Smart Negotiations Have Two Winners
Do you get what you're worth when you negotiate?
Like most other business skills, negotiations are a learned art. The problem is, many small business owners haven't taken the time to learn how to negotiate deftly - instead preferring not to haggle over price and get right to the work.
Good small business owners will find they have strengths in their negotiations - if they know where to look. Former secretary of state Henry Kissinger once said, "Effectiveness at the bargaining table depends on your ability to overstate your initial demands."
Whether it's a higher fee, more project control, more perks or some other task-related benefit, inflated demands can boost your take-away, as well as prevent deadlock and provide the client a chance to feel they've won if they negotiate you down.
"Your power in a negotiation depends on the options that the other side thinks you have," says Roger Dawson, author of "Secrets of Power Negotiating" (Career Press, $24.99). "Get what you want in a negotiation, but always let them think they're getting what they want. It's a very simple principle, but it's the basis of all negotiations."
Information also is essential to all savvy negotiations. Good negotiators go to the table with information about the potential client, their organization's needs for the project, and the job at hand. Before meeting with a potential client, talk about the project. Surf the Web site. If possible, meet with others in the organization to learn more about the work.
Here's six more tips to getting more money or just being stronger at the negotiation table:
- Respect and know thy self. Believe in yourself as a professional who delivers quality work, and you will exude that self-esteem in client negotiations.
- Heading to the negotiating table, have two figures in mind: Your "min-max." What's your asking price (your max), and what is your absolute bottomline (your min). The latter will help you stand your ground if your prospective client tries to low-ball you, and the difference between the two will make the client feel they've won by paying less than your asking price. Also, know the market rate for your industry. This way, you won't price yourself out of a job, or ask a ridiculously low number - and leave the impression you're an amateur.
- Learn the game. Negotiations are like poker: part deception, part bluff. Learn to play your hand, and balk or flinch if a client proposes a fee that's less than you expected. Silence implies acceptance.
- Run it by "your people." If you're not sure about an offer, tell your negotiating partner you have to present it to your people - even if you work alone. Deferring to your "staff" or "reverent power" makes it appear the decision is not in your hands and buys time to consider the offer.
- Don't fall in love with the project. Something may seem like a cool gig, but if you're unwilling to walk - or you show unbridled enthusiasm - you might end up sacrificing your fee to get the work. "The minute you're not prepared to walk away you lose the power in the negotiations," Dawson says.
- What's the back-end potential? Some jobs bring more than money. You might open doors to more work, new contacts or greater exposure for your business or work.
"Let us never negotiate out of fear," President John F. Kennedy said during his inaugural address in 1961. "But let us never fear to negotiate."
Copyright © 1998-2005 Jeffery D. Zbar Inc. (dba ChiefHomeOfficer.com and Goin' SOHO!).
