In Focus Collections
Top three most effective negotiation tactics
The correct preparation will put you in the best situation to succeed
Tony Hughes Chief executive, Huthwaite International
It can feel like, as a small business, you are already on the back foot when it comes to negotiations, especially if you are negotiating with a larger business. A failed negotiation can be detrimental
to a business; not only can it cost lost revenue, it can have a lasting impact on the continued success and dynamic of a team in terms of confidence and power when considering further negotiations. And unlike a larger business, small SMEs
will not have a dedicated team to negotiate contracts. Most of the time it will fall on the new
business team, sales team or even the managing director.
As such, it is essential that businesses
consider how these team members can be trained to ensure effective negotiating skills are a team strength, not a weakness. With this in mind, here are some imperative considerations for small businesses to consider before approaching any negotiation.
Establish trust There are lots of reasons that businesses prefer to use small companies as suppliers. Smaller, family-run businesses are often perceived as being more trustworthy. Building a reputation as an honest
business will automatically gain you the upper hand in negotiations. When people know they can trust you, you place yourself in a stronger position. Other professionals are more willing to
You will still get a favourable deal if you choose to compromise, as long as you have a clear understanding of your own boundaries, whilst considering what the other party values in the relationship. Often giving a little in the short term, can lead to a valuable return in the long run
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negotiate when they trust that you will act in good faith. This means that when it comes to talking about the benefits and strengths of your product or business, you are all the more convincing. A little honesty can go a long way when
negotiating. Plus, it will also help to strengthen longer lasting relationships in the long run. And all good business people know it is
easier and more cost effective to up-sell and repeat sell, than to constantly spend time seeking out new business leads or sales.
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Prepare to compromise Negotiations often come to be because one party or another is not happy with pre-agreed set terms. This can begin with a series of
discussions on what you can and cannot offer. It could be as simple as a smaller price for an extended contract, or it could be far more complex. When you walk into a meeting that will
involve substantial amounts of negotiating, it is essential that you know what you can and cannot compromise on. In an ideal scenario, both parties should
leave negotiations feeling happy with the final deal and that it is a mutually beneficial agreement. Therefore, it makes sense that both parties
should compromise as part of a successful negotiation. If you lack leverage and fail to show willing to compromise, it is likely to kill the deal that you are looking to make. You will still get a favourable deal if you
choose to compromise, as long as you have a clear understanding of your own boundaries, whilst considering what the other party values in the relationship. Often giving a little in the short term, can lead to a valuable return in the long run.
Set the conditions If possible, set the conditions of the negotiation. You have more power this way.
February 2020
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