Learning to negotiate is the key to success as an entrepreneur. The Center for Economics and Business Research revealed that companies could increase their annual profits by 7% if they only improved their negotiating strategies. The main problem is that many entrepreneurs negotiate by letting their instinct drives themselves and end up making mistakes that result in less advantageous agreements. The good news is that negotiating is an art that is learned.
What do you need to know to learn to negotiate successfully?
1. Do your homework
Information is power. Sitting at a negotiation table without having investigated the company with which you negotiate implies leaving at a disadvantage. The more details you can discover about that investor or the company to which you want to sell your products or services, the better. You can use that information, for example, to present a personalized business proposal that arouses your interest in which you highlight the value you bring.
2. Make your conditions clear from the first moment
Negotiating consumes time, so it does not make much sense to move forward if you can not reach a first agreement on the basic points in which you are not willing to compromise. This advice to learn to negotiate may seem radical, but in the long term it will save you time and avoid many unsuccessful efforts so that you can concentrate your energy on negotiations that really bear fruit.
3. Determine in advance the concessions you are willing to make
In a negotiation, both parties must give something to reach an agreement. Cede terrain is perceived as a sign of goodwill and encourages the other party to give a little, so it is better to determine in advance the points to which you can give up to get that investment, contract or sale.
4. Practice active listening
One of the simplest negotiation strategies is to let the other person speak. Listening will make your interlocutor feel respected and will help you create a trusting relationship that facilitates negotiation. By letting him talk, you can also discover what his important points and red lines are, and you can even guess how much he is willing to give up. Do not look only at what he says but how he says it. Many times in a negotiation body language provides more clues than words.
5. Use the sense of humor
A negotiation is usually stressful for both parties, so a dose of humor can generate a positive psychological predisposition. A study conducted at the University of Oulu revealed that humor is a powerful tool when negotiating, especially at multicultural tables, as it reduces tension, mitigates the impact of possible offenses and helps introduce complex issues, so that negotiations where a sense of humor is present often come to fruition.
6. Leverage common interests
A strategy to negotiate is to detect the interests that you have in common with your interlocutor. Highlight the points on which you agree, the common experiences or the shared objectives will create a stronger bond and will make you not see yourself as adversaries but as two people who look in the same direction. Bringing up that common base also shows that you think about the other and you are able to put yourself in their place, a detail that your interlocutor will appreciate.
7. Use time intelligently
When you have to negotiate many details, trying to reach an agreement in a single meeting can be strenuous and even counterproductive. After long hours of negotiation, both parties will be tired, exhaustion that will be reflected in their attitudes. A study conducted at the University of Amsterdam showed that when we are negotiating under pressure over time, we are more prone to stereotype our interlocutor and do not think much about our arguments, so we reach less advantageous agreements.
Therefore, if you want to learn to negotiate, do not rush. Do not pressure your interlocutor or let them press you. It is better that you take time to reflect on the points of negotiation and, if necessary, take it up again. Do not throw away the road traveled just because tiredness has confused you.