8 Negotiation Strategies Every Entrepreneur Should Know About

If you’re an entrepreneur, you’ll need to have great negotiation strategies to work with. Do you know what the best negotiation strategies are?

With these strategies, you can grow your business faster and start turning that “no” into a “yes,” no matter who you’re working with. Negotiation is key to any business, but it’s especially important as an entrepreneur.

Luckily, you can easily learn the negotiation strategies that will help you grow your business and reach your goals faster. Ready to learn what they are? Keep reading!

1. Set Your Rates

Before you enter negotiations at all, it’s important to set your rates or prices so you know exactly what you’re willing to work with. For example, you might decide on a bottom price for a service. If negotiations bring you below that price, you won’t offer that service to that client.

When it comes to setting your rates, you don’t need to pull numbers out of thin air. Use one of the many available resources to help you. For example, you can research averages for your market, and choose your rates based on experience or location.

Don’t forget to factor in additional costs. As an entrepreneur, you’ll need to pay for taxes, healthcare, a workspace, and much more – all the things that would usually be provided by a traditional employer.

2. Gather Your Information

In addition to setting your rates, there’s some other information you should pull together.

First, you’ll need to be prepared for flexibility in your rates – within reason. Start with a slightly higher rate than what you actually aim to get, so you can negotiate down if the client wants to. And, of course, keep your walk-away number from Step 1 in mind the whole time. Don’t negotiate below what you’re willing to work for.

Sometimes, as an entrepreneur, one of the best negotiation strategies is to work for non-monetary compensation in addition to a lowered rate. If there are certain things you need for your business, this can be a huge help to both you and the client.

If the client can’t provide your monetary ask, for example, you can get value for work exchanged, paid travel, or another worthwhile offer that’s not cash.

3. Use Emotional Expression

No matter how you really feel, you can use emotional expressions to get what you want during negotiations.

Consider what emotions you’re projecting, and what emotions you want to be projecting. For example, if you express positive emotions, your client might view you in a more positive way, and become more willing to agree to your offer.

Emotions are often expressed subconsciously, so you’ll need to become aware and harness the ability to control the emotions you show. Use body language, speech, and facial expressions to convey what you want to show.

Keep in mind that you don’t actually have to feel the emotions you’re showing. With practice, you’ll easily be able to project warmth, friendliness, or even anger, depending on what the situation calls for.

4. Understand the Type of Negotiation

Different types of negotiation call for different negotiation strategies. Do you know how to tell what kind of negotiation you’re working with?

There are two basic types of negotiation you might run into. First is asset negotiation. This kind of negotiation happens only once, and there is usually a clear loser and winner.

This factors in when an item is being sold, for example. There are no long-term effects, so each party is focused only on the deal at hand. These exchanges tend to be aggressive because someone can “lose” while the other person can “win.”

The second kind of negotiation tends to be more complicated. This happens when both parties will be working together going forward, so there is no “nothing to lose” attitude on either side. In these cases, it’s important to work to maintain things like respect and trust, rather than trying to come out “on top.”

5. Avoid Greediness

It’s easy to become greedy in the course of negotiations, but this can hurt you in the long run. When you’re too aggressive or pushy, your chance at a long-term working relationship with that client is damaged, and often can’t be fixed.

This is most important in the second kind of negotiation when you expect to work with that person or business again in the future. However, keep in mind that in any negotiation you might end up working with the same person again, even if you don’t expect it.

Focus on the future success, rather than a “win” in the short run. Don’t overestimate yourself or what you’re selling. Keep negotiations polite and friendly as much as you can.

This is another case where controlling your emotions, and which emotions you show, is valuable. Resist the emotional pull to “win,” and keep in mind that there’s another person at the other end of the conversation.

6. Don’t Gamble Unless You Can Afford to Lose

When negotiating, never put anything on the line that you couldn’t do without.

Keep in mind that the other person can always walk away. If you don’t plan ahead for this possibility, you might be left high and dry.

7. Use Signed Contracts

Even if you’re working with a personal friend or an established client, you should always put things in writing. Signed documents will protect you legally, and they also help ensure that everyone is on the same page.

If the idea of a contract is intimidating, a simple signed Statement of Work can serve the same purpose. This avoids confusion and ensures you have something to refer back to in the case of a disagreement. For example, if an issue goes to court, you’ll have something to base a settlement counter offer on.

8. Don’t Give Things Away

As an entrepreneur, it’s almost always a bad idea to give away work for free. However, keep in mind that many agreements involve a little bit of “pre-work” before payment is made. Show value in these times, but decide where to draw the line on how much work you’ll do before getting paid.

What Are Your Favorite Negotiation Strategies?

All these strategies will help you grow your business. However, some work better in certain situations. With practice, you’ll learn when to apply these strategies for the best results every time.

Which strategies work best for you? Leave a comment and let us know!