Business negotiation techniques are one of the essential elements for success in business. Business negotiation means an initial discussion between the parties to reach an agreement. Negotiation in its entirety doesn’t only mean getting more money, but also creating more value.
Negotiation is the part of the entrepreneur’s everyday life. If you are new in business or are planning to start a business then one of the best capabilities you should have is the capacity to negotiate. Here we are looking at the process involved in business negotiations and how to fix a win-win deal.
Self-confidence makes you win deals but what makes you confident is preparation. First of all, think about the outcome you want from a deal and its benefits. Draw a detailed picture about the details of the deal and think about the actual outcome of how much you can extend the limit to get the maximum long-term benefits. To create value, you must set the goal by considering not only you but also the people around you. Always set the goal for a deal to create a win-win situation for everyone and this will enhance the chance for you to win the deal. For example, if you are starting an advertising agency and a small sized company invites you to do their advertising campaign for one year on a commission basis, then try to do it on a monthly retainer fee basis. As a startup, the retainer fee model will work well for your bottom line.
To win a deal you should be well aware of the opportunities, as well as your and your counterpart’s weaknesses. Study all the possible strengths and weaknesses of your counterpart in the deal and then determine how you can use them as an opportunity. All business agreements are based on today’s market conditions, so it is better to consider the viability of the agreement when the market changes in the future. Take all the future market conditions, which may favour you as your opportunities. The more opportunities you create, the better your chances of winning the deal.
For example, as an advertising agency, you are invited by a company to present an advertising campaign for one year and you find out that their media plan is weak. Then provide them free consulting for media plan preparation and include it in your package.
Bundling alternative proposals is one of the evergreen business negotiation techniques used by all great companies in the world. All deals are not for winning, so be prepared for the time to walk away from it. According to the size and time, a deal may be very important for your organization. In this case, it is always good to have alternative proposals to help you close the deal. Prepare the best and most beneficial alternative proposals for your counterpart and propose them one by one, if they feel that your first proposal is not good enough. Studies show that 47% of highly competitive deals have been closed by companies with alternative proposals.
For example, let’s imagine that you urgently need some building materials to complete an ongoing project within a limited budget and already have identified a well-known supplier. Here are a few alternative options:
- Get separate quotes for materials, handling charges and transportation. Then pay them only the material cost and use your own manpower for handling and transportation purposes.
2. Before entering into business negotiations, get quotes from two or three other suppliers.
3. See if you can identify any other business looking for the same commodities. Then join hands with them to go for bigger volume purchases. When the volume increases, the price will automatically decrease.
Get the deal
This is the final stage where all your preparations meet the opportunity. Prioritize all your proposals and start discussing them without getting into any kind of arguments. Never let your ego work for you. Carefully discuss things and give space, use silence to observe your counterpart’s gestures and body language. Don’t push or rush them, but gently convince them to get a desired positive result. If you are a great negotiator then you should have the ability to express unhappiness through your body language when things go beyond your comfort level. If you feel that your counterpart is offering you the maximum, then make space to ask for something extra. But don’t forget the golden rule in business negotiation techniques ‘always be ready to walk away.’