Many entrepreneurs don’t have sound negotiation skills, and surprisingly, they don’t even think they’re that necessary. Of course, they’ve never been more wrong. How can you run a business and expect huge profits if you can’t close deals with suppliers, investors and vendors? Business owners should be prepared to face all sorts of challenging situations, and if something happens you can’t always have your manager call the shots and fix the problem. That’s not a sensible way of running and company. Here are some vital tips for entrepreneurs who want to thrive and take their businesses to new heights.
Negotiating with employees is vital for business
New startups depend on employees, and since you can’t afford to pay them a lot of money, negotiating alternative incentives becomes a vital aspect. Companies, who are not interested in retaining employees, don’t have a shot at thriving. It’s important to be respectful with your people; listen to their needs and showcase asympathetic attitude. If you can’t raise their salaries, negotiate better terms. Offer them better working conditions, more vacation time, and so on. Put yourself in their shoes and relate to their needs and wants. This will bring a lot of value to your startup.
Negotiating with investors
As an enthusiastic entrepreneur with a dying wish to make his business succeed, negotiating with investors is crucial. Some will try to deceive you, while others will pleasantly surprise you. It’s best to be prepared for anything. Don’t allow them to intimidate you; they may have more experience than you, but this doesn’t mean they can take advantage of your naïveté. Some key aspects to have in mind:
- A deal should be satisfactory in proportion of at least 50% – never agree to a deal that can’t benefit your company
- Have a good lawyer present to deal with all the paperwork and offer advice
- Don’t over-negotiate – it’s really not a good idea to try too hard because you risk losing
- Pay close attention to body language – don’t let opponents observe your nervousness; look them straight in the eye
Practice, practice, practice
Most starting entrepreneurs don’t like to take risks. They’re constantly on the safe side – this means they’ll never move forward and in the end, the competition will eat them alive. Can you afford to take that risk? They say practice makes perfect, so don’t be afraid to make important decisions. Even if you make mistakes, they will serve you as an important lesson and will help you hone your skills.
A “No” can save your business
It’s never a good idea to walk away from a negotiation. However, you can’t agree to a bad deal either. If an investor comes with an offer that doesn’t bring you any benefit, saying “no” may save your company from disaster. Even if you’re walking away, be sure to keep your cool. Maintain a professional attitude and leave room for further discussions – “I’m sorry to say that your proposition can’t benefit our business, so we’re forced to decline; however, here’s our number. Feel free to give us a call anytime.” This sort of behavior is not just polite; it is meant to let an opponent know that you are willing to bargain, if some day they can offer a new deal.
The importance of compromise
Making concessions is a key aspect of business negotiations, especially for starting entrepreneurs. When you’re new to a market,you must use all the help that you can get to attain recognition. Win-win solutions help start ups build connections and foster relationships; that’s what entrepreneurs need to make themselves noticed. Compromise is good, as long as you’re not giving up too much. While it’s certainly a good idea to make “business friends”, this doesn’t mean accepting poor bargains.
Entrepreneurs should master the art of negotiations. They can do that by practicing, but they can also choose to attend negotiation workshops, seminars, and trainings. Listen to the experts, assess their style and learn from their mistakes. Never let counterparts intimidate you and try not to let your emotions get the best of you, no matter what. Whatever you do, always think in the best interest of your staff and company.