Having to negotiate a sale, purchase, deal or contract is a common requirement for the owners and managers of businesses. Excellent preparation and a logical approach can help you get the deal you want. Here are our top ten tips.
1. Do your research
Clarify your own objectives and make sure you understand what your client/ other party wants from the deal. For example, by doing some basic research into a potential supplier, you can work out how valuable your custom is to them.
2. Decide what is negotiable
Before you start to negotiate, draw up a list of factors that are most important to you. Decide what you are and aren’t prepared to compromise on. Key factors might include price, payment terms, outcomes, or delivery dates.
The key is to establish your preferred outcome, but remain realistic, because if you’re not prepared to compromise some negotiations won’t last long.
3. Plan your strategy
You need to plan your strategy in writing before beginning negotiations. This will help you set clear goals and work out where you will draw the line and walk away from the deal.
Decide the overall approach that you will adopt. Be clear about the type of deal you want and the priority you will give it.
Write down your negotiating strengths and how you might use them to get the concessions you require. Consider ways of defending the weaker parts of your argument and negating the supplier’s main strengths.
4. Select the best team
Once you’ve decided on your strategy it is essential that you get your negotiating team right. Who needs to be part of the team? Make sure the team have the skills required and, where necessary, use a specialist to negotiate in areas outside your expertise.
5. Choose the right time and place for negotiation
Ideally select a time and place where you are not under pressure to close the deal.
6. Outline your requirements
Open negotiations by outlining your requirements or terms and conditions and try to get your client or other party to reveal their starting point for discussions.
7. Ask questions and listen closely to answers
Listening closely to your client / other party and asking key questions will help you understand what your client / the other party wants to achieve. You may be able to get them to reveal how flexible they are on certain issues.
8. Understand your negotiating position
Understand your position. If you have to make concessions – look for reciprocation. Concessions can be two way, only make them to help you get the outcome you require or to help with longer term partnerships. You should avoid appearing too keen to do a deal, think about your strategy. Consider what offer the other party in the negotiations is likely to make and how you’ll respond.
9. Using tactics in negotiating
You need to be aware of common negotiating tactics. If the other party keeps referring to urgent deadlines or a person they need to confer with, they might be playing games.
Don’t be forced into making rushed decisions or unnecessary concessions, such as false deadlines. Each time a point is agreed, clarify that you’ve understood it correctly and write it down.
10. Draw up a contract
Once all the points have been negotiated and a deal has been agreed, it’s best to get a written contract drawn up and signed by both parties. While verbal contracts are legally binding – they are difficult to prove in court.
Most business owners would view a good deal as one that meets their own requirements as well as their clients. Although getting the best possible deal in the short-term is important, a good relationship in the future may help to achieve your longer term business outcomes.
Prospect can help….
We have a strong track record of supporting individuals, teams and organisations in developing their influencing and negotiation skills.
Prospect offers bespoke workshops for groups and organisations to support the development of negotiation and influencing skills, along with 1-1 coaching all of which can support your business being successful.
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