As the owner of a small business, you are confronted daily with numerous transactions, large and small: hiring employees, engaging vendors, leasing equipment, selling your products or services. Each of these transactions is unique and likely would benefit from fine-tuning to address their unique aspects. But if you have been on the losing end of a “hard ball” negotiation and have a preference for form agreements and list prices, you are missing an essential tool in the smart businesswoman’s tool box – “win-win” negotiation.
With a little preparation, you can go into every negotiation with confidence and emerge with both sides feeling that they have won. Win-win negotiations allow each side to get its needs satisfied, ensuring a mutually beneficial long term relationship. Here’s how:
1.) Identify and rank your priorities. List the most important outcomes for you from this transaction. Getting the biggest paycheck possible? Minimizing risk? Retaining creative control? First, go for broke – fantasize about the very best result for you on each point. Then, come back to Earth and prioritize -- which are essential, which are the deal breakers (there should be no more than one or two of these), and which are negotiable. Finally, among the negotiables, determine the minimum amount or possible alternatives that you are willing to accept for each.
2.) Understand the other side’s priorities and be willing to compromise to accommodate them. Listening is critical. Ask questions to determine what the other side’s deal breakers are. In a perfect world, you will find that the other person wants what you are prepared to trade. In the real world, be prepared to compromise. Start by making concessions on your low-priority issues in exchange for concessions on issues you value more highly, such as a price break for a quick sale.
3.) Make a win-win solution -- not winning -- the goal from the outset. You have a much better chance of coming to a win-win solution if you approach the negotiation wanting to reach this outcome. Constantly reinforce your interest in the other side's concerns and your determination to reach a mutually satisfactory agreement.
4.) Remember that parties that feel fairly treated will reciprocate when tweaking is needed and when it is time to renew. It is critical to build trust and maintain a positive climate. Using tricks and manipulation during a negotiation will undermine trust and damage teamwork. For an effective long-term relationship, honesty and openness are almost always the best policies.
5.) Be open to thinking outside-of-the-box and make sure that everyone on your team is capable of the same. You have more to bargain with than just dollars and cents. Everyone on your team should be clear that the goal is to find the best possible solutions for the parties by keeping the atmosphere friendly and non-adversarial. Oftentimes, this requires an ability and willingness to think outside-of-the-box and to see the world in terms other than just dollars and cents.
