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Q What tips do you have for negotiating with business partners?

Mike Williams

Expert: Mike Williams

A Many of us feel uneasy when we have to negotiate for an organization. Typically that is because bargaining is seen as a win-lose situation in which someone - and you don't want it to be you - is going to come out on the short end of a contentious confrontation.

It doesn't have to be that way. We reach informal agreements every day without feeling like losers or winners and without anyone yelling. Friends decide where to eat lunch. A couple works out what color to paint a room. Co-workers shuffle conflicting meeting schedules.

Business negotiations are more formal, have higher stakes, and typically involve people who are relative strangers, at least in the beginning. But success in a business negotiation involves the same things we do instinctively in our personal lives. Taking the time to understand both sides, actively looking for cooperative solutions, and effectively communicating can pay huge dividends.

The basic approach:

  1. Gather Information. Before sitting down to talk, you should know as much as you can about what the other side wants and why. How do they do business? What's important to them? Information-gathering should continue during the negotiation as well. Ask questions. Lots of them.
  2. Know Thyself. Develop a deep knowledge of what your organization wants, of how it operates, of its strengths and weaknesses. Having a clear idea of your organization's value points and of why it works the way it does makes it easier to identify the minimum terms that will make a good deal.
  3. Build Relationships. Formal positions alone do not usually create agreement. Understanding each other and establishing trust is essential in working out any deal.
  4. Be Open to Wider Solutions. Money usually is everyone's top concern but it is not the only factor that gets a good deal done.
  5. Communicate Effectively. Your research has identified what will be best for your organization and why, and also why certain terms will be acceptable (or better, very positive) for the other side. Now you have to communicate that in a compelling way. Tell a good story, and make sure it is understood.
  6. Be Honest. Believing what you say helps your communication and builds that essential element - trust.
  7. Don't Rush. Companies in a hurry seldom get the best terms. If you feel you have to get something signed by next Tuesday, you are giving up critical leverage. Time should be your friend in putting together a good deal.
  8. Be Willing to Walk. This is not the same as demanding "my way or the highway" and it should seldom - if ever - be delivered as an ultimatum. Your basic assumption always is that an agreement is possible. But if you stay focused on your organization's bottom-line needs, you should be prepared to say "no." It sounds obvious that a deal should not be done if it does not make sense but in practice that simple truth can get lost in the heat of talks.

Mike Williams is a former journalist with more than 10 years experience leading channel management teams and negotiating agreements that generated more than $150 million in revenue for software technology companies. He currently is a consultant in contract negotiation.

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