Unless investors suddenly start tossing handfuls of start-up capital out of limousine windows like confetti, most entrepreneurs will have a fairly small pool of cash with which to work in the early days of a business. Unlike a family on a budget, business owners cannot clip coupons from the paper to spread the budget out a little further. However, business owners do have one distinct advantage that cash-strapped families do not get — negotiations.
Haggling over the price of spaghetti at the check-out line is silly and mostly pointless. The cashier has no control over the prices and, even if he or she did, there is little point in shaving an extra nickel or dime off of a single package of dry noodles. Business, on the other hand, can thrive on negotiating. Here is what you need to know:
Having a plan before heading into negotiations over product prices or contracts is not only advisable, it is necessary. However, that is not to say that you should not stop and listen to whatever counter options are presented. Drawing a hard line in the sand may not get you and your business anywhere. Remember, you need to be a bit flexible during negotiations, so have an idea of what you are willing to bend or concede before ever sitting down at the table.
Get over your fears
It can be a little overwhelming or even a bit scary to ask for what you want during negotiations. Of course this is understandable, since no one really likes confrontation, but stop and ask yourself what is the very worst thing that could happen? The worst reaction is likely that the other party will say, “No,” and you will continue on with negotiations. Stand up for your business and its needs and never be afraid to put forward your requests.
Slow it down
Instantaneous gratification is hard to turn down, but fast agreements are hardly a hallmark of beneficial negotiations. Being in a rush makes it all too easy to agree to terms or conditions with which you might not otherwise be too happy. Slow it down, and remember that negotiations are a practice in patience.
Know when to walk away
Ever heard your mother say, “There are some people you just can’t reason with”? Not every negotiation will produce positive or beneficial agreements, and that is just part of business. Know that you can end the process and walk away when necessary, especially if your business is at stake.
Purchasing goods or services at a reduced price is an excellent way to reduce costs, not just in the early days of a business but also throughout its lifetime. Negotiating skills are necessary for virtually all business owners, and honing them as early as possible is a key step to ensuring success.