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Entrepreneurs cannot afford to be timid or leery of negotiations. Business deals are won or lost based on each party`s ability to negotiate. Strong negotiation skills are necessary to obtain lower interest rates on credit, receive long-terms on purchases, and obtain shorter terms on receivables. There is power in being a strong negotiator and the success of your company will depend on it at some point.
The skill and experience of the negotiator is usually the largest factor in determining who will succeed with the better end of the deal. Usually the more skilled the negotiator is, the more often the negotiator will come out on top. The larger the difference in skill between negotiators, the more the skilled negotiator will be able to gain from the other party.
Unskilled negotiators improve in their chance of successful negotiations when they possess the power with respect to what is being negotiated. If you are a supplier looking to land a client, the client has an automatic advantage. You want their business, but that doesn’t mean you need to settle of undervalue your company. Always remember your service is still needed and you shouldn’t make unreasonable sacrifices just to secure a deal. Go into every negotiation with an ideal result in mind, as well as the minimum you are willing to give to close the deal. Don’t settle for anything that does not fit into the range you have pre-determined.
Here are some things to consider before entering your next negotiation.
- Planning skills – Know the details of the deal inside and out before approaching the negotiation. Being unsure of something shows a sign of weakness.
- Ability to think clearly under stress – Don’t become emotionally involved in the negotiation. It is a business deal and if it doesn’t work, there will be more.
- General practical intelligence – Use common sense examples when justifying your terms. Try to relate to the other party and their concerns.
- Verbal ability – Always speak clearly and use keywords that will trigger an agreement.
- Product knowledge – Know what is being offered including all of its advantages and disadvantages. Highlight the facts that are beneficial to each party.
- Personal integrity – Always remain professional. Negotiations are not opportunities to act like a bully. Respect should always be at the forefront of a negotiation.
- Ability to perceive and exploit power – Leverage what you can when needed and don’t allow yourself to get back into a corner.
Negotiations may not be your favourite thing, but they are fundamental in all types of businesses. You can save your business significant money through successful negotiations and you can use it to improve your cash flow. By negotiating longer terms on payables and shorter terms on receivables, you will have more working capital to use to your advantage.
The article is posted by Gerwyn Wallto. You can find more articles on a Web Based Invoicing website.