Basics of Negotiating Your First Deal
The ability to effectively negotiate to get what you want is useful in many aspects of life, from bargaining with a street vendor to pay a fair price for merchandise to closing a lucrative deal. For business people, the art of negotiating is a skill that must be refined in order to ensure that they get everything that they want or need from a contract, financing or a meeting. Learning some basic bargaining skills can take a person far in the business world.
Tips to Successfully Negotiating a Deal
The following tips can help a person prepare for successfully closing any deal.
1. Research: The first step to conquering the fear of negotiating is just doing some prep work. The better educated a person is before they enter the bargaining process, the more likely he’ll be able to successfully navigate the different phases. Never walk into a meeting without thoroughly researching the company and its major players ahead of time. Look at company profiles on sites like Hoovers, read through the website and marketing materials, look at quarterly and annual reports, etc. This information will also provide insight as to how much the company might be willing – or able – to invest.
2. Planning: Before walking into any negotiation, know exactly what you want from the arrangement, both the highest and lowest numbers. Also, have a “deal breaker” number. If the company comes back with this low figure, it might be time to walk away.
3. Exchange of Information: Information should be exchanged on both sides, including company standards, rules and procedures.
4. Bargaining: Negotiators should be ready to state their demands and then be prepared to bargain for them. Sometimes, just the request will be enough to get everything you initially demand. Usually, however, success involves concessions - on both sides. Concessions can be a variety of items, i.e. free banner ads on a website or even an additional service for free. These adjustments to your initial plan are to be expected, just be sure not to stray too far from your original intent. Never be afraid of thinking outside the box to get the contract, including coming up with creative new ways of getting what’s wanted.
5. Closing the Deal: Once the details have been hashed out, the parties should agree on the overall agreement and its outcomes. Each side should get something that they want.
6. Get it In Writing: Never let a deal stand on verbal agreements. Follow up in writing with the agreed upon points and terms that were discussed. If necessary, have each party sign the agreement so no one can say that they didn’t understand what was discussed or the outcomes.
Negotiating is required for every type of business. While it may take some practice to get good at negotiating, knowing these tips will help with the bargaining process.