How Do You Get the Best Deal?
If there’s one lesson I’ve learned in my career as an entrepreneur, it’s this: You can negotiate almost anything.
If there’s one lesson I’ve learned in my career as an entrepreneur, it’s this: You can negotiate almost anything. Whether it’s a purchase price, a business deal, or a contract, what’s important is that you get the best deal possible for yourself or your company.
There are many dos and don’ts in the art of negotiation, and it would take a book to delve into the specifics of them all. But there are a number of strategies I’ve found to be very successful that I’d like to share with you today.
1. You Can Negotiate Anything
No one pays the asking price for a car or a house, but did you know the same things applies to almost any other purchase or deal? Even in retail stores, your cable company, and other businesses it pays to ask for a lower price. The worst that can happen is they say no. But if there’s any maneuvering room, it will work out to your benefit.
2. If you’re negotiating a price, don’t make the first offer.
You should always be willing to pay what you believe something is worth. But what if the person you’re buying from thinks it’s worth less than you do? You won’t know that until you hear what the seller is offering. Play your cards close to the vest. Let the seller give you a starting price for negotiations. If you think it’s too high you can bargain. If the seller offers a price that’s lower than you think it’s worth, you can accept a good deal.
3. Don’t Negotiate with Yourself
Once you have made your buy or sell price offer, don’t volunteer another price until the other party has responded, either with an acceptance or with a counter-offer. First, you’ll only cheat yourself. Second, you’ll show the other party that you’re too anxious to make a deal and that you can be bargained down easily. You’ll only lose leverage when you “negotiate with yourself.”
4. Silence is Golden
This is a corollary to “don’t negotiate with yourself.” You’ve made an offer after, I’m sure, giving your best sales pitch. Once the offer is made, there should be nothing more to add. In fact, your silence (with a smile) puts pressure on the other party. It also tells them you’re not desperate to close the deal if you temporarily push the pause button or suspend the negotiation. Give your opposite the chance to speak and learn what’s important to them to strengthen your position.
5. Plan for the Negotiation
Don’t expect to wing it and win. The other party has probably prepared for the negotiation and so would have a huge advantage over you. Things you should plan in advance include: what is your “walk-away point”; what are your and the other party’s alternatives; does the other party have hard priorities that can’t be altered; what is your bottom line; are there time constraints to a deal? These and many other questions should be part of your negotiating plan.
6. Never Accept a Deal Too Quickly
That’s a recipe for raising suspicions. Let’s say your price for the latest widget is $100 but you know you can accept $75. The buyer offers $75, and you immediately say yes. The buyer then starts to question the widget. Is there something defective with it? Was the initial price highly inflated? By jumping on the offering price, did I still overpay? The offer and counter offer isn’t an ending, but the beginning of the negotiation.
7. Be Willing to Walk Away
A winning negotiation isn’t getting a deal. A winning negotiation is getting a deal that everyone’s happy with. Let’s face it. Some people don’t want just a good deal: they want a deal so overwhelmingly favorable to themselves that it’s harmful to you. If you see that’s the case, walk away. Be firm. “Sorry, but I don’t see a way forward” and showing your back as you leave will do one of two things: get the other party to begin negotiating in good faith or kill a deal that you shouldn’t make. Either is better than being pressured into a bad deal.
8. Lighten Up
Negotiations are serious things, but a friendly attitude can go a long way toward putting the other party at ease. Being combative won’t help you as much as seeming reasonable and happy to try to close the deal. Too much tension can make people dig in where compromise would make for an agreeable outcome. But taking a lighter attitude shows that you aren’t desperate to close the deal, making the other party more reasonable.
Is there more to negotiating than these 8 tips? Of course. Will these tips apply in every situation? No. That’s why tip #5, Plan for the Negotiation, is so important. When you do, you’ll know if these tips are relevant or whether you should research other negotiating tactics. Just remember – you’re looking out for yourself and your business, but so is the other person. A mutually beneficial negotiation is always the best.