How to Negotiate a Business Deal – Part 1

In today’s fast-paced world, negotiating a business deal can be quick and informal – especially if you are a small business.  That said, there are some hard and fast rules to apply whenever negotiating to ensure the details of a contract/sale/deal are documented and both sides feel they received something of value. Today, we share some expert advice on how to negotiate a business deal.

Keep your list down:  

Small businesses need to weed out the “tire kickers,” according to Smallbiztrends.  This means focus on the true leads, and leave those who hesitate by the roadside.  These “tire kickers” may seem “slightly” interested but they will keep you busy, asking to see or try more of your product or service.  If they keep coming back, it is advisable to get them to do something that takes a bit of effort, such as setting up a face-to-face meeting, or filling out a short questionnaire.   A task will be too much for them most likely, and your tire kickers should melt away.

Nice to have vs. Need to Have:

What do your business need and can it live without?  In a negotiation, you may be willing to give up something (e.g.: dropping the price or adding the extra widget).  Figure out ahead of time what you are willing to give up, but what you absolutely need. In addition, these needs may have legal ramifications so it is recommended to be on the same page with your lawyer on any aspects that have to be part of the deal – even if your customer is saying or asking for otherwise.

Research, Research, Research:

It is said that “information is power.” Make sure you know your potential client before the negotiation.  “Be aware of prevailing market conditions,” says Smallbiztrends.  “Understand the industry, pricing, competition and much more.”

Smile: Put on a Happy Face:

A positive person filled with good information will go far in a negotiation.  Smallbiztrends says “Your reputation and ability to work with a customer, vendor or other party usually depends on having a decent working relationship after the negotiation concludes.”   As such, a positive attitude at every point of the negotiation process will go far.  Finding common ground during  the initial conversations helps (whether it be family, hobbies, etc.) and will help ease both of the parties into a pleasant negotiating environment. If meeting face to face and smile, look the customer in the eye.  Most importantly, developing a rapport with the client will help to ensure a good working relationship and can pay off down the line.

In our next blog post, we will share four more ways to negotiate a business deal with actionable strategies a small business owner cannot afford to miss!