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Ultimate guide to negotiating like a pro

Posted by Shivali Anand

December 7, 2021    |     5-minute read (807 words)

Two people shaking hands

Every entrepreneur must bargain at some time, whether it's over a client transaction, with a vendor or the cost of the rent. Here are 16 recommendations for business owners to ramp up their negotiation skills with class.

  1. Allow the other party to initiate the negotiation

Ask the other person to make the initial offer so you understand what they want and why they need to reach an agreement. Always construct the initial version of the deal in light of the other side's concerns and perspective.

  1. Listen carefully 

In a negotiation, giving the other party enough time to talk lets you figure out which topics matter most to them, and which may be easiest to drop. Listening closely should help you understand where the talks are headed.

  1. Do a background study

To succeed in a negotiation requires thorough preparation. The higher the stakes, the more planning is required. Gather information on the firm or client with whom you wish to negotiate. Asses their requirements, strengths and limitations, available solutions, industry and business model.

  1. Be ready to walk

Before you even begin negotiating, choosing a walk-away point can help you be more prepared. Don’t force your offer on the other party, and if the transaction isn't right, walk away.

  1. Understand the other party’s interests

Everyone sees the world differently, so if you can figure out the other side’s perspective on the transaction, you'll be able to bargain more successfully. You may be able to draft an agreement that meets both sides' demands by recognizing the other party's interests. Demonstrate to the other party that you're prepared to negotiate and compromise for a mutually beneficial outcome. Preparing a plan based on your possible partner's weak points might help you negotiate better terms.

  1. Identify your target audience

Understanding the priorities of the other party can help you tailor your response to meet their needs. Present facts that show what you can do to meet their demands. 

  1. Make a strategy that benefits both sides

A win-win mindset can assist improve your negotiation skills. Creating a win-win negotiation agreement typically consists of these three steps:

  • List each sides' interests and how they could be met in a way that pleases everyone.
  • Offer concessions that are meaningful to the opposing side.
  • Propose an agreement that meets the requirements of both parties.
Remember that if both sides are happy, it could lead to a long-term, prosperous relationship.

  1. Save confirmation for the end

Avoid a deal if the other party doesn’t show a commitment. Ensure that everyone agrees with all terms and conditions. Don't leave loose ends hanging, and send follow-up letters or emails as needed.

  1. Be assertive 

An assertive (not aggressive) manner will increase the chances of an excellent business outcome. Assertive communicators use positive body language and professional etiquette, and they are confident and respectful. This makes the other side more amenable to listening and behaving in kind.

  1. Take nothing personally

Don't get interested in anything that isn't related to the negotiation. Maintain your concentration to attain your goal, even if the other side is nasty or hostile. Try to find out what the other side is hoping to gain from the negotiation.

  1.  Set clear objectives for your negotiations

List the objectives and best-case scenarios you aim to achieve during the negotiating process. Ensure you know what you want. Before entering the discussion, prepare your questions and explain why the other party should consider your proposal. Always strive for the best while setting reasonable goals. If you honestly feel you deserve something, go ahead and ask for it.

  1.  Get something in return

During negotiations, agreeing to concessions is unavoidable. If you must give anything away, strive to gain something in return. Make sure your concessions befit the client's time and effort, so they understand the value.

  1.  Present multiple offers simultaneously

Consider making numerous offers at once, each of which is equally valuable. If the other person rejects all of your proposals, inquire which one they prefer and why. Then, if possible, strengthen that offer and draft a letter of understanding to reflect the agreement.

  1.  Set a deadline for your offer to expire

Provide your negotiation partner with a deadline for accepting or rejecting your offer, assuming you feel you’ve made a realistic offer. Providing an expiration date prompts the other party to treat it as a top priority.

  1.  Negotiate damages in advance

Since contingency agreements may not cover every circumstance, consider adding damage clauses and the amount to be paid if someone breaks the contract.

  1.  Plan for what-if scenarios

You and your partner may have conflicts of interest during the negotiation. Try to anticipate potential issues in advance and prepare a solution. Prepare for best and worst-case situations before beginning discussions. If things don't go your way, rethink your negotiating technique and business terms and return to the table. 

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