One of the most difficult parts of business is negotiating. It’s a skill that we develop from birth. That’s right! We come out of the womb with negotiating skills.
If you have any doubts, watch babies. Babies start their negotiation by screaming like some power-crazed corporate leader until they get what they want. Parents immediately start wondering whether the baby is hungry, wants to be held or has some other need, and they do whatever it takes to make their baby happy.As we get older, we negotiate with our parents over additional television time, presents, trips to the mall with our friends, allowance, baby-sitting fees and car time. Kids negotiate with friends for who gets to bat first in a baseball game, be the first to roll the dice in a board game or sleep on the top bunk at overnight camp.Once we become adults, we negotiate our employment agreements, apartment rent, business rent, bank loans, personal loans, car purchases, venture capital for new businesses and strategic partnerships. There is no end to the amount of negotiating we have to do throughout our life.To be a good negotiator, you have to do eight things:
1. Know your goal. You have to have an objective. It could be a 5% salary increase, 10% increase in what you want to charge a client or the percentage of a new business you must own when negotiating with investors.
2. Listen! So many people, when negotiating, are so busy thinking about what they are going to say and what they want that they don’t listen to the other side. They don’t listen to the words and how those words are used by the other side.
3. Keep your eyes open. Along with the need to be a good listener, you have to be good at observing who you are speaking with. Are they nervous, calm or distracted? Certain words or ways that you physically convey a sentence may make them react in a certain way. For example, if you sit with your arms crossed, the person on the other side may think you are holding back or not open to discussion.
4. Understand the other side. It’s essential to understand the objectives of the other side so you will understand what is important to them and what they might be willing to give up. For example, when I was negotiating my employment contract with my investors, I knew it was important that I give up my other business interests, but at the same time I knew they valued my contacts. I negotiated to keep my columns and work with various universities, which I enjoy.
5. Develop a case. Not all negotiations are built on logic, especially when you are dealing with an emotional issue like selling or buying a business from an entrepreneur or a family member. But developing good reasons for why you want something can increase your chances of getting what you want.
6. Stay dispassionate. Never lose your head and become emotional. It’s good to stay detached and objective. Passion is great for building a great business or a solid relationship, but not when you are negotiating — emotion can cause you to make a mistake.
7. Be ready to walk away. One of the best negotiators I ever met was Ira Lubert, the founder of Lubert Adler, a multibillion-dollar real estate and venture capital company. Ira started out by buying trailers for students to live at Penn State when he was an undergraduate and over time built an empire. I never forgot my first meeting with Ira in his office in 1987. He told me after a phone call that you have to be able to walk away from a deal if it doesn’t make business or strategic sense.
8. Work toward a win-win. Finally, a negotiation where the other side feels that they lost is not a successful negotiation. Leaving something on the table for the other side will build relationships. Life goes in circles, and when the other side has the upper hand someday, you’ll want them to be fair.