One of the key skills needed by operators of small businesses is negotiation. Negotiation is something we do everyday – sometimes successfully sometimes not, often spontaneously and sometimes planned. As operators of small businesses, we are negotiating with suppliers, customers, employees, competitors and government – just to name a few.
There are three basic rules for successful, win-win negotiating:
Keep the range of issues to be included in the negotiation as broad as possible. Narrowing the negotiation to one issue often means that someone is going to lose.
Get to know the other person over and above their business or the deal being negotiated. This allows you to identify and understand what is important to them and, to broaden the range of issues around which you can negotiate.
We need to understand that all people are not the same with different perspectives and priorities. Never assume that the other person’s perspectives are the same as yours nor, that money is always the bottom line.
The secret to successful negotiation is giving up something that is of little value to you but is of great value to the other person. Often people commence negotiating without knowing what their own ‘bottom line’ is or, what the other person’s bottom line is (or an educated guess as to what it might be). Knowing your own ‘bottom line’ as well as what the ‘bottom line’ of the other person might be, defines the range over which the negotiation may take place.
Successful negotiation relies on both parties each achieving a satisfactory result; In other words a win-win situation. Striving for a win-lose situation, or a win-at-all-costs approach may achieve a result on this occasion but may result in ramifications when you come to do business with the other person again. This is a most likely circumstance for small business operators trading in small markets – such as the Cradle Coast region of Tasmania. There is little value in winning the battle only to lose the war in the longer term.