Negotiation tips for small business owners
Sharpen your negotiation skills with these tips from small business expert, Melinda Emerson.
Negotiation is an important part of running any business, regardless of your industry. Whether you're negotiating with vendors, clients, suppliers, landlords or employees, negotiating every contract you sign will help you get the best possible agreements for your business.
Here are a few tips to remember when you're sitting at the negotiating table.
Know your objective. Be clear about what you want to achieve in your business deal. Are you trying to get a client to pay for changes that are out of scope? Are you negotiating a higher price for your product? Are you asking a vendor to extend credit terms? Part of this includes knowing when you're willing to walk away. Sometimes it's better to leave a deal on the table than to hash out a settlement that's not in your business's best interest.
Be prepared. Gather as much information as possible regarding the person or organization you're negotiating with, as well as the central issue of your negotiation. The better you understand the situation, the more likely it will be that you can offer something that will make the situation a win-win for both parties. For example, if you want to save money on your business's electricity bill, it could be helpful to research how much it would cost to retrofit your rental space to make it more energy-efficient, as well as how much you could save on energy bills each month. With these figures in hand, you could propose a plan to share your cost savings with your landlord to help offset the renovation costs.
Communicate clearly. Set the tone of the meeting by outlining your business objectives and what you're bringing to the table. That way, if the other party offers a solution that doesn't meet your needs, it's easier to explain why that arrangement won't work for you. If the other party understands your business needs, they may even be able to offer an unexpected solution.
Ask questions. To make sure you understand the other party's points, repeat your interpretation of their position and ask them to confirm or clarify, if needed. For instance, if a vendor offers you a 10 percent discount on bulk purchases, asking what qualifies for a bulk purchase and how frequently you have to order to receive the discount will help you better understand the business implications of their offer.
While using these techniques won't guarantee you a win every time, they will help you put your best foot forward. Knowing what you want and how to ask for it can give you the upper hand you need to get the best deal for your business.