Negotiation is an important skill in business. Besides being an essential sales skill, negotiation skills also help you deal with suppliers, employees, and with formal transactions like buying or selling business assets, your lease, and other legal contracts.
A good negotiation leaves each party satisfied and ready to do business with each other again. Talented negotiators build better relationships, deliver lasting, quality solutions and help you avoid future problems and conflicts.
Everyone can improve their negotiation skills. Here are some tips:
Legal advice before signing contracts
- Find out as much as you can about the other party. For a customer, try and find out about their situation and needs beforehand. Where this isn’t practical, market research can help you understand the typical needs of your customers.
- You should also consider your competitors and what they can offer. For a supplier, you could look into their prices, products, customers and competitors. Then, take a look at your own strengths, weaknesses and bottom line. Consider how far can you afford to negotiate and when should you draw the line.
- Listen to your customer. Ask questions to understand your customers needs. Often, when business owners have something really good to offer, they push their own views of why that is onto the customer. People are convinced by their own reasons, not your reasons. Understand and respect the buyer’s perspective.
- Don’t try to convince someone they’re wrong, or have the mindset that you want to change their mind. Show them they can get something they want but under conditions which are good for you.
- Know your highest price you can justify to your customers and prepare reasons for why your product or service is worth the price. Start at the top, as long as you can justify it, and work your way down from there. There is no harm in asking – if you don’t ask, you can’t expect to get.
- You do not need to automatically accept the contract terms a customer offers you. Remember, it’s their job to get the best possible outcome for them. Be particularly wary of unfairly punitive contract clauses.
Get help when negotiations fail. Even with the best preparation, you may not always be able to negotiate a successful outcome.