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Blog // 31/10/2016

A guide to successful negotiation

Business negotiation guide

Somebody somewhere has written about negotiation as a modern analogue to Pleistocene survivalist practices: Erg from the Cave over the Hill had the biggest club, and when the neighbouring tribe offered him a meagre handful of berries in return for the weekly meat and animal oil trade, he beaned them one and walked off with their wolf hides. Erg wins again!

Such a ruthless narrative of success is echoed in the public’s idea of business dealings, and the self-involved aspects of securing a good deal are laid bare in movies and business books. It’s a shame because negotiation shouldn’t be a source of fear. It’s a key skill, and it meaningfully moves things forward. The bulk of us get through our formal education, however, without much guidance on this important front.

Lessons in negotiation

Martin Atkins - Menzies AccountantIf you are reading this, you are involved in business in some way. Much of your thought is bent towards improving the prospects of the business you are involved in.

Negotiation expert Natalie Reynolds cuts us to the quick when she writes that ‘a common mistake is to try to bypass the negotiation entirely, believing that both you and the other party will be grateful that they have avoided all that unnecessary awkwardness and “wasted time”.’

Sending the signal, she insists, that what is at stake is barely worth any scrutiny just devalues the whole enterprise. If the outcome matters to you enough that it has an impact on your feelings of success, then why broadcast to your counterparty that it doesn’t matter?


The basics of negotiation

Avoid thinking it’s all about you

Business negotiationsThe notion can be gratifying in the short term if you ‘win’, but not nearly as rewarding for you or the business in the long term.

At the risk of stating the obvious, securing one rewarding deal pales in comparison to a positive commercial relationship that endures.

When it comes to salary, make a case for the total package

Knowing what you want is key, but outlining your demands point by point can be overbearingly contentious. Instead, frame the discussion convincingly around what you need to do the job. ‘And part of the frame you want to bring,’ explains Stanford’s Margaret A. Neale to Forbes, ‘is “Here are the resources I need to be effective”.’

Failing to negotiate damages your starting point

Negotiation experts often cite the example of two people starting the same career together; all else being equal, the one who secures a few thousand more pounds in year one will be drastically better off by the end of their tenure. A similar case can be made for commercial deal-making. The first transaction is now the anchor point. Don’t let inaction or misplaced politeness diminish the angle of your upward trajectory.

Erg from the Cave over the Hill certainly never did, but then his club was more suited to control than to negotiation.


Three things to keep in mind during negotiations

Business negotiationWhile we stand by the advice below, we want to emphasise that it’s one thing to understand clever negotiating strategies, and it’s quite another to put them into practice. Do just that: practise and prepare. Read further guidance from other reputable sources until you get really comfortable with the whys and wherefores. If you care about your career, and we’re guessing you do, doing the real cognitive work to improve your negotiation prowess even if it involves elbow grease and fear – especially if it involves some fear – may just change your life a little bit.

1 – Do your homework

What is important to your counterparty? What anxieties are they trying to assuage? Endeavouring to see things from the other point of view beforehand can only help your case.

Find out what an industry-standard agreement looks like. Once the team across the table is presented with evidence about how such discussions usually go and what terms are widely accepted as fair, you’ll seldom find them willing to ask for more unless they clearly deserve it. And what if they are really and truly after something that entails too much pain to provide? You don’t want to find that out during the one and only face-to-face discussion, if it can be helped.

2 – Use your network

This ties into doing your homework. Depend on your network for a picture of what you’re dealing with instead of just crossing your fingers and hoping for the best. There are people who well understand the motivations of your counterparties, or who can at least offer some nuance. Why go in blind when there are people willing to give you a leg up?

3 – Don’t be flummoxed by ‘no’

Your momentum could be derailed when the counterparty won’t budge, especially if you are emotionally invested in the outcome. On the flip side, the grace you show in acknowledging rejection during negotiations without accepting it wholesale demonstrates that you’re not a business automaton. By showing them that you’re listening, you draw the audience in.

For further information on the above, please contact Menzies Head of Business Services Martin Atkins on matkins@menzies.co.uk or phone 020 3795 3456.

Find out more about Menzies Business Services sector services.

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