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Negotiation isn’t just for Wall Street tycoons making million-dollar deals. Even owners of micro-businesses negotiate with others on a regular basis, whether it’s asking for the best deal from a supplier, getting a good rate on a bank loan, or setting the salary for a new employee. Anytime you’re trying to cut a deal with someone else using give-and-take, you’re using negotiation skills, so learning some basic principles now will pay off over the long run.
Here are a few to get you started:Prepare, prepare, prepare!
Before you try to get inside the other guy’s head, figure out what you want and write it down. What’s your main objective? What would be the ideal outcome � the lowest price, the perfect terms? What are you willing to give up in order to get what you want? What are your deal-breakers? You have to know in advance when to walk away, so you don’t end up on the wrong end of the deal.
Know the market.
Researching the situation in advance can be your best negotiating tool. If negotiating for a contract price or a salary, look up comparables in your industry. Making a deal for supplies, equipment or vehicles? Call around and find out what market values are and what prices and terms your counterpart’s competitors are offering.
Know your counterpart.
If negotiating with another company, find out all you can about them � examine their website, financial filings, news reports. Learning about their operations, their history and their current situation may help you estimate what they want and predict what they’ll offer. Do they usually make one-and-done deals, or do they prefer long-term contracts? Are they in a financial situation where paying upfront may give you more leverage? Considering their circumstances, make an effort to look at your proposal from their perspective.
Look for a win-win outcome.
Some business pundits like to compare negotiations to warfare, where you need to make a first strike, use stealth and deception, show no mercy, and conquer your opponent. In real-life business dealings, it makes more sense to compromise so each party gets most of what they want. That way, you can maintain relationships and look forward to making more deals in the future.
Shoot for the moon.
Remember that your first offer will set the reference point for the rest of the negotiations, so don’t be afraid to ask for a great deal more than you’d be willing to settle for. If you’re selling, set a high price, and if you’re trying to buy, make a lowball offer. Propose terms that you know your counterpart is unlikely to accept. That way, you’ll have some room to come down to the terms and price you really want.
While the other person is talking, use that time to really listen to what they’re saying instead of waiting impatiently for a pause so you can interrupt. You might learn some valuable insights into their point of view, and if nothing else, listening politely is a sign of respect that can help to build trust.
Don’t take it personally.
Allowing your emotions and your ego to get the upper hand will put you at a disadvantage. Don’t be insulted and outraged if your counterpart offers a price you can’t live with. Just make a counteroffer and drive on. Keep things on a professional level and try to maintain an atmosphere of respect. Remember, it’s not about you, it’s about getting the results you laid out before you started the negotiations.
Patience pays off.
If facing a high-pressure opponent, don’t allow yourself to be rushed into an agreement you’ll regret later. If you need more time to consider their offer, don’t be afraid to ask for it. Patience can also pay off if you see that your counterpart is getting tired of lengthy discussions. They may decide to close the deal at a disadvantage simply because they’re impatient to be done with it.
It’s good to keep in mind that, while very few people enjoy negotiating, it’s one of those skills that can be developed over time. Find a negotiation method that works best for you, then practice it until it becomes second nature, and you’ll reap long-term rewards in your business and personal life.