Last Updated on February 21, 2023 by Tabraiz
Running a small business is a task and a half. So much so, that according to the US Bureau of Labor Statistics, half of new businesses don’t make it past the five-year mark. So how do you give your business a fighting chance?
By improving your negotiation skills, you can aim to cut down supplier costs and improve customer sales. These activities can have a major impact on your bottom line and the success of your business. Here are four key techniques you can immediately apply to make yourself a better entrepreneur.
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Master different strategies
According to Negotiation Experts, there’s no single best approach to succeed in negotiations. Each stakeholder requires a different approach and toolkit.
For example, if you’re negotiating with a customer, it pays to lay it all bare. Present the price right from the get-go or early on to anchor your position. Experts say the first figure presented in a negotiation creates an anchor effect, so the final price won’t move far from this anchor. You can also steer the conversation to keep hammering the benefits of your product or services to support your price.
If you’re dealing with suppliers, it’s more fruitful to move away from discussing price points early on. Instead, drive home value points such as your credibility and track record of timely payments to take the focus off the price.
To become an effective entrepreneur, learn different negotiation strategies so you can be comfortable with each one. Also, work on practicing each strategy so you can easily switch between them to apply the best fit for each situation.
What you say isn’t always what the other person hears. Communication breakdowns can get in the way of deal-making.
According to the entrepreneur Maodong Xu, mastering the art of clear communication paves the way for smoother negotiations and quicker contracts.
Maodong Xu was born in the Shandong Province of China in 1967. He is the founder of Dotad, a Beijing-based SMS application company which was acquired by Focus Media in 2006 for $30M. In 2007, he co-founded EGLS, one of China’s leading game developers, and that company was acquired by Dragon Pipe in 2015 for $500M. Maodong Xu is a serial entrepreneur and amassed his billions by founding and selling multiple companies.
Some techniques you can use to beef up your communication skills include:
Starting with small talk
Before diving into a negotiation, consider warming the other side up with small talk. Do some research to uncover more about the other person’s interests to help break the ice. Building rapport from the start can help foster a collaborative environment that will pave the way for fruitful negotiations.
Mind your body language
Pay attention to your body language and demeanor during discussions. Expert negotiators advise maintaining a relaxed, open posture and smile. An air of collaboration can let your genuine intentions shine through helping to foster long-term deals with business partners.
Mirroring the other side
Mirroring helps to improve understanding and brings both sides onto the same page. For instance, if the other person is deadly serious, also show seriousness. Avoid cracking out-of-place jokes and comments.
Also, actively listen and stay engaged. For example, by leaning in when they do the same or nodding your head when they make a point.
Reading between the lines
Pay attention to non-verbal cues such as the tone of voice or facial expressions. Reading between the lines can help you unmask the other side’s intentions. Once you catch on to what they are really after you can find the best way to exchange value that allows you to both get a win.
Keeping a level head and staying in control of your emotions can help you achieve more success as an entrepreneur.
Being emotionally calm helps keep your thoughts clear and sharp throughout most discussions. It also increases the chances of you reaching your negotiation goals. Clouded emotions instead can result in rash and poor decisions.
Some tips to keep negative outbursts at bay include:
- Breathing techniques to still negative emotions before they take root.
- Taking time-outs in the middle of negotiations to compose yourself when you need to.
It also helps to avoid falling into an egotistical trap. If your ego gets the better of you, you can unwittingly throw away the opportunity to close valuable sales deals.
Careful planning is the key to concluding successful deals with stakeholders.
It helps to thoroughly research in advance before you start a negotiation. Find out the other side’s wants, strategies, and possible outcomes.
Then create a game plan once you have rounded up all the relevant information. Map out the expected flow of events during the discussions and all the main issues you’ll be putting on the table.
It also helps to determine in advance the lowest point you’re willing to go to if you have to compromise.
With a well-laid-out plan, it will be easier to stay on track, increasing your chances of success. You can also figure out when to keep pressing and when to hit the brakes to avoid wasting time on less important issues.
Negotiate your way to success
It pays to polish these skills and techniques if you’re looking to level up your negotiation skills and become a better entrepreneur. Armed with the right skills, you can improve your deal-closing rate and take your business further.