Business negotiations are a challenging practice. And there’s a big difference between a skilled negotiator and an amateur. However, a lot can be said for having the right preparation behind you – being better prepared can give a novice the edge over even the most seasoned expert. The trouble is knowing what to prepare and how. That’s why we’ve put together this negotiation checklist, so you can go in confidently, with your ducks in a row.
1. Do your research
How you approach the negotiation is going to be heavily influenced by who the other party is. So, getting a clear picture of who’ll be on the opposite side of the exchange is a logical and advisable first step in your preparations. Learn about their company and, if you can, deals they’ve made in the past – the good and the bad – to get an idea of what a positive outcome might actually look like.
See who you’ll be personally dealing with. Decide on the best way to approach them and make sure that someone involved on the other side is a decision maker. You’re off to a bad start if the people you’re dealing with don’t have the authority to offer any kind of concessions or compromises.
2. Form the team
Now you know what the other side looks like, you should think about who’s going to be taking part on your side. Figure out who’s coming to the negotiation and what role they’ll play.
In an ideal situation, negotiations will be done as a team, ideally of three people, especially in a high-stakes scenario. This provides room for a lead negotiator (the most skilled and informed), a summariser (the scribe and timekeeper) and an observer (someone in a senior role). The three-pronged approach provides room for adequate support for the lead negotiator.
3. Make a game plan
Having a methodology or strategy for negotiation, both at an organisational level and on a personal level, will provide a good foundation to walk in with. That being said, you need flexibility in order to compromise and field curveballs should they come your way. So, whilst strategy is a great point of departure, it shouldn’t override setting tactics for what you want to get out of the exchange at hand.
Don’t make the classic mistake of walking in without a clear idea of what outcomes you actually want. Here lies a tendency seen in many preparatory contexts – the most important detail is overlooked. In figuring out how you’ll approach the exchange, ask yourself: what do you aim to get out of the negotiation? And of these things, what are your priorities? This will help you figure out what’s essential versus what’s desirable.
4. Find your leverage
Whilst you consider what would be the best deal for you, put yourself in the shoes of the other party. Think about how you can sweeten the deal for them, the things that may be of high-value to them yet come at a low cost for you – your bargaining chips.
Look at what you can add to your offer – and how that would then affect your asking price. Decide how much you’re willing to compromise before it’s time to take a break and re-assess. Flexibility is important, but this is also a crucial thing to have in your back pocket: the willingness to walk away.
Octet’s finance solutions can help businesses gain leverage in the exchange and add power to your arsenal. With the right tools you could:
- Offer a shorter waiting time for payment.
- Increase the order size in exchange for a discount.
- Open up a conversation about future business.
These examples will give you buying power that may come in handy at the negotiation table.
5. Choose your setting
Consider the setting for your engagement. Meeting face to face is always the best way to do negotiations. Decide whether you’re meeting at your office, theirs or on neutral ground.
Food is also an important factor to take into account. It might sound trivial, but having something to eat in the negotiation room is actually proven to produce better, more profitable outcomes. Sitting down to lunch and sharing a meal is what people do when they’re relaxed and on friendly terms. So, it follows that doing the same within the context of business makes both parties more likely to be open and cooperative – the recipe for fruitful negotiations.
From finance to food, there are a few tangible resources you can call on to put your best foot forward. In addition, simply plotting a course and doing relevant research is going to go a long way when it comes to business negotiations. So, if you take the time to prepare well, then you’re off to a good start before the process itself has even begun.
Read more in Powering Business Issue 1: The Power of Negotiation.