Business negotiations can be extremely tricky to navigate. Most people will tell you that negotiation is an art, and acing is a matter of pure talent. However, several studies have shown that almost all soft skills can be learned. This includes the art of negotiation. With some tactics and tips, anyone can understand how negotiations should be done. But, love it or not, negotiations are essential for any business meeting. Without negotiation, no business meeting will conclude, nor will a business contract be drafted.
Don’t get us wrong; you can conclude business meetings without negotiations, but you will get nothing worthwhile. Without business negotiation strategies, the point of any business meeting is wasted, and there’s no point in doing the business contract negotiation in the first place. Several books have been written about negotiation, and we compiled a list of the some of the best and most useful tactics
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Do Your Research
This is probably the most important of any contract negotiation strategies. Whenever you go for any negotiations, you need to go entirely prepared. A negotiation isn’t something that happens on the spur of the moment. You need to understand the buyer fully before going to negotiate with him. It would be best if you found out everything you can about him. This isn’t for the sake of manipulation or blackmail. This isn’t a Breaking Bad scenario where you blackmail someone for a house. The reason you need to find out more about the buyer is to understand what his intentions for buying are. When you know why he wants to purchase it, there is a good chance you can have a higher position over him. That leverage is essential to get the upper hand in the negotiation.
You need to understand the other party’s business thoroughly. One way to do this is by reviewing their website. The websites usually offer most of the knowledge that you need about them. In a spirit to make themselves and make themselves appealing, they could upload information like press releases, quotations, articles written about them, or any other accolades. To achieve this, you could search them up on Google or LinkedIn as well. You also need to understand what other similar contracts they have entered into their business. While the details of those contracts might not be known, it is easier to determine the basics of the terms from the details of the releases. They might have details with SEC too(1).
Use a Give-Take Approach
Negotiations are always about reaching a compromise. You can’t hog everything and refuse to budge. There is a good chance that the entire negotiation could fall apart, and you won’t have anything left. Before you go into a negotiation, you need to understand what points you are willing to concede during the negotiation. The simplest way to do this is by judging what’s most important to you in any negotiation. Once you’ve identified what points you can’t do without, you’ll know what points you wouldn’t mind conceding on for the contract. It would help if you ideally didn’t keep everything as necessary. That wouldn’t do you any good. Every contract has elements that are important to you and those that you wouldn’t mind foregoing. The easiest way to get what you want is by forgoing on those things. If the other party is playing hard to get on specific issues, try to understand why they are doing that. Questions open up the discussion, while arguments often close communication.
It would help if you made the other side feel that they’ve gotten something valuable from the negotiation. It is a risky strategy, but if you do it well, there’s a high chance you can successfully pull this off. So how do you do it? You try to sell it. Play hardball on things you don’t mind so that when you have to give up something you want, you can always get them back with the give-take approach.
Break the Negotiation into Parts
You can’t think of the entire contract as one item. Every contract must have discrete segments. This allows you to understand what elements tie in what. The benefit of this is you can identify why you want a particular contract. Beyond that, everything else is just adding to what is already there. One other advantage of splitting a negotiation into parts is that it will help you in the give-take process. If you know what parts of the negotiation exist, you can be better positioned to haggle for your claim.
Negotiations disintegrate because the parties take an “all or nothing” approach. A great way past this type of roadblock is to break the negotiations into sections. The best negotiators tend to be those who truly listen to the other side and understand their key issues. Try to gain an understanding of what is essential to the other side.
When negotiating any contracts, it is vital to have in place agreements that can cement your agreement. Having a good agreement is essential because you will put everything down in writing so that neither party can renege on the contractual obligations.