How to Negotiate

The beginner's guide to saving money, gaining confidence and getting great deals

Chloe Askwith

• Publisher: Harriman House
• Year: 2012
• ISBN:
  9781908003416
• Topic: Commerce
• Subtopic: Industrie automobile

This is a practical and insightful book to give new business owners the tools to save money and become confident negotiators. Find out exactly what you want from each deal and the go out to get this in a considered, considerate way that protects and grows long term business relationships.Negotiation is an essential skill for business owners, one which is sometimes overlooked. The benefits of being able to negotiate well are significant and extend beyond business life. Besides being able to save money, you will be able to improve other aspects of your deals which may include payments, delivery, volumes, quality, you may get other benefits such as marketing support and you should gain some extra friends! Knowing exactly what you need to achieve and making a plan of how to go about it will certainly improve your confidence when dealing with suppliers, and will give you and your company a professional edge.This book takes you through all the steps necessary for good negotiation. Starting with some golden rules which ensure that you don't rush into a deal or make mistakes, we will to make sure you understand what you are wanting to achieve and then ensuring that you understand the needs of your supplier or customer to get to a 'win-win' situation. The book highlights the importance of building long term relationships and it gives tips on meetings, what to wear, language to use and body language to be aware of.You will learn:- How to carry out research into your market- How to find many ways to save money- To understand how to structure deals that will benefit you- To communicate clearly with your suppliers and customers- What to expect at business meetings- How to keep discussing a deal until it is right for you (and your supplier)- The importance of relationships- How to feel confident even in difficult situations- Negotiating skills you learn never fail to stand you in good stead when you are in discussions at home or work.

1. What is Negotiation?

WHAT DOES THE word negotiation conjure up for you?

It makes me think of Denzel Washington in a darkened smoky room, of tense hostage situations – or lengthy peace talks. It also comes across as a word that definitely belongs in large, unfriendly boardrooms.

I have been working in the world of negotiation for many years, and have come to understand that it is really a way of communicating where there are some set rules. And instead of being something reserved for specialists, it is a skill that can be learned, and is relevant and useful to all of us. If you have a small business, or are considering starting one, there is a huge value in learning how to negotiate properly.

Negotiating between two people is finding an agreement that both are happy with. This is not just about setting a price. It is more than that. It is putting in time and effort to make sure that you and the person or company you are dealing with would be more than happy to come back and do it all again. As so many books and courses put it, you are looking for a ‘win-win’ situation.

By working through this book you will be finding solutions to make people happy. Some negotiators are naturally good at doing this as they can think widely and find creative ways to problem solve. Others can work through some basic steps to get to the right agreement. It is a way of thinking and working that you can very easily pick up.

In this book I am going to show you:

• how you can benefit from negotiating
• the preparation you need to do before you start discussions
• how to get started, with a step by step guide to how to get a good deal
• what to expect when negotiating
• how to continue by maintaining strong relationships with your clients
• tips on language to use, what to wear and what to do in meetings.

2. How Will You Benefit?

IF YOU ARE going to be successful at getting your own way (that’s essentially where we are going here), you need to be clear about what you can get out of the whole process. It’s essential for both motivating and directing your efforts.

Save money

There are many ways to get yourself the right deal. It all depends what your needs are and finding out what is important to your supplier. By helping them you could, firstly, save yourself money.

Spending some time building a good relationship with your supplier is one key to this. Talk to them and find out when they need to complete their sales for the year. Do they have targets to hit? If you help them to get to the right number will they give you a good deal? Making a large order to get a volume discount is a classic variant of this.

You could also save yourself money by getting a supplier’s agreement to spread your payments, thus helping your cash flow and avoiding an overdraft.

Lastly, you could save by setting prices with your supplier for the next deal, when prices would otherwise rise.

Feel confident

Knowing how to negotiate also means a confidence boost. If you are well-prepared and have a set of rules to follow in striking deals, you will feel much more assured when you go into a meeting – even in a large boardroom on your own . . .

When you have achieved your goals, and both you and your clients are happy – that is a really good feeling! Closing a good deal, whether buying or selling, where everyone is happy makes life more pleasant. It feels good to do a good job.

Make friends

Effective negotiation means building, not burning, bridges. A definition of a good deal is when no one leaves the negotiations either feeling ripped-off or regretful in any way. Both parties need to feel like they could go through it again.

Building relationships with people gives you and your business security. You may even find more business by getting to know your customers and suppliers better. And by building on your relationships with suppliers you will get to know more about all aspects of your business and the chains that feed into it: this could help you run things more efficiently or spot the next big opportunity in your niche.

QUICK TIP: Make sure you send Christmas cards (or e-cards) to as many people in your supplier’s company as possible, including receptionists.

Gain respect

Learning to negotiate effectively is an opportunity to put some structure into your dealings if you have employees, or establish some steps for you to follow each time if you are a sole trader.

Here are some examples:

• decide how you will communicate (by phone, email or in person)
• draw up forms for your proposals and deal memos
• mark opportunities to send thank-you cards and gifts
• decide whether to be formal or relaxed in the way you communicate.

You can also define a company image – not in the design sense, but in the way you want to come across, and in your style and manner of dealing with other people.

3. Just Before We Get Going . . .

Some Golden Rules

AT THE CORE of negotiation is learning how to communicate well and find out what the other person wants to get out of the deal. If they are not familiar with negotiation they may not realise that it is always possible to work together to find a deal that everyone is happy with. (It just takes a lot of tact and perseverance sometimes!)

1. Listen

You need to be a good listener. Give the other person time to talk and don’t be scared of leaving gaps in the conversation. Sometimes people fill the gaps with conversation and give things away about themselves or their company that are useful to know.

The aim of listening well is to find out what is important for the other person. For example, you need to know if it would benefit them to have a payment in the following tax year, or if they do or don’t have cash flow problems. If you can find out how easily they deliver, if they pay other people for delivery or deliver themselves – all these types of things add to your knowledge base, and allow you to propose terms that make things more tempting for them.

2. Communicate clearly

It is important to remember what you have said during your conversations, to keep a note of this and not to change your mind at a later stage. Always be sure that you are comfortable with what you are offering. Repeating it is fine. But you can’t keep changing your mind.

When you are communicating there are some particular words that are helpful to use (and avoid) which I will cover later in the book.

3. Ask questions

Do ask questions! You will have realised by now that it is very beneficial to find out as much as possible about the company and people you are dealing with.

It is useful to couch some financial questions around easier, friendlier ones first. Always write down what you would like to find out before you pick up the phone, or make a visit.

For example, if you would like to find out if a company is relatively stable:

• start off by telling them a bit about your circumstances, in a friendly way; try to engage the person on the phone
• ask them what their company is like, how long they have been around
• ask them if they have been working there for a long time
• ask them where they are based
• ask whether you can go and see them.

Share some information about yourself as you go along. When you are further into discussions, ask why they have offered you a certain price, or why they are not interested in giving a discount if you take some of the delivery later in the year (for example). You can learn so much and get some ideas of your own.

Building a long-term relationship with your client or supplier is really important, so be friendly with your questions. If possible, go and see them and have a chat over coffee. Share your own experiences with them.

4. Become a negotiator

Never say yes to something straight away. There are a couple of reasons for this. The first one is that it’s always useful to go away and think about an offer. You may have forgotten something. The second reason is that both of you want to feel that you have got a good deal – if you bite someone’s arm off at their offer they will immediately suspect that they should have charged more.

Never give something away for nothing. In ot...