06 Dec When Ready to Deal, Remember These Four Principles
What comes to mind when you hear the word, “negotiate?” Do you think about getting the best deal or the lowest price? Does the word conjure up unpleasant thoughts of painful tactics to avoid giving anything up?
If any of this rings true, you probably aren’t alone. For most people, the idea of negotiating a business deal—whether from the buyer’s seat or the seller’s side of the table—is mostly an exercise in safeguarding completely their interests and avoiding any sort of extra “give” in the transaction.
A talent for negotiating successfully is not an easy skill to develop, primarily because most people don’t really understand what is truly meant by the word “negotiating,” which is actually derived from a Latin word meaning to carry on business. So, the goal of negotiating shouldn’t be just about getting the best price. The goal for negotiating should be about continuing to do business by communicating with another party until reaching agreement.
Here are four principles for negotiation, which you should try never to violate:
1. Always Be the Initiator. It sounds too simple to be true, but almost without fail, you’ll find that whoever controls the start of the negotiations tends to control the close of negotiations. Let the other party begin, and you will find yourself constantly in response mode, often giving up control without even realizing it. It’s even possible to allow the other party to start negotiations inadvertently, simply by asking a question. For example, if you ask anything dollar-related, you will find yourself forever focused on their number and not your own.
2. Always Put It in Writing. Negotiations are not about long hours of verbal back and forth. Negotiations are about arriving at a signed, formal written agreement. When sitting down with someone in a business deal, a written document should be developed as you speak. It should include every point of agreement. Not only is it a waste of your time to do things twice—negotiate verbally, then return with those same points in written form—but you also run greater risk of inaccuracies entering the picture, sparking debate all over again.
3. Know What You Want. Whichever side of the negotiating table you sit on, it can be surprisingly difficult to pinpoint exactly what it is that you want from the deal. That’s because such an exercise involves not only identifying your wants, but prioritizing them. You will also do well to differentiate your goals from the available avenues for achieving them. At times, you will have perfectly reasonable goals, but the route to making them happen may need to be scrapped in favor of another method.
4. Keep Your Cool. College business students may be receiving a quality education on other facets of the business world, but few are probably schooled in what to do when entering a negotiating room full of oversized egos, personal agendas and over-the-top emotions. When you’re involved in buy-sell negotiations, you can expect any or all of the above. Resist any temptations to call names or get angry. Instead, rise above and show the leadership so obviously needed. Use logic and facts to make your points and close the deal.