Question: What is the most important negotiating skill that you have learned as an entrepreneur?
Question by: Robert
Listen to What's (Not) Said
"Few people truly listen to what is being said, because most of the time they're too busy formulating what it is they want to say themselves. You can massively increase your negotiation success if you listen to what's really being said. Also, read between the lines -- the objections, the hurdles, the issues -- and address those, instead of only responding to what you think or assume is being said."
Confidence Is Crucial
"Be confident, and don’t sell yourself short. Your idea represents you, and if your confidence is low, it makes your idea appear weak. That being said, overconfidence has a negative effect, so you need to find a balance between confidence and acknowledging a good deal."
Use Objective Third-Party Criteria
"One of the biggest keys to a successful negotiation is to use objective, third-party criteria to resolve differences with the other party. If you can point to objective third-party sources as the basis for your position, the other party is much more likely to agree to your position."
Never Name the First Price
"When negotiating, never name the first price. Remember, negotiation is all about finding out where the other party is relative to where you are. Setting the first price is like shooting in the dark. If you let them set the first price, you will keep yourself from coming in with a drastically underpriced offer. I'm always surprised how common this mistake is among fledging entrepreneurs."
Create a Win-Win Relationship
"The most important thing to do when you're negotiating is to make sure you create a win-win relationship with your client. This way, they don't feel cheated after the deal is done. You want them to think that it was a fair deal and they benefited by it -- if you want to have a long term relationship with them."
Use Silence to Your Advantage
"I use silence when I negotiate and find it is one of the best tools. Often times, your partner will fill the silence with extra information or think you're playing hardball and suddenly drop their price or terms without you even asking. You can learn a lot about a person by how they fill in the silence."
He Who Cares Less, Wins
"This concept is counterintuitive and perhaps even antagonistic to some, but there is a clear advantage to stating what you want on your terms and then emotionally removing yourself from the outcome. Our tendency to “want” creates emotional and clouded judgement. The more something is desired, the more we compromise when it may not be necessary."
Grow the Pie Before Splitting It
"You should never enter a negotiation believing that there is a fixed "pie" to be split, and that one side will win the bigger slice. You and your counterpart will care about different aspects of the negotiation. Listen to the other and understand their priorities, then do your best to defer on those negotiating points that are more critical to your partner."
Ask What They Want First
"In negotiations, I always ask what the other side wants first. I've gone into so many negotiations thinking that I know what the other side wants, and being completely wrong. Always be the first to ask what the other side wants out of the deal, then work your magic to make that happen. Close the deal and go celebrate!"
Don't Be Afraid to Walk Away
"I didn't start making a lot of money until I learned the value of walking away from a deal. If you aren't happy with the money or the terms, walk away. That may sound fundamental, but when you first get started, you're so hungry that you get caught up in bad deals and you miss the good ones!"
Where There's a Will, There's a Way
"Use the word "will" instead of "would" when negotiating. Phrase your sentences and responses as if the partnership you want is already in place. A sentence outlining "what we are going to do for you" sounds a lot more concrete than "what we could do for you." It implies you already have the plan and know how to implement it. Get them talking like the deal is already done, and it will be."
Negotiate on Principles, Not Positions
"The most common positional bargaining that people do is to start at some arbitrary dollar amount, and have your negotiating partner counter-propose another dollar amount, and so forth. That is not a good way to negotiate. Instead, focus on principles. Present research and comparable data to your negotiating partner, agree on the principles, then jointly agree on price."
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC leads #FixYoungAmerica, a solutions-based movement that aims to end youth unemployment and put young Americans back to work.