How To Negotiate: The Do’s and Don’ts Every Expert Negotiator Should Know
Negotiation is a delicate art form that directly influences some of the most important outcomes in the business world. Consequently, it’s one of the most important skills for any entrepreneur (or almost any kind of businessperson, for that matter) to master.
Negotiation training is just as much learning what you shouldn’t do as it is learning what you should do. While there are some critical negotiation skills you’ll need to practice, there are also some pitfalls you’ll need to carefully avoid.
That’s why in this article, we’re going to take you through 6 of the essential do’s and 6 of the essential don’ts of negotiating. By the time we’ve reached the end of the list, you’ll be well on your way to mastering the art of negotiation.
Anyone can learn to negotiate with a little practice — but you can flatten your learning curve with help from an expert. Find out how Mentorcam can connect you with experienced negotiators to help you learn the ins and outs of making better business deals.
How to Negotiate: What Are the Rules of Negotiation?
Now, let’s take a look at the rules you should actually be practicing in your negotiations:
- Make the first offer
- Speak in concrete numbers
- Ask open-ended questions
- Look for win-win scenarios
- Understand the other side’s goals and motivations
- Remain confident
1. Make the First Offer
Being the one to set the initial terms of the deal typically puts you in a position of power. Making the first offer allows you to seize control of the conversation right off the bat and forces the other party to respond based on your terms.
In general, research supports the idea that the final price is higher when the seller makes the first offer and lower when the buyer makes the first offer. You still need to keep your offer reasonable, but starting high (if you’re selling) or low (if you’re buying) sets the tone for the whole negotiation and allows you to proceed from favorable ground.
2. Speak in Concrete Numbers
Always speak in exact values, not ranges. When you give the other party in the negotiation a range, it almost always works in their favor.
For example, if you’re hoping to sell something for $1,000 and the lowest you’re willing to go is $750, don’t say you’re looking for $750 - $1,000, because now the buyer is going to go straight for your low offer of $750 (even if they were initially willing to pay more).
You may have a range in your head from the start, but don’t give away your lowest offer so easily. Deal in one concrete offer at a time and wait and see what the other party says before making your next offer.
3. Ask Open-Ended Questions
In negotiations, open-ended questions are almost always more valuable than yes or no questions. Yes or no questions are definitive and final — whereas open-ended questions lead to further discussion. Throughout the negotiation, you should be on a constant lookout for any new information or context about the other party or the situation that you can use to your advantage.
When you keep your questions open-ended, it leaves room for the other side to share insights into their position. Open-ended discussions also give you plenty of opportunities to persuade by presenting objections or pointing out potential benefits for the other party.
4. Look for Win-Win Scenarios
The ideal result of every negotiation is for both sides to walk away with satisfying outcomes. Unfortunately, this isn’t always possible, and one or both sides often need to make significant compromises.
However, don’t give up on finding a win-win resolution before you’ve even tried. Instead of focusing solely on your needs, look for opportunities to give the other side some of what they’re looking for. If you can turn the negotiation into a collaborative discussion about how everyone’s needs can be met, you may just achieve the ideal win-win outcome after all.
Best of all, if you can reach a win-win deal, you will likely have cemented an even stronger relationship with the other party, which could pay off in other ways for a long time to come.
5. Understand the Other Side’s Goals and Motivations
Effective negotiating hinges on your understanding of the other side. It’s essential for you to try to put yourself in the other party’s shoes and understand their needs and motivations just as clearly as your own. Ultimately, negotiation is the art of compromise, and you can’t even begin to compromise if you don’t know what the other side wants.
Learning as much as you can about the other party’s objectives ahead of time will ensure you enter the negotiation with a clear picture of how your needs align and where they diverge. You may even find you have goals in common, which can be a great starting point for successful negotiations.
6. Remain Confident
Finally, it’s very important that you exude confidence throughout the negotiation process. It’s perfectly normal to feel nervous or unsure of yourself before an important negotiation — almost everyone deals with bouts of imposter syndrome from time to time. However, keeping your nerves under control and maintaining an outward appearance of confidence will serve you well when negotiating.
There are two reasons why it’s important to remain calm and confident during negotiations. First of all, you are more likely to get the outcome you want if you appear confident. Confident and levelheaded negotiators are naturally more persuasive and more likely to convince the other side of their position.
