5 Fundamental Rules of Negotiation for Small Business Owners

Small business owners who do not have good negotiation skills risk losing big (or at least not earn what they deserve). Many business owners find negotiation very stressful and try to avoid it as much as possible. They think of negotiation as a long, drawn-out process where one party wins at the expense of other, and when it’s over the “loser” hates the winner for not giving enough. It doesn’t have to be this way. Professional negotiators tell us negotiation is a skill where it is possible for both parties to come out winners and still be “friends” at the end.
To clear the misconceptions about negotiation we have come up with 5 fundamental rules that you should keep in mind. Once you accept these rules and arm yourself with the tactics to use them effectively you can not only “win” the negotiation, but also feel good about it at the end, and make the other party feel the same. Here they are:

1. Everything is negotiable. Many people think of negotiation process as coming up with a final price of something. This is a very limited view. There are many other aspects of that something you can. And should, negotiate on. While price is certainly the biggest factor, you can focus on exchanging warranty, quantity, payment terms and other ancillary items. The more options you have at disposal the better success you will have in coming to an amicable agreement.
2. There always exists a win-win solution in negotiation. Ok, maybe there are some extreme cases where the parties just cannot come to an agreement. But those are very few and far-between. In most other cases if you go into negotiation with open mind and variety of options, you will find an agreement that satisfies both parties. The key is to think of negotiation as win-win rather than win-lose process.
3. Honesty and fairness wins at the end. You don’t have to be mean and manipulative to win at negotiation. Humans will reciprocate to other humans in the same way they are treated. Honesty breeds honesty. Once in a while, people will give in and let the manipulation win, but you need to remember that burning the bridges is never a good idea. You never know when you may need to come back to the other person you have manipulated. When that situation arises he / she is going to remember the past experience. Now, being honest and fair doesn’t mean you have to open up all your cards on the negotiating table. You can be honest and fair without telling everything.
4. Keeping communication lines open is crucial to reach an agreement. Just like marriage, if the negotiating parties are not talking they don’t know what each other is looking for. Negotiation is a give-and-take process and for it to work both parties have to let the other know what they want. Novice negotiators get frustrated easily during negotiation process and throw down the gauntlet. Many of those impasses can be overcome by taking a brief timeout and resuming with a different viewpoint in conversation.
5. Preparation is key to success. The person with the best preparation is always the one who gets what he is after in the negotiation. Preparation involves learning the facts about the situation, finding the needs and wants of the other party and gathering data. Information is power!

What is your experience with negotiation?