Whether closing a sale, haggling over a price with a supplier, or discussing a raise with an employee – business owners negotiate nearly every day. Whether you are a beginner or a confident negotiator, these strategies can help you maximize your negotiating skills and improve your chances of building your business.
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.
Whether closing a sale, haggling over a price with a supplier, or discussing a raise with an employee, business owners negotiate nearly every day. While you may already be an effective negotiator, consider the following strategies to help maximize your negotiating skills.
Negotiating does not have to be a zero-sum game. When two parties enter into negotiations, they are both looking to create something of value that did not exist before. Instead of taking an adversarial approach, think about how both parties can arrive at a mutually beneficial solution. Without abandoning your own interests and objectives, consider the interests of your negotiating partner. Reflect on what your priorities might be if you were in your partner’s shoes and how you can best accommodate those priorities.
Before approaching the bargaining table to negotiate an important deal, make sure you are fully prepared. If, for example, you are attempting to sell a product at a certain price, have evidence on hand to justify your price, such as information or testimonials about the quality of the product relative to similar products in the marketplace and about the prices of equivalent products offered by competitors. If necessary, practice with a business partner or coworker, asking for feedback and advice on how you can improve your arguments and presentation.
Find out as much as you can in advance about your negotiating partner so that you can explain in detail why what you are offering is ideally suited to meet his or her specific needs. It may be tempting to focus solely on the virtues of your company or product, but many clients will see through a one-size-fits-all sales pitch. In the course of your presentation, concentrate at least as much on your client’s needs as on the product or service offered. Your client will know if you have done your homework.
When you are the customer, come to the negotiating table with your questions about the offer as well as information about the prices for similar products or services available elsewhere. Have in mind an ideal price and how much you would be willing or able to deviate from that price if, for example, you were offered a volume discount, a maintenance contract, or free delivery.
As you approach the negotiating table, be sure to keep an open mind. Listen carefully to what your negotiating partner has to say, and think about whether you can offer a greater degree of flexibility than you initially anticipated. If necessary, ask for additional time to think about the terms before entering into an agreement.
The deal you are negotiating may be a big one. So be aware of any hidden agendas, and do not allow yourself to be pressured into signing a contract you do not fully understand. If you are attempting to close a sale, do not insist that a client make an immediate decision if he or she is not ready to do so. While pitching aggressively to get the sale may be effective in the short term, it may jeopardize your relationship with the client, and may damage your reputation for solid business practices.
Inevitably, some negotiations come to an abrupt halt when neither side is willing to compromise further. However, this may not be the end of the story. Even if you are unable to strike a deal, avoid showing any anger or irritation. Psychologically prepare yourself for the possibility that the initial round of negotiations may not go your way, and envision yourself gracefully accepting a negative outcome. Kindly and professionally, let your negotiating partner know how much you appreciate the time he or she has taken to discuss the transaction, leaving the door open for future communication. Even a session that ends in a deadlock can be useful in building a relationship that could result in future cooperation.
Negotiations with other business professionals can be tricky. But if you are prepared before you come to the table and remain open about the outcome, you can improve your negotiating skills and your chances of building your business.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results or even estimates of actual returns a client may achieve. This information is designed to provide general information on the subjects covered. Consult your financial professional before making any investment decision. Opinions and estimates offered are subject to change without notice. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. Please see other important disclosures related to StrongValley.com
You are now leaving the Strong Valley Wealth & Pension, LLC ("Strong Valley") website. By clicking on the "Schwab Alliance Access" link below you will be entering the Charles Schwab & Co., Inc. (“Schwab”) Website. Schwab is a registered broker-dealer, and is not affiliated with Strong Valley or any advisor(s) whose name(s) appears on this Website. Strong Valley is/are independently owned and operated. Schwab neither endorses nor recommends Strong Valley. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Strong Valley under which Schwab provides Strong Valley with services related to your account. Schwab does not review the Strong Valley website(s), and makes no representation regarding the content of the Website(s). The information contained in the Strong Valley website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.