?