Negotiating, for most of us, is a word that causes anxiety and gives us a pit in our stomach. You know, that pit that tells you you’re dreading doing something? We often associate negotiating with confrontation or interacting with the pushy used car salesman. For small business owners, learning how to develop your negotiation skills is essential.
Let’s start developing your negotiating skills by building your knowledge. Mike Lander, a Business Strategist, Negotiation Specialist, and the CEO at Piscari, Limited recommends reading the book, “Getting to Yes: Negotiating Agreement Without Giving In” by Roger Fisher and William L. Ury, as a great place to start.
You can also work on negotiating before getting in front of a business deal by practicing your skills in everyday situations. Try asking your mobile phone provider for a better deal on your phone plan. You can do the same on any other subscription service you have. Make sure you present yourself as personable while negotiating! Practice your body language and tone of voice; present yourself as calm and knowledgeable.
As a small business, negotiating will occur in many different scenarios. You may work directly with other small businesses, vendors, or solopreneurs when negotiating a deal that are solidified with a simple contract or handshake. Larger deals often require negotiating with a procurement agent. These are individuals whose sole job is to find better deals and pricing for THEIR company. Although this may sound scary, the goal is the same: to negotiate the best deal for YOUR business.
Start building relationships with the business owners or those in procurement positions by seeking connections. You may want to connect via LinkedIn or other social media. Follow and connect with these individuals and provide thoughtful or engaging comments on their posts. You might want to consider sending a white paper in an area of your expertise to them that they might find helpful. The idea is to put your name and your business in front of them as an expert in your field, establishing a relationship before negotiations. Depending on the timelines and the size of the deal, you may want to begin these connections 18 months before the commencement of negotiations, rather than days before you present your offer.
According to Lander, “50% of the value of an offer is created before reaching the negotiation table.”
When you are preparing your offer, you will need to be as detailed as possible. Make sure to cover cost, scope of work, deliverables, timeline, and any incentives or terms including payment terms. Having your offer prepared in advance will help you when it comes to how to present and negotiate like a ninja. About three to four weeks from arriving at the negotiating table, make a list of the items you want to achieve with the deal, identify the constraints, such as timelines for production or delivery as well as the deal-breakers like payment terms.
When it is time to negotiate, utilizing these tips will help you achieve that ninja negotiating mastery:
- Be prepared! Come with a list of at least three options for your proposal. Do not be surprised if the other party wants the most value for the cheapest price! Instead, offer a middle option that still offers a lot of value and a middle-ground price point.
- There are times when you will run into what Lander calls a Price Chipper. They might say something like this in your negotiations, “I’ll sign the deal today if I get 20% off of the price”. Lander recommends that you let them know that they are chipping away at the price and asking for the same value. Refocus the talks on the return on investment that your deal will provide.
- Are there items you can provide that have no cost to you? Consider offering one of those items with the second option or as a counteroffer. Things like access to reporting
- Bring the discussions back to working as a team and the value gained from that relationship should it get off track.
- If the negotiations appear to be stalling, provide examples of previous deals that show your success and the benefits of working with you.
- Remember, negotiating is the art of give and take. Always have a counteroffer that you are comfortable with and won’t sacrifice your business.
- If the deal is not meant to close, keep an open mind to other opportunities. Be willing to walk away rather than devaluing your products or services.
By expanding your knowledge, practicing your delivery, and implementing the strategies listed above, you will be able to successfully develop your ninja negotiating skills. If you want to listen to the full podcast on this topic visit our podcast page: Ninja Negotiation.