As an entrepreneur, you wear a lot of hats. You’re the CEO who’s responsible for selling the big-picture vision. The CFO that’s trying to cut costs and increase revenue. The COO making sure the trains run on time. You’re also the head of HR, responsible for attracting and retaining top talent. All of these “hats” come with their own unique challenges. However, there’s one skill that can boost positive outcomes no matter the role: negotiating. Keep reading to learn negotiation skills entrepreneurs need to master.
Winging negotiations is short-changing yourself. You’re unlikely to get the best possible outcome without doing your homework first. Preparation allows you to collect information to make more informed decisions. It also gives you a chance to dig into your counterpart’s head and heart to understand their position.
Being well prepared also lends an air of confidence and authority to your demeanor. When you walk into a meeting, knowing exactly what you want, you project an image of strength and competence. People tend to give more ground to those they perceive as being in a position of power.
To help you prepare, try these tips from the business training pros at negotiations.com:
- Be clear about what you want to achieve with this negotiation.
- Gather as much information as you can about the other side, their interests, and what they might be willing to concede.
- Identify your bottom line – the least you are willing to accept.
- Determine what your alternatives are if you can’t reach an agreement.
The better you listen, the more you learn. What you learn can be used to your advantage during the negotiation process. Active listening also makes the other person feel like they’re being heard. People who feel like they’re being heard are often more open to compromise.
To sharpen your active listening skills:
- Pay attention to both verbal and nonverbal cues. E.g., body language, tone of voice.
- Keep an open mind and try to understand the other person’s point of view.
- Provide feedback to show that you are listening and understanding what is being said.
- Resist the urge to interrupt or dominate the conversation.
Emotions can run riot during a negotiation. Tensions are high, and there’s a lot at stake. As an entrepreneur, it’s essential to be able to read people and understand what they’re feeling. Emotional intelligence will allow you to manage the emotions in the room, diffuse tense situations, and find common ground.
To build your emotional intelligence:
- Be aware of your own emotions and how they affect your behavior.
- Empathize with the other person and try to see things from their perspective
- Be aware of the other person’s emotions and how they might be affecting their behavior.
- Separate the person from the problem.
Communicating effectively can help you state your case clearly and explain your position. It can also help you build rapport, find common ground, and resolve conflicts.
Entrepreneurs often need to negotiate repeatedly with the same people. Being intentional about what you say and how you say it helps keep the lines of communication open.
To improve your communication skills:
- Be clear and concise when stating your position.
- Make eye contact and use open, friendly body language.
- Be patient and allow the other person to speak without interruption.
- Pause before you speak to organize your thoughts.
Be flexible in your offers and be open to compromise. If you’re inflexible, the other person is likely to dig in their heels. This could lead to a stalemate and a wasted opportunity. Being flexible doesn’t mean giving in to every demand. It’s about being open to different ways of achieving your goals.
For example, let’s say you’re negotiating the price of a product. You could be open to different payment terms or packaging options. Or, if you’re working on contract terms, you could agree to different deadlines or deliverables.
A study by Columbia University found a strong link between flexibility and success. Negotiators who achieved the best outcomes were also the most likely to change their positions.
Negotiation skills can help you close deals that keep your startup running smoothly. So, practice them often so you can confidently negotiate from a position of strength.