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5 Tips for Handling Business Negotiations

5 Tips for Handling Business Negotiations

by MBO Partners

One of the most essential skills for any solopreneur to have is the ability to negotiate business deals. The way in which independent contractors negotiate can make or break their business. If handled correctly, negotiations can solidify relationships with clients, strengthen connections with vendors, and help you to grow your business. Here are the 5 steps to successfully handling any business negotiation.  

1. Do your research. Before a solopreneur enters into negotiations, it’s vital to prepare. First of all, find out as much as you can about the company or client on the other side of the negotiation. Not only the basics regarding what they do, but also important details like their current financial situation, their past performance, and even current trends in their industry, and how they’re responding. The more you know about their position, the stronger your case will be.

Secondly, make sure to do the research when it comes to your own offer, as well. Study the market and do the math, so that you can provide the other side with hard facts and stats to describe just how much your services will help them to grow.

2. Have a strategy in place – but be flexible. Independent contractors need to walk into a negotiation with a plan already in place…but it’s just as important to remain flexible during discussions. You need to know your main objective and top goals, and keep them firmly in mind as you negotiate. But at the same time, it’s vital to be aware of what you’re willing to give up in order to make a deal.

3. Go for a win-win outcome. Negotiations are often thought of as win-lose situations, in which one side gets what they want, while the other eventually caves to their demands. But the ideal outcome of any negotiation is actually one in which both sides emerge happy, satisfied that they’ve reached a compromise beneficial to each. Independent contractors should listen carefully to the other side’s requests, and try to accommodate them as much as possible, without compromising their own needs.

4. Take time to think carefully. Behavioral-decision research done by Harvard Law School demonstrates that our instinctual responses in negotiation situations can sometimes be less than ideal. Trusting your gut and making a quick decision based on emotions can lead to an agreement that’s regretted soon afterwards. Instead, take some time to deliberate carefully before deciding, even in the midst of a fast-paced negotiation. Even a minute or two of thought can help, if spent wisely.   

5. Know your limits. Solopreneurs shouldn’t be afraid to walk if the negotiation doesn’t seem to be moving in a favorable direction. It’s a common misconception that ending a negotiation without a deal closes the door on any future deals, as well – but nothing could be further from the truth. On the contrary, accepting a deal that isn’t beneficial to your independent consultancy will do more harm than walking away would, and ending negotiations on a friendly note, even if an agreement is not reached, leaves the door wide open for negotiations more favorable to your position in the future.

If independent contractors take these 5 tips into consideration before and during business negotiations, they will go into any negotiation situation well-prepared to make a deal that is beneficial to both sides.      

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Comments

This sounds pretty cool though. I think I'll apply your tips. Hopefully it works.

Negotiation is the most important part for business. This all started with negotiating people to work with you, investments, transactions, anything that has to do with your services. There are lots of entrepreneur success stories from following these steps and looking forward for more successful individuals soon.

The negotiations are going to be good. They should be doing a pretty job with it. - Aldo Disorbo

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