Whether it is dealing with a vendor or haggling with a client, it is true that small business people negotiate a lot. Certainly many of the folks are out there working to make the sale and close the deal. And that begs the question: Why are some people great at negotiations while many others are not?
The answer, I submit, is that the masters get one essential fact about a negotiation that the amateurs do not: Negotiations are a game. Once you appreciate that – that the back-and-forth is a game with rules, strategies, tactics, winners and losers – then negotiating becomes easier because you take a bit of the emotion out of it.
Of course you want to win. Here's how:
1: Pick a strategy: Before you negotiate, first figure out whether you want to employ a win-win strategy or a win-lose one.
The conventional business wisdom is that everyone strives for a win-win outcome; that you get much of what you want by helping the other side get much of what they want. When it works, win-win negotiations are great because everyone feels pretty good about the process and hard feelings are kept to a minimum.
But sometimes, win-win outcomes are not possible or even preferable. That is when the win-lose strategy makes sense: Try to get what you want and don't worry about sore feelings.
Either way, once you decide which strategy works best for you, the next step is to do your homework. The more you know about the other side's strengths and weaknesses, the greater your chances of getting what you want. For example:
• If you know your boss will have a hard time replacing you, consider holding out for a better deal.
• If you are negotiating a lease, knowing that the building has been empty for a year would be very valuable information.
2. Have some tactics ready: There comes a time in many negotiations when having some tactics at the ready can make a big difference. Here are some to consider:
Ask for more than what you want: This seems especially hard for some small business owners, especially it seems, those who don't like to negotiate. But if you see this is a game, then asking for more should not be hard. The other side will offer less. Game on!
The friendly gesture: Especially in a win-win negotiation, this tactic can be very effective. The idea is to make a magnanimous gesture to create some goodwill; that a nice offer just may be reciprocated.
Creativity: Maybe your boss can't afford the raise you want. In that case, be creative. What else could you get from him to make up for it? Maybe he could offer some extra, paid time off, or could pay for your monthly light rail pass. It never hurts to ask.
Don't act too interested: You gain leverage when it seems like you can take it or leave it. Easier said than done, I know, but still true.
The red herring: By pretending you really want Fridays off (when if fact you don't care), you allow yourself the chance to compromise, give up that red herring, and still be able to hold out for what you really want (more money) without seeming like a jerk.
3. Wrap it up: Sometimes, getting the deal done takes a little nudge:
The calculated blowup: In some negotiations, “blowing up” and then “cooling off” will often get the other side to be a little more cautious about what they are offering.
The willingness to walk: The willingness to walk away from the table with no deal is the single most powerful weapon you have.