Negotiation skills don’t come naturally to every small-business owner, but with a little effort anyone can acquire them. Robert Mnookin, a Harvard law professor and author of Bargaining with the Devil: When to Negotiate, When to Fight and Beyond Winning: Negotiating to Create Value in Deals and Disputes, offers three basic strategies for successful negotiation.
- Do your homework. Preparation is key, and it helps to have a framework and a checklist in place, Mnookin says. Research your opponents for insight into what their interests, resources, alternatives, and goals might be. Identify your negotiating points on key issues, and then imagine the directions the negotiation may take in each one based on what the other side is likely to want. By considering both (or all) sides before negotiations begin, you may be able to identify points that you can use as trade-offs or for bargaining leverage. For example, if you know that your opponent’s goal is to publicly list your well-respected company as a client, you can stress the benefits of that when you talk price.
- Understand your counterparts. Mnookin says it’s critically important to understand the other parties involved in your negotiations. The best way to do this is to listen carefully and then ask open-ended questions. For instance, don’t just focus on your counterparts’ positions, but on their underlying interests as well. For instance, if you pick up on verbal signs of financial distress during negotiations, it might cause you to make a lower opening bid. According to a study published by Psychological Science, you’ll do better in negotiations if you imagine others’ perspectives rather than trying to empathize with them (which may cause you to put their interests ahead of your own).
- Create and distribute value. In his book Beyond Winning, Mnookin argues that it can be more beneficial for both parties to abandon an all-or-nothing stance and look for ways to collaborate. Creating value involves looking carefully at what each party offers and then using their strengths to reach an agreement. For instance, Mnookin says a landlord who has unused furnishings to store and a cash-strapped renter who needs to store some of his possessions could agree to share storage space and moving services and then adjust the rent downward based on their newfound values.
Help Your Business Thrive
Get our Newsletter
Subscribe to our newsletter