How to negotiate your way to success

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A table with hands and notebooks to illustrate how to negotiate

The art of negotiation is a key skill in business as in life. Ian Baxter, chairman and founder of Baxter Freight, outlines five moves to make before tabling your opening offer

Negotiation is at the heart of life. It’s so important they should teach it in school. Most days I have to negotiate not just in business, but with my wife, my children and even our dogs. Even so, plenty of people have told me over the years they don’t feel confident enough to conduct a negotiation, especially not an important one.

It’s not always easy – as the famous entrepreneur Viktor Kiam said: “A negotiator should observe everything. You must be part Sherlock Holmes, part Sigmund Freud.” But if you follow these five steps you should at least be able to master the basics.

1. Have options

The principal tool for getting the best deal occurs outside of the negotiation altogether. If you want the best result then you have to be prepared to walk away. If you are selling a product, buying a house or arguing for a pay rise it’s so much easier if you are reconciled to the possibility of failure while also being focused on success. Without a Plan B you’ll never come across as confident and relaxed enough to win the day.

2. Be informed

Research is vital. The more information you have the better things will go. These days the internet has information on almost any subject so there is no excuse for not using it. If other companies pay better salaries or if the nicer house down the street sold for less three months ago, you have to know this and use it to support your position.

3. Plan

It’s no good entering a negotiation just contemplating what you would like to have – you have to anticipate the needs and desires of the other person and what their likely position will be. If you say X they will most likely say Y and so on. If they say Y how are you going to respond?

4. Expect to haggle

Not everyone expects to negotiate about everything. But if you buy a car, a house or take a new job there is often scope to get a better deal. If possible, get your counterparty to make the first move, eg, “I know this is the asking price but what reduction could you offer?” Once they’ve made their first concession try to get them to make the next one as well. As an employer myself I can tell you that I would never think badly of someone trying to negotiate with me. Whether they would succeed is another matter!

5. Ask questions

I like to ask the questions many are too embarrassed to ask. If you have the chance to find out how much they want to do the deal, do it! The more direct the questions, and the more background you can find out, the better. Be careful not to push your counterparty to give you their bottom line – it may not really be their position, yet they may feel bound to defend it. Listen carefully to the answers and study the body language. While some prefer formality, I think it’s better if people want to do a deal with me because they think (correctly!) that I’m a nice guy.

@BaxterFreight

baxterfreight.com

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Director magazine

Director magazine

Director is the magazine for business leaders. Free to IoD members and available to purchase through subscription, each edition is full of insightful interviews with entrepreneurs and company directors.

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