Negotiation Skills, Part 1 of 2

Negotiation, Part One

Cooperation is the heart of business. Without it, nothing of significance could be achieved. And keep in mind that cooperation is not limited to partnerships between companies or teamwork within organizations. Any mutually beneficial action between parties qualifies as cooperation. This includes the purchase of any goods or services from suppliers and the sale of goods or services to customers.

But no one cooperates simply for the sake of cooperating. We cooperate because it is in our best interests. However, oftentimes one party’s interests and the other’s do not align perfectly; after all, it’s best for the purchasing party to secure a low price, and best for the seller to unload his merchandise at as high a price as possible. It is in these extremely common cases when negotiation enters the picture. Negotiation is the process of maximizing your gains in instances of cooperation, and it is an absolutely essential skill for any successful businessman. In this and my following article, we’ll take a look at some tips and tricks which will help you in all future negotiations.

The first, most important aspect of any negotiation is information. The side which has the most information and which is best able to utilize that information will almost certainly fare better in any negotiation. In addition to being extremely familiar with the product or service in question, you also need to know as much as possible about the other party: what do they want, how badly do they want it, how far will they go to get it. Accurately gauging all of this information will allow you to adapt your negotiation strategies appropriately.

However, there is another, equally important aspect to information and negotiation, and that is self-knowledge. As useful as it is to have extensive knowledge of the other party, it is even more useful that you have complete, objective knowledge of yourself or your organization. How much are you willing to give for the product or service in question? At what point are you willing to walk away from the negotiations? It is crucial that you know the answers to these questions prior to beginning negotiations, as your position will be significantly weaker if you find yourself off-balance and scrambling. By objectively analyzing yourself, you can enter negotiations with a solid game plan—a major advantage in any negotiation.

As is a willingness to walk away. This is an oftentimes overlooked yet incredibly important tool in any negotiator’s repertoire. If you go into a negotiation completely, 100% intent on reaching an agreement no matter what, then the other party will quite possibly sense this and react by imposing unreasonable demands. If you’ve preemptively determined that you must reach an agreement, then you will accept these conditions despite their unfairness, and that is a guaranteed recipe for an unsuccessful negotiation. In order to achieve a reasonable, favorable outcome, you must enter any negotiation prepared to walk away if the other party refuses to be reasonable.

And then you must actually do so if you reach an impasse. Sometimes, this will show the other party that you are not as much of a pushover as they might have expected, and they will return with a more reasonable offer. Alternatively, this may be the end of the negotiation, and mean that you must find another party to do business with.

For more negotiation advice, be sure to check out my next article, Negotiation, Part Two.