How To Negotiate More Profitable Deals
By Joe Love
Almost everything that happens in a business involves some type of negotiation. You negotiate with the people you buy from and the people you sell to. You negotiate with your suppliers to give you better prices, terms, and more variety of inventory for your customers.
You negotiate when you want your suppliers to give you concessions, or come up with new products, or give you first choice of items before they offer them to other businesses. No matter what it is, you are always negotiating something in or for your business.
When you think of negotiation, it doesn’t have to mean gigantic corporate contracts that take months and sometimes years to reach a deal. Negotiation is about how to set up and create successful deals that are the lifeblood of any business.
Most business owners go about negotiating with the wrong mindset. They are only looking out for themselves. When someone starts out with this philosophy it means that they are looking at the other side as an adversary. And more likely than not, at the end of the negotiations both parties feel like they’ve lost.
When you go into a negotiation, your approach should always be to add value. In other words, you should be looking for ways to identify and create more income, revenue, and satisfaction for the person you’re negotiating with.
You should be looking for ways to help the other person in his or her own business even while you’re in the middle of negotiating with that person. If you’re negotiating with someone, you should be anticipating going into business with them. Your success and their success, for some length of time, are tied together. So it is always to your advantage to help the other party come out better off than they were before the negotiations started.
Before you begin a negotiation session make sure you have looked at things for the other side’s point of view. Take the time to see how the other person looks at life. What do they want? Not necessarily from this deal, but what do they need to accomplish and what are their goals?
The effective premise behind this strategy is that you’ll be in a much better position to get what you want out of the deal when the other party recognizes that you see their point of view. Let them know you’ve thought about what they can get from the deal, and always double check to make sure your conclusions about they want are correct.
You should go into every negotiation being sensitive, respectful, empathetic, and focused on how the other side sees things, and how both sides can get a better outcome. Remember, what you’re trying to do is set up a situation where the other side would be almost foolish not to say, “I’ll try it at some level.”
Besides looking at the situation from the other person’s perspective, you should also know in advance what you want. Ask yourself, “What do I really want to get out of this? Why do I want that out of this? What’s the implication of getting what I want?” By answering these questions, you’ll go into the negotiation better prepared. Knowing what you want and why you want it. You’ll know that if you can’t have exactly what you want, then you know what are the other top two, three, or four things that would make you just as happy and the other side as well.
Remember, if you don’t know what you want, then you are at the mercy of the other person. This is the reason why most business owners are not good at negotiating, they don’t know what they want.
For example, many business owners will say, “I want to grow my business.” But, specifically want does that mean? If someone says, “I want to make a million dollars over the next five years.” Does that mean you want to make a million dollars in profits or a million dollars in gross revenue.”
Negotiations are not always about money. They are often about something much deeper, a sense of security, a feeling of stature in the community, richer family life, or more time to do the things they want in life. This is why you should always operate under the assumption that the highest level of expectation and desire that you want for yourself is same as what the other person wants.
When you come to the negotiating table with this vantage point, you open up many doors of possibilities. You speak to the human side of the negotiation, not just the financial side. You help the other person open up his or her mind to new possibilities and many new ways of structuring the deal.
To be successful in the art of negotiation, you need to do three things for a successful outcome.
(1) You need to figure out how the other side sees things.
(2) You need to know exactly what you want to get and what you will or will not settle for.
(3) You must look at intangibles, and find a way to build them into your offer.
When you do these three things in all your negotiations, you will come away with a feeling that you've gotten what you want and have developed a partnership that you will be able to enjoy.
Copyright©2006 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.
Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many of America's largest corporations, on the subjects of leadership, self-esteem, goals, achievement, and success psychology.
Reach Joe at: firstname.lastname@example.org
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