5 Ways to Get the Most Out of Your Negotiations
Here's how to get the best value while building long-term business relationships.
When we negotiate with potential business partners, we want to get the best value for our money and build a relationship that can bring further profit down the road. With a very careful, calculated balance, we can have the best of both worlds.
The longevity of a business can be measured by how its internal and external relationships are built. Have they been created to last? Internal relationships are incredibly important, as it costs, on average, $4,000 to hire someone new, and up to $7,000 to replace someone in leadership.
The same can be said for external relationships — from customers and clients to suppliers and providers. By nurturing these relationships early on, we can save money in the long run and set up potential deals in the future.
In business negotiations, maintaining relationships can be exceptionally tricky. Both parties must walk away feeling like they are getting something from the deal. Poorly done negotiations can cause one or both parties to lose trust, which can cause a breakdown in the relationship.
Related: How to Teach People to Deal With You
Here are five ways to maximize negotiations and build long-term relationships.
1. Create a personal connection
Although it may seem like an email exchange is enough, a phone call or face-to-face interaction is incredibly important to build a connection prior to the negotiation. When your potential business partner can see your face or hear your voice, it’s immediately more personal than an email.
Before you jump into negotiations, spend at least five minutes getting to know each other. Studies have shown that people feel more cooperative, more trusting and are more willing to share information when small talk precedes a negotiation.
2. Encourage two-way conversation
For both parties to walk away from a negotiation feeling good, both must have felt heard. While you should come prepared with talking points, you should also come prepared to listen. Remember, the other person has come with things he or she would like to share as well. When both parties feel heard, you’re more equipped to negotiate what’s on the table. Having that open communication is also a building block of an effective partnership and strong relationship.
3. Come prepared
In any negotiation, you should come with an ultimate goal and an idea of what you’re willing to budge on. For example, when a person enters a negotiation for a higher salary, he or she might put a number on the table that is higher than his or her ultimate goal, so that there’s room for the other person to feel as if he or she has negotiated the other person down. In reality, the first person is getting the salary he or she would like because he or she put out a number higher than the goal salary. Enter your business negotiations with a plan for what is non-negotiable and what has room for change.
4. See it from an outside perspective
Sometimes, especially for small-business owners, it’s easy to take things personally. We must remember that in negotiations, we are dealing with business only. There’s no place for emotion in business; in fact, emotion can often trip you up in business dealings. If this is a struggle for you, try taking an outsider’s perspective. By doing this, you’ll remove yourself and your emotions from the negotiation. You’ll be able to better stick to your pre-chosen positions. Your business partner will see you as more professional, which will help nurture your relationship further.
5. Don’t let value today take precedent
It’s easy to focus on today’s deal above all else. However, sometimes we must play the long game. Consider what a long-term relationship with this business partner could mean. Will he or she bring more deals to you in the future? Is there potential for much greater earnings down the road? Sometimes, we must take less value today and trade it in for future deals. This can only be done by weighing the importance of the long-term relationship.
Business is a series of relationships — those with your customers, suppliers and employees. We negotiate with these people every day, in small and large ways. When it’s time to sit down and have an effective negotiation, remember the importance of the longevity of your relationship.
Entrepreneur Leadership Network Contributor