{"id":132237,"date":"2024-10-05T12:05:26","date_gmt":"2024-10-05T16:05:26","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=132237"},"modified":"2024-10-07T12:50:09","modified_gmt":"2024-10-07T16:50:09","slug":"how-to-negotiate-in-business","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-to-negotiate-in-business\/","title":{"rendered":"How to Negotiate in Business: Tips for Gaining the Upper Hand"},"content":{"rendered":"\n

How effective are you at closing deals in your business? Are you always happy with the results?<\/p>\n\n\n\n

Self-made millionaire Felix Dennis writes in How to Get Rich<\/em> that mastering the art of negotiation can significantly impact your business’s success. Whether you’re buying or selling, effective negotiation skills<\/a> can lead to better deals and increased profits.<\/p>\n\n\n\n

Read on to discover expert tips on how to negotiate<\/a> in business and gain the upper hand in your next deal.<\/p>\n\n\n\n\n\n\n\n

Negotiation in Business<\/h2>\n\n\n\n

Dennis discusses the art of negotiation and how it can make or break your chance at wealth. This is because negotiating well can get you a lot of money if you\u2019re selling something, or the means to greatly boost your profits if you\u2019re buying a new product or service. Conversely, negotiating badly could lead to spending more than your business can afford or accepting deals for much less money than you should be asking for.<\/p>\n\n\n\n

The author says that most people are poor negotiators, and that most likely includes you. So, he provides some advice on how to negotiate in business, suggesting that you set firm limits on what you\u2019re willing to accept or pay during this deal prior to even beginning negotiations<\/strong>.<\/strong> Your opponent will try to sway you, but stick to those limits no matter what they say. Doing so will ensure that you aren\u2019t giving up more than you can afford and that you\u2019re not accepting a bad offer just for the sake of closing a deal<\/a>. <\/p>\n\n\n\n

(Shortform note: One way to ensure that you negotiate well and don\u2019t accept a bad deal is to first determine your best-case scenario without <\/em>those negotiations. In Getting to Yes<\/em><\/a>, negotiation experts Roger Fisher and William Ury call this your Best Alternative to a Negotiated Agreement (BATNA)<\/a>. They point out that the entire point of a negotiation is to reach a better outcome than you could achieve on your own. Therefore, there\u2019s no point in accepting a deal unless it\u2019s better than your BATNA\u2014if the other side can\u2019t or won\u2019t meet that benchmark, it\u2019s time to walk away.)<\/p>\n\n\n\n

Tip: Find and Exploit Your Opponent\u2019s Needs<\/h3>\n\n\n\n

Dennis says each side\u2019s respective weaknesses are the critical factors in most negotiations. Whoever is able to find and exploit the other side\u2019s weakness will get the better end of the deal. <\/strong>Therefore, before entering any negotiation, it\u2019s crucial to research your opponent and create your plan of attack\u2014hiring professional advisers to help with your preparation is often invaluable. <\/p>\n\n\n\n

To illustrate this idea, imagine you own a business that needs a steady supply of a particular product (say, straws for a restaurant), and you\u2019ve entered negotiations with a supplier who sells what you need. If you learn that the supplier is struggling due to an up-and-coming competitor pushing into their market, they\u2019ll be desperate to get you as a customer. You can exploit that weakness to get the supplies you need at a lower price, and Dennis strongly encourages you to do just that.<\/p>\n\n\n\n

However, this principle can also work against you. Therefore, if possible, identify your own weaknesses and hide them from the other party. <\/strong><\/p>\n\n\n\n

Continuing the previous example, suppose there\u2019s only one supplier who sells the specific type of straws you need. This puts you in a very weak position: You need what this supplier sells, and there\u2019s nowhere else for you to get it. If the supplier discovers those weaknesses, they could charge practically anything they want for their product and you\u2019d have no choice but to pay it. To hide this weakness, you might bluff by pretending that you\u2019re not especially interested in those particular straws and that you\u2019re prepared to use a different product if you can get it at a better price. <\/p>\n\n\n\n

The Three Kinds of Information<\/strong>

Dennis suggests preparing for negotiations by focusing your efforts on finding your opponent\u2019s needs and weaknesses, a particular type of information<\/a>. In Never Split the Difference<\/em><\/a>, former FBI hostage negotiator Chris Voss says that every negotiation relies on three types of information<\/a>.

1. Known knowns. <\/strong>This is any information that you already know, such as who the other party is and what each of you is hoping to get out of the negotiations. Voss warns that, while they\u2019re important, known knowns can cause you to focus too much on what you think you know and miss new information you could leverage. For instance, if you already know what your opponent wants from you, you might overlook a different need that you could exploit.

2. Known unknowns.<\/strong> This is information that you know exists, but you don\u2019t have it. For example, if the other party is trying to sell something, you know there must be a minimum amount they\u2019ll accept for it, but you don\u2019t know what it is. In fact, your entire purpose in this hypothetical negotiation is to come as close as possible to finding that minimum amount.

3. Unknown unknowns<\/a>.<\/strong> This is information that you don\u2019t have and don\u2019t even know that it exists. This is the most difficult information to find, but Voss says that it\u2019s also the most important kind of information. The unknown unknowns will most likely include your opponent\u2019s needs and weaknesses, which you can leverage during negotiations as Dennis urges you to do. Some tactics for finding this information include analyzing your opponent\u2019s nonverbal cues<\/a> for signs of weakness and building rapport to encourage them to drop their guard.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

How effective are you at closing deals in your business? Are you always happy with the results? Self-made millionaire Felix Dennis writes in How to Get Rich that mastering the art of negotiation can significantly impact your business’s success. Whether you’re buying or selling, effective negotiation skills can lead to better deals and increased profits. Read on to discover expert tips on how to negotiate in business and gain the upper hand in your next deal.<\/p>\n","protected":false},"author":9,"featured_media":132255,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,31],"tags":[1617],"class_list":["post-132237","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-money","tag-how-to-get-rich","","tg-column-two"],"yoast_head":"\nHow to Negotiate in Business: Tips for Gaining the Upper Hand - Shortform Books<\/title>\n<meta name=\"description\" content=\"Knowing how to negotiate in business can lead to better deals and increased profits. 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