6 Valuable Negotiating Tips from a NY Entrepreneur & Lawyer: Attitude and Preparation
Every one of us negotiates our way through life. Whether bartering a later bedtime with our kids in exchange for a clean room, trying to charm our way into a lower price for the lawn guy’s fall cleanup, or going mano y mano with that greedy supplier at work, everyday we do the negotiation dance. It is an innate skill that develops naturally over time so the rest of this discussion will seem to be intuitive and common sense. However, is common sense your common practice?
In my experience, across all endeavors including negotiation, the key factors in a successful outcome are preparation and attitude. Preparation is dependent on first defining your goals.
In business, negotiating is the tool you use to establish your business relationships and define the framework under which they will be governed. Accordingly, taking the time to understand what your goals are for the relationship is the most important element that informs how you apply your tools and proceed with your negotiation.
Equally important, your attitude and personality directly affect your likability. In my experience people will be more accommodating in a negotiation when you are respectful, trustworthy, transparent and likable, than when you create an impression of being an intractable bully. As they say, you get more bees with honey than vinegar.
ATTITUDE: YOUR NEGOTIATING PERSONALITY
- STRIVING FOR A WIN-WIN OUTCOME
Many lawyers and people in general enter into a negotiation with an adversarial mindset. They see negotiation as a contest and are looking to beat the hell out of the competition. Try and get past that instinctual mindset.
A better way to approach a negotiation is to understand your counterpart’s positions and move toward an agreement that provides each party with what they need, while limiting risks and potential problems in the future. When entering into a deal you are agreeing to work together toward common goals. To beat each other up, create resentment, stoke suspicions and foster an adversarial relationship is counterintuitive. Don’t get caught up in the trap of letting an overzealous advocate damage the good will that lead to the negotiation in the first place.
- SETTING THE ENDZONES
Business leaders want to get deals done. They don’t want rounds and rounds of endless negotiation and getting bogged down in minutia. They want to shake hands and get down to business.
Accordingly, when it is your side’s role to provide the initial draft of the Agreement, the closer you are to finding a fair middle ground from the start, the quicker you can get down to business. I’ve seen way too many instances where a first draft was only protecting the side of the party presenting the contract; bad move. You’re creating bad will and inviting hours of time and expense just to start approaching a reasonable outcome. Starting close to the middle ground moves the process along faster and results in better compliance on the back end.
- UNDERSTANDING AND COMMUNICATING YOUR LEVERAGE
Who needs the deal more? Create the impression that the deal is not that important to you and you have immediately increased your leverage. What is the power dynamic between you and the other party? Does might make right? Typically not in a win-win situation.
For most deals to work, each party needs to have some skin in the game. Otherwise it’s too easy for the party who has put nothing at stake to simply walk away.
- PRIORITIZING YOUR DEAL POINTS
It is crucial to identify how you feel about the importance of the different negotiating points in the agreement. What is your best-case scenario? What is the most you are willing to give up to make a deal happen? How have you ranked different deal points from least important to most important? Knowing the answers to these questions in advance will give you the confidence to push for more or walk away without second guessing yourself.
- ANTICIPATING THE PRIORITY OF THE OTHER PARTY’S DEAL POINTS
An effective negotiator anticipates how the other party may feel about the respective deal points. It is with this preparation that you will determine where you are able to give in exchange for where you are able to get. Using your skill to give things that are of lesser importance to you in exchange for concessions on things that are of greater importance is the essence of effective negotiation.
- KNOW YOUR RESPONSES TO OBJECTIONS IN ADVANCE
In most cases you will know exactly where the other party is going to push back. Being prepared with well thought out responses to objections can allow you to take the objections and turn them to your advantage. If they object to a point that is not that important to you, show some pain and be prepared to offer up a minor concession in exchange for a meaningful concession on their part.
Most deals will boil down to only a handful of deal points. Know what’s important for both sides and you have the tools to give a little and get a lot.
We negotiate everyday. There are countless opportunities to practice your skills. As long as you are dealing with someone who has the power to make decisions you’d be surprised how often you can get a better deal.
Next time you check in at a hotel, are renting a car or spending a lot of money in a store have some fun and practice your negotiating. A bigger room, more luxurious car or extra discounts sometimes are as easy as a big smile, friendly words and simply asking. Give it a try and build your confidence for the next big deal.