With the challenging economic and business environment we are in due to COVID-19, many businesses are finding themselves in a position where negotiation skills are more important than ever. Whether you are in the process of selling your business, renegotiating a commercial lease, working with suppliers or working with a new client, all these conversations may be more difficult today than they were just 6 weeks ago. The good news is that you can almost always get what you ask for – if that is, you are able to ask the “right” way.
Based on interactions by our VFO Inner Circle team over many years with self-made ultra-high net worth individuals, professionals whose success is based on negotiating prowess, and successful entrepreneurs, we see that the most successful negotiations take into account three key factors:
- A solid understanding of the issues
- A particular mindset
- People smarts
Understanding the Issues
Having a solid grasp of the issues involved is essential to conduct a successful business negotiation. By understanding the relative importance of the key technical, legal and financial issues, and a superior comprehension of the intricacies of those terms in the agreement, can lead to superior results. This edge can also be enhanced by ensuring you have the right team of professionals on your team to help identify where there may be an advantage.
Your Mindset
A bad deal is almost always worse than no deal at all. In order to avoid a bad deal, it is important that you set a minimum set of conditions to close the deal that will satisfy your needs. If you are able to get all of your wants along the way, even better! This will be the same for your counterparties as well. If you really care about creating a win-win scenario you are more likely to get more of what you want as well. While this win-win mindset is important, it is important that you avoid deals that fail to address your needs.
People Smarts
The proper mindset and expert grasp of the issues are unlikely to get you the outcome you desire. You also need people smarts.
Know Yourself – Before going into any negotiation, you should be clear about what you need and want to accomplish. Here are a few questions you need to answer:
- What do you want out of the negotiation?
- What do you need out of the negotiation?
- What is at stake financially and mentally?
- What if an agreement isn’t reached?
It is important that you are clear and honest with yourself about being focused on your enlightened self-interest and know what success looks like before entering the negotiation.
Know Your Counterparties – There are ways to become more informed about the people you will be negotiating with:
- Review previous deals they have done and how they played out.
- In the early stages of the negotiation, focus on listening carefully and work to be nonjudgmental to the other party’s views and arguments. This will encourage them to open up more and help you get a better understanding of what they need and want from the negotiation.
- Focus on open ended questions and take a real interest in learning what find most valuable and how they think.
Bringing It All Together
Using these tools and practicing them regularly will lead to better outcomes from your negotiations and will result in you getting what you need and want more often!
This blog post was based on a report published by VFO Inner Circle, a global financial concierge group I have on retainer to keep me up to date on the latest research and strategies for addressing the key concerns for successful families and business owners.