What Is Negotiation? Explore Best Business Negotiation Practices And Tips

This article covers what is negotiation means and how negotiation helps your business grow. Also, you will learn the business negotiation practices and tips to help you resolve or avoid future conflicts with the other party.

Negotiation is a discussion between two individual parties that strategically try to persuade each other to come to a solution over a problem, provided that the solution benefits one of the parties more than the other. Negotiation always lies on the thin border of dispute and arguments but a successful negotiation will never cross the boundary and instead seek to resolve things in a way that suits both of the parties.

Of course, this doesn’t mean that both parties are liable to equal benefits in the aftermath of a particularly good negotiation. There will always be one side that stands to lose more in negotiation and one side that stands to win more. A favorable negotiation is said to have occurred for the winning party and an unfavourable negotiation is said to have occurred for the losing party.

That being said, good negotiators always find a way through which they win their negotiations while making their counterparts feel satisfied with the aftermath at the same time. Negotiations can occur between anyone but they are the most commonplace as business negotiation as two companies try to come over a solution to a business dispute.

Negotiations also occur regularly in the form of sales negotiation as employees try to sell products and services to their clients while setting a hard bargain for them. If you wish for your business to grow, it is essential that you learn the importance of negotiating successfully and in this article, we will help you do exactly that along with several tips and recommended practices.

How Can Negotiation Help Your Business Grow?

As a representative of your business organization, when you are conducting a business negotiation with someone, the outcome of your negotiation may very well decide the relationship between you and the other party and also impact the future of your business. Dealing with business negotiation in an unprofessional manner may infuriate both parties and destroy all business relationships.

This can be extremely harmful, especially when interacting with a valuable client or a reliable and trustworthy manufacturer. However, a successful negotiation does exactly the opposite of that. It helps businesses build better and deeper relationships with each other. When parties arrive at an outcome that benefits both of them greatly, which can only happen after a good business negotiation, it can lead to more businesses seeking your services or partnerships.

Good negotiation skills also help both parties get their demands across. When you know what demands your clients have of you, you can deliver the solutions with better quality that last longer instead of short-term solutions that can only end up dissatisfying the clients as well as your own business executives.

Negotiations are also vital because they help you avoid future conflicts with the other party. Imagine this – you are going back and forth with a client who keeps making implausible demands and instead of making them some other lucrative offer you straight up reject their demands on unreasonable grounds. This is bound to make any party furious and end the business negotiation then and there without explanation – all because of poor negotiation skills.

Best Business Negotiation Practices

There are several business negotiation practices that are used by negotiating professionals on the top to ensure successful dealings each time they negotiate. If you too want your negotiation skills to match theirs, then follow these practices given below to do so.

1. Prepare adequately beforehand

Familiarize yourself with the other party in advance. The more you know about their services, their products and their needs, the more you will know what they will ask during the business negotiation. Their priorities can help you plan your own points in such a way that you can satisfy their needs while holding your own ground.

2. Be firm in your offers

Many businessmen will either highball or lowball the offer, depending on what benefits them the most. This is a classic intimidation tactic designed to scare you off and it is your responsibility that you hold your grounds against such boisterous offers. Always stand firm and tell the other party outright when their offers are unfair.

3. Compromise when needed

It is important to know that you are not always in the most influential and assertive positions when you are negotiating. Especially as a business just starting out, it is important that you accept sales negotiations that aren’t that favourable to you and play the deal according to their terms to a certain point.

Business Negotiation Tips

Apart from following general practices, there are a number of other things that negotiating professionals recommend you to do. Read on to discover amazing business negotiation tips that can help you achieve negotiating perfection –

1. Ensure your offer goes first

One of the most crucial business negotiation tips professionals always offer is to ensure that your offer goes first. This gives you better control over the final price and ensures the price benefit stays on your side.

2. Don’t use vague price ranges

Most businessmen often use a price range to value their services or items. However, this affects your deal adversely because you reveal the limit of how low you can go with the range which will make the other person offer the price in that exact low range.

3. Silence is key

When negotiating, let your counterparts do the most talking. Listen to them as much as you can and only speak when spoken to or when making offers. Steady eye contact but lips pursed seal with silence ensure that your counterpart gets flustered and makes an offer that they didn’t intend to.

4. Make the questions more open-ended

Instead of asking your clients questions that can be replied to in a linear manner, ask them questions that put the questioning ball in their court and make them do the thinking.

5. Ensure the negotiation benefits both sides

Negotiations don’t work between two individuals where one of them gets an immense advantage over the other. Don’t try to negotiate with a thought process of “I must win no matter what” but instead think “how we both can win a little out of this”.