Negotiating and closing a business deal successfully is a must-have skill for all startup entrepreneurs. Hardly ever is it something you will learn as part of any school curriculum. Yet, your startup will need hundreds, if not thousands, of business negotiations that you have to close down successfully.
To some startup owners, it comes naturally, whereas most of us have to put a lot of effort into it, professionalism, and a lot more. Whether you are negotiating for the best price for securing office furniture or a bigger deal that has the potential to take your startup to the next level, the following negotiation strategies can help you close a business deal for your startup.
10 Negotiation Techniques for Closing Business Deals for Your Startup
1. Always Be Prepared
Identify what you want out of the arrangement before approaching a potential client or business associate. Always make sure you understand your startup’s goals and objectives beforehand.
It would be best if you gained as much understanding about the other party’s business background and personality. Review their websites and any bio or LinkedIn profile.
Analyze any similar deals that were closed down by the other party. You will learn of their needs, strengths, and weaknesses. The more information you have, the more able you can overcome any roadblocks that might materialize out of nowhere.
2. Build Up Your Listening Skills
The best negotiators listen to what the other side offers while remaining quiet, formulating an appropriate response. However, this doesn’t suggest you stay passive. Desist from talking too much or wanting to control the conversation. Sit tight and allow the other side to go first. Find out what’s important to them, their limitations and if they are flexible. Gain valuable information you can use to your startup’s benefit and advantage.
3. Drop Your Ego
Nobody will want to close deals with a problematic and egocentric individual. You ought to have all the confidence and assurance, but you also have to leave behind your ego. The best approach is to go in feeling as neutral as you can. It doesn’t matter how stressful the business negotiations’ atmosphere turns; never let your emotions run the show. Dropping your ego will free you to think objectively during intense bargaining.
Additionally, even after closing the business deal, the secret is making the other party feel like they came up with the final agreement.
4. Use Time To Your Advantage
Timing can significantly influence the result of a negotiation. The following are key considerations on how the time will impact a closing deal for your startup:
- The right time to make the deal.
- What happens as times go by – For instance, you will want to know whether your power over a deal increases or decreases as time goes by.
- The correct sequence of topics. You have to decide what matters to address first or early or at the end of negotiations.
- The right time for offers, counteroffers, and the right time to propose the closing deal.
- The right time to request a time out.
Beware of when time is on your side and when time could be your enemy.
5. Be Willing To Walk Away
You have to set a mindset that you will walk away if the deal’s terms don’t suit your objectives and goals. Again, staying neutral is critical. However, you should walk away if the terms aren’t up to your liking. Always believe that by this deal not going through, you aren’t losing an opportunity. Instead, you will be keeping that space open, so when a more favorable chance presents itself, you can grab it.
6. Never Settle For The First Offer
The majority of the other negotiating parties expect a counteroffer to their initial offer. If you probably accept the first offer, there is a chance the other party will feel that they offered too much, ending up with business remorse and attempting to get out of the deal. Counteroffers will most probably lead to the two parties coming to a consensus that they struck the best deal.
7. Involve A Third Party
Some business deals for your startup might be vast and complicated. You will want to bring in an expert on your side to help in the negotiations and drafting of the contract.
Sometimes, negotiations get held up because both parties are reluctant to put their best offers on the table. In this case, you might consider signing up a trusted, neutral party. Your startup and the other party can hold private meetings with the third party, who will determine if a deal can work.
8. Ask The Right Questions
Don’t be shy to ask questions that will get you the information you need to improve or close the business deal. Asking good questions will give you an upper hand and could get the other party to collaborate. It all depends on the type of startup you are running but check out some of these questions:
- Is this the best pricing or offer you can offer me?
- How does our startup benefit you?
- Who are your competitors?
- How much more will this cost if we chose the additional features?
9. Don’t Get Caught Up With Their Problems
Most negotiations have a party spilling out their problems and the reason they can’t meet your demands. Don’t allow the other party to ‘guilty trap’ you into their problems. Deal with each issue as it comes and try to solve them.
10. Close With Confirmation
At the end of the business deal, ask for the sale or get the signature. Do not leave behind loose ends. Follow up with relevant emails and letters. You might also want to explore the possibility of a contingent contract.
The ability to negotiate well is one of the most crucial hallmarks your startup will need to be a story of success. Take your time to develop your negotiation strategies. If you can manage to close a business deal that makes sense, you have set the stage for the final handshake. If otherwise, don’t coy from walking away.