The Business Negotiation Skills Every Business Owner Needs

Skilled negotiators understand that negotiation enters every aspect of life today. It’s a fast-paced world out there, and people use negotiation tactics every day in both their personal and professional lives. The negotiation process can be summed up pretty simply: negotiation is “working side by side with others to achieve some beneficial result.”

The bad news? For most people, these essential negotiation skills aren’t part of their formal education. Most have to learn the basics of successful negotiation over time. No matter someone’s age or other skills, it’s possible to learn and improve negotiation, building common ground with another party and finding a mutually beneficial outcome. This guide walks through several important things that business owners (and general professionals alike) should remember when developing their negotiation strategies.

A good negotiator acts collaboratively, not competitively.

The best negotiators don’t keep a “me against you” mentality. Instead, they reframe their thinking and view the other party as a partner at the bargaining table; in their mind, both parties need to walk away from the negotiation with a benefit.

In a good negotiated agreement, neither party just “gives something away.” There’s give and take, so good negotiators consider the other party’s perspective so they can reach a mutually beneficial solution.

Focus on building relationships with individuals, not institutions or corporations.

No one can reach a creative solution if they’re trying to negotiate with a huge corporation. Instead, they need to negotiate with the individual working at that business. It’s a simple mindset shift, but it’s a powerful one.

Look at it this way: suppose an author is negotiating their next book deal. On paper, they might be negotiating with a big publisher like Penguin Random House or HarperCollins. But in practice, they’re actually negotiating with an acquisitions editor at those houses. It’s much easier to focus on building rapport (essential if one is to negotiate effectively) with an individual.

To build a relationship, a would-be negotiator needs to display active listening, which shows the other person that their time and what they have to say is valuable. Whether the negotiation is occurring to settle disputes or set up a new work agreement, it’s essential to work with the other party on an individual level.

A master negotiator increases their expectations.

In the business world (and beyond), a negotiator usually gets what they expect to get at the negotiating table. So if someone walks into the negotiation expecting that they won’t get the contract, there’s a good chance they won’t. If they think the contract disputes will skew heavily in the other person’s favor, they probably will. But someone who expects to get what they want during complex negotiations is more likely to do so. Even if they don’t get every single term and condition they’re hoping for, they’ll probably still get a reasonably favorable outcome.

But why does this work? It’s all about mentality. There’s no way a negotiator can put their best foot forward if, at the back of their mind, they don’t think they’ll succeed. Confidence can be one of the best negotiation tactics.

Successful negotiators know what they want in a possible agreement.

Even if a business owner has the most powerful negotiating skills in the world, they probably won’t be successful at the table if they don’t know what they want to get.

Some business owners don’t even realize they’re hampering their own ability to negotiate by overlooking this. Maybe they walk into the session thinking, “Let’s just see what they’ll offer us.” But why should the other party decide exactly what the business owner gets? No one understands the business’s unique needs like its owner; that’s why it’s often prudent for the business owner to advocate for their needs and wants, seek feedback on those goals, and ideally, find a win-win solution.

Stay focused on the real issues.

Many effective negotiators find it helpful to define three things: what terms they absolutely need to get from the negotiations, what would be nice to have, and what they’re willing to give up to reach an agreement. And it’s best to define those categories in advance.

Here’s why: in the proverbial “heat of battle” when conflict arises at the negotiating table, it’s tricky for a negotiator to decide what they can and can’t give up. Too often, business owners find themselves with a written contract, only to realize that they gave up too much during the pressure situation. But those who know their proverbial “lines in the sand” ahead of time are more likely to handle the conflict resolution stage of negotiations more favorably.

Prepare.

One of the most essential skills a negotiator can foster is simply doing their homework. Who will they be negotiating with? Is the other business innovative or conservative in its practices? Is the other negotiator very creative, or are they academic? If two or more parties are attending the negotiation, do they know each other already? If so, what’s their relationship like? If not, what common ground do they have?

While it’d be ideal for a business owner to have a deep understanding of every person they’re negotiating with, that’s rarely possible. But even a little information can help a negotiator build rapport with the other party (or parties). That always makes it easier to reach agreements.

Here’s an example. When two people are interviewing for a new job, who’s more likely to get the job offer: the person who came to the interview with no clue about how the business operates, or the person who researched enough about the business to know tangible ways that they could provide greater value to it? A job interview is a kind of negotiating table, and in a similar way, a business owner can take that tactic to their own negotiations.

Thanks to the internet, it’s fairly simple to learn something about most professionals today. A simple Google search or glance at a LinkedIn profile or website can provide helpful information.

Savvy negotiators make time their ally.

Time is money, right? But the bad news is that every single person at the negotiation table has a limited amount of time. Everyone has a deadline that they need to meet in regard to that negotiation. Maybe they need the product the other party is selling by a specific date, or perhaps they can only meet for an hour during the actual negotiation.

Many pro negotiators try to know the other party’s deadline without giving away their own. The closer the deadline looms, the more likely the other party is to make a concession. A shrewd negotiator can use that sense of desperation to their own advantage.

Conclusion

This blog has discussed just a few strategies that negotiators should keep in mind when they’re trying to improve their negotiation skills. Will getting better at negotiating take time and effort? Absolutely. But business owners know that becoming a more efficient, smarter negotiator can yield results in both their personal and professional life.