How to Improve your Small Business Negotiation Skills
For the small business owner, negotiation is a part of doing business. Small businesses need products or services from other companies to maintain daily operations. The small business owner must seek to keep costs low, thereby giving the small business the best chance for profitability.
Small business owners can accomplish this through negotiating with your suppliers. While negotiation may seem like a daunting task, it is done for the sake of the business. Here are some suggestions that will help you prepare and build confidence for negotiation.
Know Thyself and Thy Opposition
Before sitting at the negotiation table, know what your business needs. Keep in mind that your small business has an optimal solution that will meet all needs. While the goal of negotiation is to obtain that optimal solution, this rarely occurs. The small business owner must have alternative solutions prior to entering into negotiation.
After understanding your business, get to know the opposing party of the negotiation. Determine the strengths, weaknesses, and what the opposing party wishes to gain through the negotiation. Remember, they also have an optimal solution as well as alternative solutions. Gaining knowledge about the opposing party helps you to see where possible trade-offs can occur.
Expect to Compromise
Both parties of a negotiation have an optimal solution they wish to gain through negotiation. As stated earlier, obtaining the optimal solution rarely occurs. Expect to compromise. Understand when and where to make sacrifices.
It is good to enter into a negotiation knowing where to stand firm and where to be flexible. All scenarios must lead to accomplishing the overall goals of your business. Also, show a willingness to compromise. It is easier to gain the trust of the opposing party if they feel you want to reach a "fair" deal.
Watch and Listen
During negotiations, pay close attention to the reactions of the opposing party. Certain suggestions and requests elicit emotional responses from the opposition. By being attentive, you avoid any misinterpretations that may hurt your chances of reaching an agreement. In addition, the opposing party will be watching you closely, using any signs of weakness to their advantage.
The Optimal Solution Goes First
Prioritize the needs of your small business before the negotiation. Enter the negotiation with the expectation to fill some of those needs. Ask for everything you feel your business needs up front. Even if you expect sacrifices, initially asking for less than the optimal solution defeats the purpose of negotiation. Make your offer and then wait for the counteroffer. After the counteroffer is when you can make your adjustments.
Improving your negotiation skills helps your small business to grow. Although you may begin shakily, with time and experience, you will get a better idea of how to approach a negotiation. With this improvement, more business needs will be satisfied and you will build a rapport with the suppliers. This rapport will lead to more negotiations leaning in the favor of your small business. This increases the likelihood of your small business being profitable