Negotiation is one of the most powerful tools to increase sales. A lousy negotiation can either make or break your business. To maintain the profitability of your business, you need to master this trade. But, how do you make a good negotiation? How can you master this skill?
Mario Puzo has rightly said in his book The Godfather, “I’ll make him a deal he can’t refuse.” This applies in your negotiations as well. A good set of communication skills, maintaining balance, studying the body language of the person you are negotiating with, are some things you need to keep in mind. But, let's understand the importance of negotiation in business.
● Prepare yourself: You need to do your homework well. Do thorough research on the person or firm you are negotiating with. Study the person sitting opposite to you. Make your move accordingly. Is someone offering you a product or service?
Gather as much information you can about the company, product and the services they offer you. Your lack of knowledge is an advantage for them. It will give the negotiators many loose ends to take over the negotiation in their favor. And you don’t want that, right?
● Perfect timings: Timings are very critical. Be patient. Let them complete and then you take over. You should let the negotiator put their terms first. In this way, you can make a good bargain. Sometimes, you will have to let silence prevail in the conversation. In every conversation, there comes a point when one person loses patience. Shoot your points at the right time.
● Understand the dynamics: You should focus on, Who is in need of this negotiation? On the failure of this negotiation, what options does the other side have? These dynamics are very important for your negotiation. Try getting answers to these before the negotiation commences.
● Walk away when needed: You are not at the leverage of the negotiation. Play poker with the other side. You feel that the negotiations are not going on your terms, just walk away. For this, keep your targets and prices ready.
● Be the decision maker: You have to be on the deciding end. This helps you in concluding your deal on your terms and conditions. Dominate the meeting with your presence. You can win over a negotiation easily when you can make decisions.
Believe in your goal, the potential end offer and what to do as a "backup plan". Take into account the different likely results of the negotiations, and any future challenges. A good outcome is that you can identify and anticipate conceivable challenges so that you can take a position that is the best for you. Thus it is important to set negotiation goals.
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You might still be uncomfortable with the bid you didn't think about or one aspect of the bargain you hadn't taken into consideration. The scenarios may help you to feel less attached to the result, but they are just in your head. You should treat the whole thing as a game. And note, the negotiations are like the latter; the more you prepare, the easier you are bound to get.
Walk Way if Necessary
You come out with a position of confidence as you enter into negotiations to realize that you are prepared to go if things might not be as expected. Hence it is necessary to remain neutral to negotiate successfully. If you just quit and walk away, you can't be manipulated into a deal or a negotiation. But we also claim that this contract means to us all. Our ego participates, which weakens our status. Afterall , The Art of Negotiation is all about setting up a mindset.
Closure of The Deal
It's normal to feel protective as you enter into discussions when you negotiate a long-term business contract or start a short sell. Negotiations may feel like a random game but are more like a chess game. Strong timing and the opportunity to predict the next step on the other hand are important for fruitful negotiations.
You should have a sound sense of what they are trying to bring out of the contract if you have completed the preparatory work and negotiate with good conscience. And, of course, your bottom line should be transparent. Either you work to gradually get the sides together, or the agreement doesn't go anywhere.
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To conclude, as far as business skills are concerned, the ability to negotiate well in the world of entrepreneurship is one of the most important elements one can possess. Thus, reasonable negotiation tactics are very important, whether they include decent individuals, arranging finance or nailing the first big business.