Every business person needs to be able to negotiate with customers, suppliers and even with your team members, for example, when trying to agree on a common point. You need excellent business negotiation skills to win business deals, business deals are better that retail selling if you want to make more profit
A successful negotiation leads to an outcome that satisfies the genuine needs of each party.
The same principle applies when negotiating a price with suppliers and customers. Your job as a manager is to negotiate as low a price from the supplier and as high a price to the customer as you can, thus maximizing the value won for your company.
- If you drive the price from your supplier so low that they go out of business, you will lose your good partner with the supplier.
- If you demand an unreasonably high price from a customer who you know is you may make a great profit once, but lose this customer in future because they resent your taking advantage of their temporary weakness.
The skill of Business Negotiation
Negotiation differs in some respects from other relationships.
- You cannot be sure that the person you are negotiating with can be trusted, so you need to be quite guarded and protect your interests.
- Experienced negotiators recommend that you detach yourself from your feelings as much as possible and focus entirely on the terms.
Preparation for good Business Negotiation
- Well-prepared negotiators have a huge advantage.
- Know your own position very clearly, and get to know the other party’s interests as well as you can.
- Work out in advance the minimum you can live with and the maximum you can (or should) get away with.
2. Work out your best alternative to a negotiated agreement .
- This represents what you would do if you did not reach agreement.
- For example, if your supplier cannot match the price you are prepared to pay, what is your alternative? Do you have other suppliers you can turn to? Can you do without the product or service?
The Business Negotiation
- Meet somewhere that does not put you at a disadvantage.
- Adopt a professional, neutral tone that sends the message that you intend to be fair.
- Opening positions can have a very significant effect on the outcome. Therefore in complex negotiations it is recommended that the parties avoid stating opening positions and instead discuss their interests. This can lead to creative solutions that neither thought of before.
- Listen very closely to the other side. This will ensure that you can offer solutions that meet their actual needs, not what you think they need, and may give you clues about how to convince them to accommodate your needs.
- Ask lots of questions- this moves the conversation on into solving real problems.
- Refuse to be manipulated by emotions on the other side – whether anger or pleading. Keep returning to the objective matter of the negotiation.
- When agreement begins to emerge, even if it is about only part of the matter, draw attention to it, make sure everyone does agree, and write it down to make sure it is clear and recorded. After which don’t go back to it.