For many entrepreneurs, the fear of ‘no’ can make the prospect of negotiating an intimidating one. Whether pitching for funding, agreeing supplier contracts, or selling to prospects – there will be many instances where you’ll need to go outside your comfort zone to grow your business. But, what if negotiating didn’t have to be daunting and awkward? What if you could park the cringe and negotiate with confidence, no matter what the circumstances, or stage of your business?
Here are 10 ways you can do just this…
1. Change your perspective
Firstly, let’s address the perception that negotiating is a conversation that begins with a list of demands and works back from there. The ‘what’s in it for me?’ approach isn’t going to work, as all parties involved will be asking this exact question. Aiming for a mutually beneficial outcome will make the exercise much more comfortable.
According to Alexandra Carter – Clinical Professor of Law and Director of the Mediation Clinic at Columbia Law School, as well as author of Ask for More: Ten Questions to Negotiate Anything – negotiation isn’t just about money conversations. It’s any conversation where you’re steering a relationship.
When you think about it, you’re involved in a number of negotiations during your day. Whether it’s deciding on a lunch venue with a client, agreeing what to eat that evening with your partner, or even negotiating a time with your kids to start their homework-! Achieving a desired outcome through dialogue between two or more parties requires skills that you might not realise you already have. It’s simply a case of refining and strengthening them to benefit your business.
So, what does ‘steering’ a relationship mean for entrepreneurs? Carter argues that it’s your opportunity to teach them how to value you, how they think about you. Every conversation you have with someone is an opportunity to steer that conversation for mutual gain over the long term.
And don’t forget, you also need to steer the conversations you have with yourself. Which leads us onto…
2. Ask the right questions
Carter explains that asking the right questions helps you cultivate self-awareness. Research has found that there’s a definitive link between self awareness and effective leadership, including negotiation skill.
According to a study from the Kellogg School of Management at Northwestern University, 93% of us aren’t asking the right questions of other people to get more out of negotiation. According to Carter, you will make the best deals by asking the right questions first.
Mirror Questions
Start with taking time to ask yourself the right questions before sitting down to negotiate (Carter calls, ‘mirror questions’.) By steering your own internal conversation first to clarify your own goals, interests, emotions and solution, you’re arming yourself with your most powerful source in negotiation: knowledge. Your strongest negotiation position to be in is having a rock-solid awareness of yourself and your situation before your negotiation begins.
Examples of mirror questions include:
- What’s the problem I want to solve?
- How have I handled this successfully in the past?
- What strategies did I use? How can I apply them to this scenario?
- If I haven’t experienced this problem in my career in the past, are there life lessons that I’ve successfully negotiated before? Are there strategies I used that I could apply now?
By asking these questions, you avoid going into your negotiation negatively. By thinking of a time you’ve successfully steered an outcome, you’re more likely to enter a negotiation positively and achieve the outcome you want.
Window Questions
The next stage is to ask the other person questions in order to understand their goals, needs and concerns – described by Carter as ‘window questions.’ By better understanding where the other party is coming from, you’ll be able to generate better deals of more value. You’ll also generate relationships that create more longer-term, mutual gain. Carter recommends kicking off negotiations with the two conversation starters below:
- “Tell me…” – Gets people to give as much information as possible. This helps you to figure out the issue, then satisfy the issue to win the deal. Switch your questions to more specific directives e.g. ‘tell me what you’re looking for in a contract’ or ‘tell me what you think about my product’. Open up the conversation to allow them to tell you what they need most.
- “What are your concerns?” – Will uncover the reasons people say ‘no’. For example, they might not have enough information, or have a question about timings. This gives you the best chance of figuring out what the target is that you need to hit. It’s important to know that, a lot of the time, the ‘no’ isn’t about you.
3. Talk less, listen more
As well as asking window questions, make sure you wait for the answers. While asking questions helps you control the narrative, waiting for the answers is just as important. And don’t be afraid of silence while you wait – the insight will be worth it.
Remember that by asking questions and listening carefully to the answers, you are showing that you care. Once the people involved know you care, they will be more open to listening to you.
4. Focus on what you can gain
Are you focusing on what you could gain, rather than what you risk losing? Adam Galinsky, a professor at Columbia University, found that the way you mentally frame a negotiation can impact its outcome. Focusing on the end goal of your negotiation as an opportunity to advance, or achieve something, helps negotiators become more comfortable with the risks beforehand e.g. what could go wrong. The research found that those who go in with this mindset often end up gaining more. Bolder offers tend to be put forward at the beginning, which often leads to more superior outcomes.
If you enter your negotiations with a more negative mindset, and view the conversations you’re having as a risk, you become much more conservative in what you’re asking for, which results in less advantageous outcomes.
5. Do your homework
Before you arrive at the negotiation table, you need to make sure you understand as much about the person/company you’re dealing with, as well as the industry they’re in. Get to grips with the main terminology they’re likely to use so you don’t get intimidated by their jargon (and don’t forget, it’s ok to ask for clarification if you need it). Research their products, services, competitors – it will give you a sense of their strengths and weaknesses.
Spend some time thinking about what their key drivers are, not just what the risks and rewards are for you. Are there factors that mean the other party needs a deal concluded by a certain date, regardless of whether it’s the best deal? Or are they going to be willing to draw the matter out in order to get the best result?
Also, don’t forget to understand your position. What are you bringing to the table? Do you have a counter-offer prepared? Know your strengths – what sets you / your offer apart from their other options?
