How to Negotiate For Your Small Business

Everyone starts small. The beginnings are usually humble and full of new experiences. We use everything within our means and in our knowledge for sustenance. And negotiation is no exception–whether you own a big or a small business.

But today, let’s connect to the small business owners out there. No doubt it is terrifying to be at the roundtable. You are fresh in the market and must convince seasoned investors or businesses. While your anxiety will eventually regulate, you can immediately know a few strategies to conduct a successful negotiation.

The key to a successful business is multi-faceted. And one facet is negotiation. High-net-worth individuals (HNWIs) advocate for a systematic approach toward negotiation. And today, we will explore what the fundamentals are. Here is how to negotiate for your small business.

You are the solution 

As a small business owner, you need resources. But why should anyone invest in yours? What difference will it make? HNWIs often say that they often had to convince the other party that their projects were different at the start of their entrepreneurial journeys.

As a negotiator, you must persuade the other party to trust your project. Communicate your plans in a way that suggests an opportunity to find a solution to a problem otherwise unresolved or poorly solved. However, do more than rely on words; demonstrate through presentations, stats, and testimonials.

It helps them too 

Of course, business negotiations are transactional. Each party will look for something to benefit from. And this is where you need to be well-prepared. Small businesses are emerging opportunities. They are yet to establish a robust goodwill wherein they don’t need to prove their merit every time. That is why you need investors or collaborations to ramp up brand awareness and market operations.

When negotiating, focus on how the collaboration would help the other party. Emphasize the profitability in the long-term and its diversification. Go for a fair and mutually beneficial agreement to seal the deal.

Give an Expiration Date 

It is unfortunate that investors often perceive small businesses as desperate and willing to wait endlessly for a deal to come to full fruition. People in this territory should perhaps change direction. You own a business. That’s a huge deal in itself. And, hinting that you’ll wait out for the investors to come around, then they may take you less seriously.

Instead, negotiate with an expiration date. Make sure you are bold and clear about your pointers, your requirements, and the duration for which the offer stands. Communicate this in writing as well. Ask any HNWI they will tell you how effective this negotiating tactic is.

Pay Attention 

Keep the other party involved. How? To listen and respond. The details of the negotiation can become long-drawn-out and technical, which can be boring. But, you have to be present in the room, mentally. One of the ways you can assure the other side of your attentiveness is through mirroring. Basically, you repeat keywords used by the other party. Repeat words that they have just spoken. It is a reaffirming technique and is quite commonly used in negotiations.

Similarly, you can have your partners write down notes. Save the information on the cloud and share it with the other party. A collaborative approach will bolster their confidence in your seriousness.

Ask open-ended questions 

Quite often, inexperienced negotiators would ask close-ended questions. The answers to these questions are always a yes or a no. And they do not provide much information. It is a business deal you are trying to get sealed, which means we are discussing a complex of information.

It is always advised to place open-ended questions before the other party. You’ll receive answers in detail, which will help you know how well the other party is able to understand the agreement. They will be able to communicate their reservations, ideas, and suggestions more freely. More room for discussion is a healthy aspect and can go in your favor too.

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