You are currently viewing Negotiation For The Small Business Owner

Negotiation For The Small Business Owner

If you own a small business, you may negotiate all the time. If you’re not, maybe you should. You may be able to cut your costs and increase your income as an International litigation lawyer can explain. You could resolve disagreements before they become conflicts or lawsuits. Negotiation isn’t an exercise in imposing your will. It’s about empathy, making compromises, and being smart.

What Is Negotiation?

There are many ways to define it, according to the Harvard Law School’s Program on Negotiation, including the following:

  • Communications designed to reach an agreement when the parties have shared and opposing interests
  • An interpersonal decision-making process that’s necessary when someone can’t achieve their objectives by themselves
  • Negotiations occur when two or more parties must reach a joint decision, but they have different preferences

Negotiations can include the amount your supplier will charge you, the cost of your office rent, or the resolution of a lawsuit that threatens your business.

How Can Negotiations Be Successful?

According to Focus Law LA, these elements are part of negotiating:

  • The parties’ interests drive negotiation. They can be widely known or hidden, but they guide our actions and words. Negotiators need to fully understand their own interests and prioritize them while discovering the other party’s explicit and hidden interests
  • The desire for a legitimate, fair, deal should drive negotiation decisions. Unless you lack leverage, if you feel the other party is cheating you, you’ll probably reject their offer, even if it’s objectively beneficial
  • The parties have a relationship. It may be fleeting and temporary, deep and long-term, or somewhere in between. The relationship must be managed during negotiations. You shouldn’t “burn bridges” and end a fruitful relationship unless necessary. By building rapport and negotiating ethically, you can keep a relationship going during and after negotiating a resolution
  • Though there are benefits to negotiation, be aware of and evaluate alternatives. Is the other party so unrealistic that litigation may be a cheaper resolution? What is your best alternative to a negotiated settlement (BATNA), and how does that compare with what you’re being offered?
  • What are your options? What can you offer, and what are you willing to accept? What can satisfy both parties’ interests, including contingencies, conditions, and trades? Creativity can be critical to successful negotiations. The parties must creatively discuss other possibilities if the obvious choices aren’t acceptable. You’re both trying to resolve a common problem. Toss ideas back and forth. One thing might lead to another 
  • The success of negotiations is influenced heavily by your communication choices and style. You could be threatening or submissive. You could brainstorm jointly or make demands. Assume what’s motivating the other party or ask questions to find out. Disrespectful communications that belittle or ignore the other party’s goals or needs will get you nowhere. Someone who feels insulted will probably escalate the conflict, not resolve it
  • Successful negotiations involve commitments. They start with an agreement to negotiate, followed by one on where, when, and how. If there are multiple conflicts, negotiating commitments to resolve the less complex ones should build momentum toward tackling the more difficult ones. Ideally, both parties will commit to conditions that will resolve the conflict between them

If you’re not good at negotiations or aren’t comfortable with it, contact your attorney, who may be better equipped than you to negotiate a positive outcome for you.