By Chelsey Lewis
Although business negotiations are an essential part of modern commerce, you may feel that you’re not very good at them. You may leave a meeting with a potential client feeling like you’ve just missed out on a lot of money or that you didn’t receive everything you wanted, or you may think you could have easily got a better deal with improved negotiation skills.
But how do you make fair business deals? Here are some proven techniques that could give you the edge you need:
1. Research before business negotiations.
You should research the going market rate before you begin negotiating. Don’t simply assume that something is a good bargain because you’re told it is, or that you’re being overcharged because your gut tells you so. You should also work out what profit margins you wish to make and what prices you will have to aim for to meet this goal. It is always best to enter a business negotiation with a good idea of the price range you are willing to accept.
However, you should not use the word ‘between’. If you say, “I am willing to do this for between £15 and £20 an hour,” the other party will be bound to focus on the £15 and could even pressure you into lowering this price. Some people suggest that you should never be the first person to offer a rate – waiting for the other party to offer a price forces them into showing their hand and informing you how much they are willing to spend.
2. Bring a calculator.
In the pressure of a business deal, people’s mathematical abilities can fall by the wayside. You may find that you are unable to do simple mental arithmetic while juggling other factors around in your head. A calculator lets you take a breather and consider the price accurately. It also means the other party can understand how you came to a particular price, so they will be more likely to view you as being upfront and honest.
3. Aim for fairness.
Receiving a good deal does not have to mean that the other party has to receive a bad deal. You should always assume that there is a mutually-beneficial deal that just needs to be uncovered. Don’t feel pressured to wrap up the meeting if you’re not completely happy with the final terms.
If you cannot come to an agreement on price, consider what other things you could offer to the party. Your company may be able to help the other side’s marketing strategy, or could offer discounted services or a cheap consultancy to it. Offer additional services at cheaper rates if you believe it could keep both parties happy.
Conversely, you should never try to rip the other party off. Adding financial pressures on another business or freelancer will ensure you do not receive the high-quality service you need, and could see the other party pulling out of the agreement when they start to encounter financial difficulties.
4. Stay relaxed throughout corporate negotiations.
Don’t allow yourself to be pressured into closing a deal. If you are representing a larger company, you could pretend that a key shareholder or the CEO has to agree to the terms of a deal before it can go ahead, as this will prevent you from being pressured or cornered into agreeing to terms. Implying that you have to discuss the terms with another party gives you some much-needed breathing space before you finalise the deal.
If you are a freelancer, you may find it impossible to imply that you have to talk to another party before you can go ahead. You must remember to stay calm and not allow yourself to be flustered by stalling tactics or particularly low offers. If you are desperate for the work, you should not let the other party know this.
5. Know when to walk away.
Knowing your bottom line means you can walk away if it becomes apparent that it will not be met. Obviously, you never want to walk away from a business negotiation, but you will have the confidence to articulate your final offer and the body language that says that you will not be pressured into lowering it. If you remain steadfast in your final offer, the other party will recognise that and you will be likely to come to a mutually-beneficial arrangement.
When you have concluded a deal, you should be willing to provide the best possible service for your new client or should do all you can to keep them happy. Business negotiations are the best way to find new clients and build up new corporate relationships. Keep the other party happy and you may find further business opportunities present themselves in the future.
Chelsey Lewis works as a writer and researcher for Clearwater Solicitors. She has been writing about legal matters related to business deals and compensation claims for road traffic accidents, and always tries to educate people about their legal rights either on business or in claiming serious injury compensations.