8 Negotiation Skills Small Business Owners Should Know

An often overlooked skill in small business is negotiation. Your business will need to interact and make deals with other businesses and sometimes shrewd high end customers or clients to succeed. If you lack the proper negotiation skills, you will continue to be on the losing end of critical negotiations that may negatively impact your business for years to come.

The Negotiation Process

The negotiation process includes analyzing the problem or the gap, preparing, discussing, goal clarification, working toward a win-win outcome, making an agreement, and finally implementation of the decision.  By looking at the process, you can see which skills will be useful to learn if you want to become a master negotiator.

Clearly Analyze the Problem and Identify Interests and Goals

Effective negotiators must have the skills to analyze a problem to determine the interests of each party in the negotiation. A detailed problem analysis identifies the issue, the interested parties and the outcome goals. 

Study Effective Verbal Communication 

When you negotiate with people you are communicating with them, usually face to face in a verbal way. Understanding how communication works will help you a lot. You’ll discover that you need to know a lot about your audience so you can choose the right words and frame the discussion correctly. 

Learn How to Listen More

Part of communication is learning to listen to the meaning of what people are saying. The words used can get in the way of purpose when there is no agreement on definitions. Listening more than you talk, asking questions for clarification, and verifying an understanding are going to boost your negotiation skills. 

Prepare for Negotiations 

Don’t go into any situation that you are expected to negotiate without getting to know the stakeholders well. Not only that, learn about the entire situation and the different stances that both sides are taking regarding getting an agreement. You might want to look at other scenarios aside from the ones that you’ve both come up with in case you need a new idea.

Clarify Joint Goals to Focus on Where You Agree

As you discuss the issues at hand, start with where you agree. Get the things you do decide on in writing from the start of your meeting. That way you start from a secure place with both of you happy about where you stand on the things you agree on. 

Reflect Your Thoughts to Reduce Misunderstandings

When you are conversing with people, always talk to them about what you think you understood and heard before moving on. Sometimes what we think we hear is not at all what the other person was getting to.  Even if it seems obvious, state it out loud to be sure.

Build Rapport to Focus on Creating a Win-Win Agreement

Building Rapport is about relationship and trust. Focus on solving problems instead of bringing up more roadblocks. When a problem arises, try to overcome it and solve it. If you cannot right away move on to another area is fine. However, putting a pin in the discussion doesn’t mean you won’t come back to it. 

Make the Agreement Sooner Rather Than Later

Once you have agreed on something, get it in writing. That way, you can simply move on, and you have it down. For example, when something is agreed upon if you’re recording the discussion then it can be written up. If you’re not recording, have the other person, and you initial the agreement where you agree.

Implement the Actions Agreed On in the Negotiations

As soon as possible, start implementing what you’ve agreed upon after the negotiation. Don’t wait. Set up a schedule to follow the agreement right away.

As a small business owner you will find yourself in regular negotiations, whether with vendors, customers, employees or landlords. Remember that to be really be good at negotiation, you need to find where you agree, then focus on the places you can meet in the middle, and finally put your focus on the hardline issues and make compromises. When leaving the negotiating table both parties should feel as if they both won some things and lost some ideas but be generally happy if not thrilled with the results. 

If negotiations skills are not your strongest asset, reach out to one of our coaches to discuss how we may be able to help you improve these skills to make you a better business owner.