Business Brains - The Art of Successful Negotiation

Sep, 13, 2011

In the current economic climate investors and buyers are more determined than ever to negotiate a deal that gives them more for their money. However, achieving a successful outcome can require a whole new skills set.

For this reason and because they are too close to the business, owners are not always the best people to handle negotiations critical to the outcome and future of their business. They are often tempted to over-egg the detail to maximise interest, getting bogged down in unnecessary minutiae that clouds the situation and appearing over-anxious to clinch the deal.

As business advisers we often provide an interface for clients in a business sale or an investment raising process. So what tips would we give to people about to enter into a business negotiation?

Prior to sitting round the negotiating table:

1. Organise your thoughts. Outline concisely the key points you want to cover and know what you really want to achieve.

2. Recognise and work though every possible objection. Practice the responses and answers needed to allay negatives, fears, concerns or issues the other party may raise.

3. Test out your proposition benefits, USPs and possible objections from the other side on a trusted third party whom you know will be dispassionately objective.

4. Plan and plan again - you can never be prepared enough.

5. Know your most desired position and work out your fallback position and where you absolutely cannot go.

6. If at this stage you are not confident, or you believe the deal warrants it, consider engaging a professional to negotiate on your behalf.

At the negotiating table:

Focus on the Unique Selling Points (USP) of your services or products and translate them clearly and concisely into benefits for the other party. Simplify your message and elaborate when the other party asks questions.
Listen intently to the other side – this shows commitment. As negotiations commence, take notes to help you to plan your responses.
Take time over your responses. Don’t allow yourself to be rushed - a few silent minutes could be your most powerful negotiating tool.
Finally, read the reactions of the other party. 75% of communication is non-verbal – the better you are at using it and recognising it, the more effective a negotiator you will be.