Second, a confident demeanor establishes trust. One of the best ways to build trust with a new business contact is to demonstrate unwavering confidence in your own positions. People want to do business with people they can trust, and if you don’t seem like you trust yourself, why should anyone else?
What NOT to do When Negotiating
First, let’s take a look at some of the most important things you should never do when negotiating:
- Don’t forget to prepare
- Don’t negotiate against yourself
- Don’t let stress get in your head
- Don’t let your emotions drive the negotiation
- Don’t forget your principles
- Don’t rush the process
1. Don’t Forget to Prepare
One of the cardinal sins in negotiation is entering the room unprepared. If you don’t understand the market, the other party in the negotiation, or your own goals, you have little hope of negotiating successfully.
To prepare, do ample research into the other party’s needs and goals and clearly define your own goals ahead of time. You should also make sure you understand the other party’s history in business and how their industry works (if it’s not the same as yours).
In addition to learning about the other side, preparing for a negotiation involves planning for every possible outcome. If the other party rejects your first offer, you need to know what your reaction will be — you never want to be caught off guard. Plan for various scenarios so you’re ready with a counteroffer no matter which direction the negotiation goes.
2. Don’t Negotiate Against Yourself
After all your diligent preparation, you’ll probably be anticipating a range of possible offers from the other side. That’s good — but don’t make the mistake of negotiating against yourself.
Inexperienced or overeager negotiators sometimes make the mistake of offering the concessions they have planned before the other side has even asked. Don’t undermine your own position; wait for the other party to make their move before you start pivoting.
3. Don’t Let Stress Get in Your Head
Negotiations are stressful because they inherently involve conflict. It’s probably safe to say that only a small number of people truly enjoy the negotiation process.
However, it’s crucial not to let the stress of negotiating get to you. A great deal of your leverage in the negotiation comes from your composure and your body language, so don’t give up that power by letting anxiety affect your demeanor. Try to stay cool and levelheaded even if you’re nervous, and you’ll be a better negotiator for it.
4. Don’t Let Your Emotions Drive the Negotiation
Just as negotiations are naturally stressful, they can also easily get heated. When two parties are struggling to come to an agreement and the frustration in the room is palpable, it’s common for tempers to flare. If this starts to happen, it’s absolutely crucial that everyone takes a break to calm down and then comes back to the conversation in a more constructive manner.
When your emotions are in check, not only are you more capable of acting professionally but you’re also prone to making better business decisions. So, while it's okay for your decisions to be informed by your passions, you should never let your emotions into the driver’s seat.
5. Don’t Forget Your Principles
Every entrepreneur has a set of personal and professional values that guides their ventures to one degree or another. Maybe you started your business because you see a way to address an underserved need, or because you’re a forward-thinking person who wants to make a lasting impact on society.
Whatever the case, don’t throw these guiding values out the window when you enter the negotiation room. Compromising on your principles to get a better deal almost always leads to long-term regrets — not to mention damages your brand image in the eyes of your loyal customers.
6. Don’t Rush the Process
As you may have heard before: negotiating is a marathon, not a sprint. There’s no prize for finishing quickly, and you will only hurt your chances of reaching the best deal possible if you speed through the process.
Don’t try to rush the negotiation to avoid uncomfortable conflict or just to get to a quicker outcome. You’ll strike a much more satisfactory deal on both sides if you take your time to fully understand the stakes and engage in all the nuances of the back-and-forth.
Negotiation is truly an art form, and one that’s not easy to master. Not only do you need to remember the best tips and tricks for negotiating successfully, but you also need to be aware of potential mistakes and how to avoid them.
These 6 do’s and 6 don’ts can serve as the foundation for your negotiation strategy. By keeping these negotiation tactics in mind, you can become a better negotiator and start to achieve the outcomes you’re hoping for in your business deals.
Don’t forget that these tips are general, and you’ll need to apply them to your specific scenario. Every business, and every negotiation, is different. Getting in touch with an experienced negotiation expert is a great way to get help tailor the advice we’ve outlined in this article to your particular needs. An expert can answer all your questions and even help you with negotiation skills training through exercises like mock negotiations.