Negotiation – Text
Check unknown vocabulary before you read the text:
startup – the act of starting a new operation or practice
get-go – the very beginning
to enlist – engage the support or cooperation of
to ramp up – bolster or strengthen
tenet – an opinion, doctrine, or principle held as being true by a person or especially by an organization
concession – the thing or point yielded; a step back
to unravel – take apart; undo; destroy (a plan, agreement, or arrangement)
to recap – recapitulate
loose – free or released from fastening or attachment
to nail – perform successfully or have noteworthy success in
to hatch – bring forth or produce; devise; create
to fall apart – break down; collapse
schmoozing – idle conversation; chatter
to creep – to approach slowly, imperceptibly, or stealthily
unforeseen – not felt or realized beforehand; unexpected
to funnel – to concentrate, channel, or focus
Advisable Negotiation Techniques
Startup entrepreneurs are not always the best negotiators. They step into the shoes of a business owner for the first time and find — to their surprise — that nearly everything involves negotiation of some kind, and they may not always have those negotiation techniques down.
Starting a business requires, quite literally, hundreds of negotiations. Some are small, like securing the best price on printing your letterhead and business cards. Others are far bigger deals that can make or break your startup business from the get-go. Sometimes you are the buyer; other times the seller. Either way, the skills you need to be a good negotiator are the same.
For some small business owners, it comes naturally. They're the ones who started negotiating an allowance and extra TV time with their parents at age four. For most of us, however, it comes through effort and experience. Rarely is it something you learned as part of a formal education.
Here are ten tactics that can make you a better, more confident negotiator on behalf of your small business:
Ten Negotiation Techniques
Prepare, prepare, prepare. Enter a negotiation without proper preparation and you've already lost. Start with yourself. Make sure you are clear on what you really want out of the arrangement. Research the other side to better understand their needs as well as their strengths and weaknesses. Enlist help from experts, such as an accountant, attorney or tech guru. Pay attention to timing. Timing is important in any negotiation. Sure, you must know what to ask for. But be sensitive to when you ask for it. There are times to press ahead, and times to wait. When you are looking your best is the time to press for what you want. But beware of pushing too hard and poisoning any long-term relationship. Leave behind your ego. The best negotiators either don't care, or don't show they care about who gets credit for a successful deal. Their talent is in making the other side feel like the final agreement was all their idea.Ramp up your listening skills. The best negotiators are often quiet listeners who patiently let others have the floor while they make their case. They never interrupt. Encourage the other side to talk first. That helps set up one of negotiation's oldest maxims: Whoever mentions numbers first, loses. While that's not always true, it's generally better to sit tight and let the other side go first. Even if they don't mention numbers, it gives you a chance to ask what they are thinking. If you don't ask, you don't get. Anothertenet of negotiating is "Go high, or go home." As part of your preparation, define your highest justifiable price. As long as you can argue convincingly, don't be afraid to aim high. But no ultimatums, please. Take-it-or-leave-it offers are usually out of place. Anticipate compromise. You should expect to make concessions and plan what they might be. Of course, the other side is thinking the same, so never take their first offer. Even if it's better than you'd hoped for, practice your best look of disappointment and politely decline. You never know what else you can get. Offer and expect commitment. The glue that keeps deals from unraveling is an unshakable commitment to deliver. You should offer this comfort level to others. Likewise, avoid deals where the other side does not demonstrate commitment. Don't absorb their problems. In most negotiations, you will hear all of the other side's problems and reasons they can't give you what you want. They want their problems to become yours, but don't let them. Instead, deal with each as they come up and try to solve them. If their "budget" is too low, for example, maybe there are other places that money could come from. Stick to your principles. As an individual and a business owner, you likely have a set of guiding principles — values that you just won't compromise. If you find negotiations crossing those boundaries, it might be a deal you can live without. Close with confirmation. At the close of any meeting — even if no final deal is struck — recap the points covered and any areas of agreement. Make sure everyone confirms. Follow-up with appropriate letters or emails. Do not leave behind loose ends.
When it comes to entrepreneurial talents that spell success in the world of startups, the ability to negotiate well is one of the most vital attributes you can possess. Take care to develop this skill. Some people think they are good negotiators, but in reality are not. From bringing in good people, to arranging financing or nailing that first big deal, sound negotiating techniques will be essential.
A deal usually has several parts: the hatching of the idea by one party, then its conceptual embrace by the other side, and finally – the closing. The first two phases of a transaction or sales cycle are much easier than the last in most cases.
Sealing a deal – because of the prospect that it might fall apart before you get to that point – can put a lump in the throat of any small business owner.
Yet, there are ways to make yourself a better “closer” even if you’re not the natural schmoozing type and aren’t up on the latest sales techniques – you don’t even have to have ice water running through your veins.
Ideas for closing sales deals:
Get beyond “yes”: Time is your enemy. Once you’ve gotten your target to agree in principle that you’re going to make this deal, move them as quickly as possible toward getting it into writing. That’s because into the narrow opening between “yes” and signing on the dotted line common sales problems like second thoughts, competition or unforeseen events can creep. So if you get a verbal expression of interest, then move resolutely toward a verbal commitment, then as quickly as possible to a written agreement that hopefully closes out the sales cycle.
Create a sense of urgency: Sometimes the person on the other end of the deal will be happy to close it – when they can get around to it. Timing may be much more important to you. So if necessary, you want to create a sense of urgency to get their commitment, and that may require some final concessions to refocus their attention. This may involve offering a 2% greater discount, net-30 terms instead of net-10 requirements, or offering a two-year service agreement instead of one-year coverage. You’ll know what it takes.
Use the threat of competition: Unfortunately, in order to get the other side to close, sometimes an entrepreneur will have to get them to understand that if they don’t do the deal with you, you’ll do the deal with someone else. Sometimes this involves bluffing, sometimes enhancing the appeal of what you’re offering. But if you can convince the target of your deal making that you’re doing something that’s going to become powerful, everybody wants a piece of that.
Generate “late-breaking news”: Throughout the relationship-building and negotiating process and beyond, be funneling helpful new information to the other party. This might be a press release about a new product, a copy of a story about your business that you’ve managed to land in the local newspaper, the result of a new independent test of your service, or that one last testimonial from an existing customer that you’re keeping in your back pocket.
Be prepared to not close: The reality is that most deals don’t close, if you measure by the number of potential relationships and transactions that your company pursues. Something happens. There isn’t a fit. The timing isn’t right. You must disdain losing any deal and fight hard to land every last one. But you also need to be sober about the percentages – so you can raise them.