You have your business going, started a bank account, got some clients enough to start and maybe already have an office. Your business plan is written and implemented, the first customers are coming in and everything seems to be going pretty much fine.
Then you start to think about expanding or growing. You need to sit before your bank manager to ask for a loan or with big partner that might make or break your future success to negotiate terms. At this moment, 90% of entrepreneurs fail miserably.
Because to negotiate, there are several lessons in dynamic of power that need to be taken into consideration. If you search online, there will be several tips focusing on body language, tone of voice, organisation, knowing what you want etcetera. I’m going to start by the assumption that to get to this point you already learnt the basic of the aforementioned.
The main lesson about negotiations is the understanding that negotiation is purely communication. The one who communicates better, wins.
Every person is singular (and most of the marketeers want to kill me when I say that, because of the tendency of grouping people into meta-people), and to talk to them it is important to understand them. Communication is related to efficiency. The more assertive it is what you say, the big are the chances to win a negotiation, thus the first lesson:
1) The reason, the real reason.
Every negotiation has a reason. One of the parts needs the other the most, and failures happen when one of the parts underestimate/overestimate each other and/or itself. Be aware of what you really bring to the table, in practical terms and play that around. With that, you need to:
Values is another concept full of cliches. Values are the internal, brute and fixed concepts for what makes a difference to me. It has to do with relating to the other. Every person has a small set of values that defines their existence, that they bring into consideration during a decision-making process. For example: a self-made man from a small village probably considers highly industry and hard-work, much more than a person born in privilege in a big city. Once you can match your values - your set of humanity criteria for decisions - with the one from the person sitting opposite to you, then you hit gold. The negotiation is not yet won, but the critical aspect of the conversation is demolished, all you need is to have a good story:
With the full attention of the person sitting at the other side of the table, it is important to identify the why the person is sitting there. Because of the first bonding moment this will be easier because the other person is already in more relaxed mental mode. The ‘’why’’ is always the most important part of this communication. Every single negotiation has a why and this why is the solution to a problem. This why is the why you are sitting there. The best negotiator is the one with the ready solution to this why, the one who can understand the struggle of the other side and come before asked with the perfect solution, and the better the solution and more attuned to the values, the biggest win it will be. To find out the why think on a problem-benefit pattern. Every negotiation revolves around a problem-benefit pattern. The problem is directly related to the why, and the benefit is every single action that can be used to resolve this issues. This dynamic is universal to all negotiations and once a person can set this pattern into a determined context, what to say and how to present a proposal becomes as clear as water.
One question must be very well thought of, though:
4 Change someone’s life
The benefits are the set of actions you can take that will bring value back to the other side. It is the practical answer to the why and has a big intersection with the values of the other person.
However, when a set of benefits is presented in a negotiation, there is a golden rule to follow, which is: ‘Is what I am presenting going to change this person’s life?’. Any negotiation that has this question in its core will win.
Finding a way to perform and/or present the list of benefits with the purpose of changing for good the life of the other person, or at least as much as the scope of the meeting allows will bring joy, commitment and utter respect for your side.
And last, but not least:
5) The Upper Hand
During any negotiation be sure to walk aways into a room with the Upper Hand. This concept means basically that all the factors of the negotiation must be stronger from your side. This can be done matter-of-factually simply through accumulation of resources or by a kick-ass presentation and charm. At the end it all comes down to whom has more power in the relation. And this does not mean money, strength or influence. Scarcity, passion and experience count very much nowadays and it all comes down to how you articulate your resources into what you really want.
Like Sun Tzu states at The Art of War:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”