Negotiating is one of the most important skills a person can master. This is true in all aspects of life. But it is absolutely critical in your day-to-day business activities. Yet many women lack this crucial skill. In fact, studies show that by neglecting to negotiate their starting salary for a first job, women sacrifice over three quarters of a million dollars in earnings by the end of their careers. But that’s not all. Additional research reveals that men are four times more likely to ask for higher pay than women with the exact same qualifications.

Unfortunately this trend continues with women who start their own business. Their lack of negotiation skills… or discomfort with negotiation… or refusal to negotiate comes into play when finding office space, hiring employees, dealing with vendors, working with partners, creating joint ventures, and more. For some reason women simply don’t ask.

  • Negotiating Is Good Marketing in Disguise

Most of the principles that apply to marketing also apply to negotiations. So it stands to reason that if you are a fairly good marketer you will be a fairly good negotiator. Likewise, if marketing is not your strong suit, you may need some help in the negotiation department.

Here is the 7 Core Principles for Million Dollar Negotiations:

1) Determine your desired outcome before you start your negotiation. It is critical to understand what you want before you ever set foot in a negotiation. That way, you’ll know when to push forward and when to stop. Knowing your bottom line prevents you from taking advantage of the other person in the negotiations (See Principle 7 for more on why this is a bad idea!)… And it also prevents you from agreeing to terms that are unacceptable to you.

2) Know your audience. This is by far the most important principle in marketing and in negotiating. Make sure you do your homework. Find out as much as possible about the person sitting across the table. Find out about other deals he has made. Understand if he is a handshake kind of person or a long contract kind of person and prepare yourself accordingly.

3) Understand your worth. The biggest mistake I see employees and entrepreneurs make, is not understanding what they really bring to the table. Make sure your accomplishments are ingrained in your head. But also make sure that they are accurate and consistent.

4) Listen, listen, and listen some more. Most of the time we are so busy making sure that people hear what we have to say that we forget to listen. But the best negotiators are detectives. They ask probing questions and then stop talking. The other negotiator will tell you everything you need to know – all you have to do is listen. Many conflicts can be resolved easily if we learn how to listen. You can become an effective listener by allowing the other person to do most of the talking.

Follow the 80/20 Rule: listen 80 percent of the time and talk only 20 percent of the time.

5) Lead with optimism. Aim high and expect the best outcome. Successful negotiators are optimists. If you expect more, you’ll get more. A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive, and buyers should offer less than they are prepared to pay. People who aim higher do better. Your optimism will become a self-fulfilling prophecy. Conversely, if you have low expectations, you will probably wind up with a less satisfying outcome.

6) Never threaten and don’t get emotionally involved. One big mistake many amateur negotiators make is to become too emotionally attached to winning. They shout, threaten, and demand to get their way. This is all counter-productive. Most deals are only possible if both people feel they’re getting something out of it. If the person across the table feels attacked, or doesn’t like you, they probably won’t back down. Most people hate bullies, and will be more willing to walk away from a transaction if it involves one. Be calm, patient, and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You’re much more likely to do well that way.

7) Never walk away feeling you “pulled one over” on someone else. Many people try to drain every last drop of blood from a negotiation. This is a mistake. If the other person feels they’ve been cheated, it can come back to bite you. They may not fulfill their part of the deal. They may refuse to deal with you in the future. They may even spread the word to others you might want to negotiate with. Negotiations should leave both parties feeling satisfied with the outcome. Be willing to give up things that don’t really matter to you in order to create a feeling of goodwill. For example, if you are renegotiating your office rent downwards, try to offer to sign a longer lease. That way, the landlord knows his property will have tenants for a longer time, and you get a better deal.

The ability to negotiate successfully in today’s turbulent business climate can make the difference between success and failure. It is a skill you must master. If you keep these seven strategies in mind each time you step into negotiations, you will be well on your way to earning a better income, eliminating frustration, and having a more satisfying life.

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