Negotiations can be both exciting and stressful. There’s always the worry that the deal will fall through, or that something might get overlooked, which could cause huge issues later on down the line. You might even be worried you won’t get what you want. Negotiations and business deals are a part of the corporate and business world that we’ll all have to face at some point. Negotiations can range from multi-company mergers and purchase agreements to simple employee or consultant contract negotiations.
Stress levels are high during negotiations. That’s why we thought it’d be helpful to have a few tips on what to remember during a business negotiation.
Table of Contents
Listen & Ask Questions
Listen to the other side of the negotiation. If you don’t know their pain points and goals for the deal, you could end up missing out on any contract or deal. It’s important to understand the motivations of both sides of any agreement. In order to do this, you must listen closely and ask the right questions to understand.
Timing Is Everything
Timing is a huge part of any negotiation strategy. Too slow, and the other side could end up going with another offer or getting fed up with the lack of progress. Too fast, and you could end up missing vital aspects of a contract, or settling on things you wouldn’t otherwise. The key to a successful business deal negotiation is to set deadlines and benchmarks in the beginning. Then, take necessary breaks and step back. These benchmarks help keep both sides on track and moving forward. Taking a break is also important to help both sides of any negotiation process the discussions and how they feel about the progress of the deal. These breaks can also be a valuable time for you to discuss strategy with your team. If things move too fast, you may not have the chance to involve them in the negotiation.
Lay Out the Process Clearly in the Beginning
Benchmarks, as mentioned before, are a huge part of a successful negotiation. In addition to that, start by laying out the process in clear terms for how the negotiations will unfold. Clear communication is essential in these kinds of business deals. When both parties clearly understand how the process will occur, it can save a lot of potential confusion or frustration. Set ground rules for the process. Outline the specific motivations and goals both sides have for this deal. Agree on a facilitator for the negotiations and set out a timeline to discuss each separate aspect of the deal to keep things clear for everyone involved.
Never go into a negotiation unprepared. It’s not enough to understand what you’re bringing to the table and what your goals are. You need to understand what the other side’s skills, pain points, history, and what other offers they might have. Being prepared means understanding the goals, shortfalls, and alternatives of both sides. In the end, understanding the motivations of the other side of any deal will help you to understand the bigger picture. You’ll know where you may need to give a little as well as where you’re comfortable compromising and where you’re not. Showing that you’re prepared shows that you’re serious about the success of the deal.
Go Through Multiple Drafts
Never agree on the first draft as the final deal. Both sides should digest this first draft and make appropriate suggestions for edits and changes. Getting to that first deal can be a long and confusing process. By the time you get to that place, things you discussed in the very beginning may look very different. Take the time to review the first draft, as well as the second and third, and be sure you’re comfortable with everything. Make sure that you’re not missing anything that could pop up later.
To stop you from feeling rushed in these critical moments, it can be helpful to negotiate a shut-down move early on in the process. These moves simply serve as agreements that the other side won’t look at other offers throughout this timeline, and in turn, you’ll be providing added value to them. This could be in the form of your contact list or a specific software you own, etc.
Bring in Trustworthy Help
Sometimes, the best thing to do for a business deal is to bring in a consultant. A business consultant can serve as a neutral party with valuable experience and insight into the business negotiation process. A good consultant can help to assure that the process follows a clear timeline and that vital steps and parts of any agreement aren’t missed. Generally, business consultants have been involved in these types of negotiations before. They can help you to keep emotion out of the process and smoothly reach an agreement — or not, depending on what works for both sides.
Remember, not every business deal negotiation ends in an agreement and a deal. Sometimes, the best outcome is for both sides to walk away. Don’t fixate too much on small specific aspects or on getting the deal done. Think about the big picture.
There’s a lot that goes into business negotiations, and they can be overwhelming and time-consuming. We’ve found that clear communication and setting agreed upon deadlines and benchmarks is vital to any business negotiation’s success. Bringing in neutral outside help in the form of a business consultant is also one of the most valuable things you can do for any negotiation process. At Genesa, we’re happy to be the neutral force in any business negotiation to assure that your business deal runs smoothly. If you’re looking for some help with strategizing your negotiation process or for a business consultant to join the negotiations, we’d be happy to help. Contact us today.