Developing Good Negotiating Skills

Whether you’re a business owner, sales manager or senior-level executive, you will most likely have to be part of a negotiation at some point in your professional career.  In many cases, negotiating is one of the most important activities a business person can participate in.  Negotiating poorly can cost a lot of money.  There are many views on how to negotiate properly and everyone has their own strategies and philosophies.  Here are some of mine.

Make the First Move

It’s important to remember that whoever initiates the discussion at the negotiating table sets the mood for the entire negotiation.  It’s not a bad idea to compose a short blurb ahead of time but don’t seem as if you’ve rehearsed it.  Speak naturally and don’t be afraid to ask questions that you think might make you appear unknowledgeable.

Know the Deal

Be prepared by researching all aspects of the deal and know the ins and outs better than anyone else in the room.  Anticipate worse case scenarios and be ready to deal with them if or when they occur.  If you think the person or people you are negotiating with will object to a particular aspect of the deal, it’s usually a good idea for you to mention it first, rather than having them discover it and then you having to react to their objection.  Taking it upon yourself to mention something that doesn’t necessarily benefit you builds trust with the other people in the room.

Observe

Try to pick up on subtle nuances and unspoken expressions.  You may have to use your intuition for this and try to guess what people are thinking or how they’re feeling.  Even more so than words, notice tone of voice, facial expressions and body language.  When someone does speak, listen and listen carefully. It’s always a good idea to listen more than you speak when negotiating.  If you over talk, you can seem too pushy.  The key is to be assertive, not aggressive and maintain eye contact at all times.  If you don’t maintain eye contact, you could appear untrustworthy. Avoid arguments as they are never productive at the negotiating table.

Avoid Making the First Offer if Possible

When the topic of money is brought up, try to get the other side to suggest a price first, if possible.  If you’re not happy with the price, you can always counteroffer.  However, if you suggest a price first and they were thinking a higher or lower number, there’s nowhere to go from there.  If you are forced into making the first offer, try to highball (or lowball) the offer depending on which direction you want it to go.  You’d be surprised how many times people will accept a ridiculous offer.  Some people have different opinions on this tactic. 

It’s also never a good idea to accept the first offer.  If you don’t make the first offer, you’re already at an advantage.  Also, never disclose your bottom line or break-even point.  It will never benefit you to do this and you give the other party more ammunition to sway the negotiation in their favor.

Stay Calm

The best negotiators are not emotional.  Regardless of what is being said during the negotiation, don’t let it fluster you.  Having this type of thick-skinned approach will put you at an advantage from a psychological perspective.  If you feel the other party is attempting to engage you in battle, don’t take the bait.  It won’t get you anywhere.

Don’t Be Afraid to Walk Away

Remember that there may be circumstances when the right thing to do is to walk away from a deal.  Don’t be afraid to say no.  You’d be surprised how many times your deal will come through after the fact.  Either way, it’s better than settling for an outcome that you’re not happy with.