Entrepreneurs are constantly making deals, so learning how to negotiate becomes an essential skill to master. But when you’re at the bargaining table, it sometimes can be difficult to strike the right balance and arrive at a healthy compromise with a client or partner.
To learn how to become a successful negotiator, we asked a group of Young Entrepreneur Council members to weigh in on the following question:
Q. What type of negotiation strategy do you prefer using? Why is it effective?
1. Be willing to walk away
You have to go into a negotiation knowing that there are results that will hurt you. If the situation arises, you have to be willing to walk away. If you’re trying to be aggressive, you can walk away earlier which may cause the other party to fold, but realize if you walk away and then come back, you’ve lost all your cards. —Anthony Saladino, Kitchen Cabinet Kings
2. Let the other party make the first offer
One great negotiation strategy is to get the other individual to make the first offer. That way, you can better gauge how the negotiation is going. You never want to speak first, because you might be selling yourself short or pricing yourself out of the conversation. Be blunt if necessary. Ask the other side what they want in a bottom-line fashion. —Andrew Schrage, Money Crashers Personal Finance
3. Listen more
During a negotiation, it’s best to only talk when necessary. By sticking to this rule, one prevents the cardinal sin of overtalking, and one reduces the chance of saying something disagreeable. By giving other parties enough time to speak early in a negotiation, you are able to modify your position without contradicting yourself. —Ismael Wrixen, FE International
4. Focus on what they want first
5. Offer preemptive concessions
6. Know where you can “budge” ahead of time
In every negotiation, I know what I need and what I want. The difference is that “what I need” is something I can’t budge on, but something that “I want,” I can. Knowing what those two things are will help you navigate every negotiation. You will know when you put your foot down and fight, and when to give in a little to the other side. Without knowing this, you risk leaving without what you need. —Colbey Pfund, LFNT Distribution
7. Go in with a win-win mindset
This is the only strategy that I try to deploy during a negotiation. Negotiations should be thought of as the bridge to long-lasting and trusting relationships. Too often, people treat negotiations as a way to “get the best of” the other person. Ultimately negotiations that are centered around this are win-lose and that’s not good for anyone, especially the winner’s reputation. —Nicole Munoz, Nicole Munoz Consulting, Inc.
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8. Do not be pushy
Trying to force a deal on someone can push them away. I try to always let deals happen naturally. I do not put on a different persona; I go in and be myself. I speak up when I think something is not fair or right, and I listen when the other side brings up the same. If it is a deal that is meant to be made, it will be. But whatever you do, do not be pushy. No one enjoys that approach. —Adrien Schmidt, Aristotle by Bouquet.ai
9. Set deadlines
Using deadlines in a negotiation strategy works well because it forces people to take action in a timely matter. If you give them an unlimited amount of time to think it over and make a decision, the negotiation process could go on forever. But a reasonable deadline politely forces the other person to make a decision so that you can move forward. —Stephanie Wells, Formidable Forms
10. Focus on return on investment
Negotiation exists for the sake of reducing ongoing expenses. Instead of discussing costs and fees, an ROI-driven conversation would yield a better output than going through price charts. Finding unique opportunities to deliver value by a combination of lead generation opportunities and automation would be incrementally better. —Mario Peshev, DevriX
11. Practice transparency
Negotiating with clients and investors is one of the most challenging aspects of being an entrepreneur. I find that by being transparent, and letting others know exactly what I expect and what I’m willing to offer in exchange for their partnership, we are more likely to come to an agreement. Plus, when you’re transparent, people tend to trust you, which could lead to big business partnerships. —Syed Balkhi, WPBeginner
12. Use objective, third-party criteria
A successful negotiation strategy is to use objective, third-party criteria to resolve differences with the other party. By pointing to objective third-party sources as the basis for your position, you can depersonalize the negotiation and achieve a fair compromise for both parties. —Doug Bend, Bend Law Group, PC
13. Find out what they’re willing to trade
The key to a successful negotiation is to make sure the deal is a win-win for both parties. For instance, if the other party won’t give you a lower price, maybe they’re able to throw in an extra service for free. Find out what they’re willing to trade off for by asking open-ended questions like, “What if we increase the quantity?” and “Would you offer us a discount?” during the negotiation. —John Turner, SeedProd LLC
14. Be fully prepared
It’s natural to walk into a negotiation and think about your objectives and the language you’ll use. What’s not natural for most people is preparing for the full negotiation. What does your counterpart value? What other alternatives are there if you can’t close a deal? What are you most willing to yield (a.k.a., something you want that you can do without)? Your preparation is your strategy. —Aaron Schwartz, Passport
15. Be your authentic self
I find the best negotiation strategy is to be your authentic self. People can tell when you are trying to close them before they’re ready to do business and it makes them feel uncomfortable. The close should come naturally. People like to do business with someone they trust and have an authentic connection with, and who can provide them with solutions—not a hard close. —Ben Walker, Transcription Outsourcing, LLC
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