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Small
business owners negotiate on a daily basis. Whether it’s haggling with a
supplier, bartering with a business partner or motivating an employee,
negotiating is a fundamental reality of small business. But that does not
mean it is always done well. To negotiate well is to improve your chances of
having a successful business.
Strong
negotiators gather information beforehand to gain an advantage. Price
comparisons on supplies are a good example. Being informed strengthens a
negotiator’s position and lets the other person know that this negotiator
means business. It also results in fewer mistakes and helps to negotiate
more competitive deals. The business owner who goes into a meeting with a
supplier knowing that the average cost of the supply is $6 is not likely to
agree to buying it for $8. Furthermore, the supplier knows the average cost
and is less likely to try and gauge the informed buyer—at least not
without some sort of justification for the higher price. But being informed
is only one aspect of strong negotiation.
Carefully
positioning your opening offer and considering the other party’s
expectations are critical components of this delicate skill. Remember
negotiation is a part of relationship-building and should not be seen as a
win-lose situation. Being able to justify a bid strengthens a proposal and
softens the other person’s ability to counter. By not making ridiculous
demands and offering a realistic proposal you are more likely to win the
respect and cooperation of the person you’re dealing with. Remember to
think before speaking and don’t say anything you would not want to see
written down or hear played back. Informal offers and off-the-cuff remarks
can set expectations, so treat each meeting seriously—as serious as a
contract.
When
you come to a point where you feel you need to concede, be sure you really
do. Too many times business owners concede early because they are
uncomfortable with negotiating or have too many other things to do. Before
giving in, ask for a justification for any conciliation that has been asked
of you. When you give in quickly, you send a message to the other person
that you are eager to get this over with or that you never really felt
comfortable with your initial request or proposal.
Above
all else, remain cooperative and positive. That does not mean give in. It
just means maintaining a level of optimism, friendliness and enthusiasm for
the process. This not only helps to disarm your counterpart, but it helps
the whole process feel more comfortable for all parties. Furthermore, it
gives the other party a sense that you are confident, assured, well-informed
and ready to get down to business.
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