Here are some situations where skillful negotiation tactics will benefit you and your business.
Sizing Up Customers and Suppliers
Experience will teach you – and rather quickly – how to spot the kind of customers who prefer to bargain with you before buying your products. Once you have identified these customers, you can easily meet their needs and still make a profit.
You can mark up your prices slightly so that you have some room to negotiate when a particular customer starts haggling with you. You could also reduce the price of some of your products and services to attract this type of customer.
If your customer insists on you matching an offer made by one of your competitors and you are unable to do so, try convincing the customer on the superior features, if any, that your product has.
Also tell them that your product has a better warranty than your competitor’s. Be honest at all times and do not make any promises during the negotiation that you cannot fulfill.
Don’t Give Away the Farm
While the goal is to sell your products and services, you should keep in mind that it may not be possible to always lower your prices to the satisfaction of very picky customers. You might however, extend additional credit on non-sale merchandise, provided customers make their payments in a timely fashion.
You should also negotiate with your suppliers in much the same way. If your suppliers are unwilling to reduce their rates, then you can ask for free delivery to your store or even negotiate for an extended credit period.
You can also negotiate with your employees when you are hiring them. You might offer them a lower salary in return for more flexible working hours or additional vacation time.
The point of negotiation is for each party to get something that they want or that will benefit them.
Don’t Take It Personally
Don’t take negotiations personally. Always act professionally in any situation. Make sure you treat others with respect and never be argumentative. You should observe your counterpart’s body language and facial expressions to get a feel for where the negotiation is headed.
If you are not ready to make a decision right away, be honest. Tell all parties involved that you need some time to think about what to do and that you will get back to them.
Then make sure you keep your word. It is better to take some time out during a negotiation than to make snap decisions that you will regret in the long run.
Dealing With Your Bank
You should understand that a successful negotiation means that all the sides in the deal are satisfied in thinking that they have managed to make the best possible deal for their business. So why do so many business owners forget that they can also negotiate with their banking institution?
If you are applying for a business loan, you will need to negotiate the interest rate on the loan as well as the repayment terms. Make sure that you have a negotiation plan in place beforehand. Calculate the highest rate that you can afford, keeping this number in mind during the process.
Negotiating skillfully when doing business isn’t as hard as you might think. Your small business will grow and thrive if you are able to make savvy business decisions.