The basics of negotiating skills for small business owners.

Negotiation is a vital skill for small business owners—it affects everything from pricing with vendors and service contracts to closing sales and resolving conflicts. Here are the basics of effective negotiation:

1. Prepare Thoroughly

Before any negotiation:

• Know your goals: Be clear on your best outcome, acceptable compromises, and walk-away point.
• Research the other party: Understand their needs, challenges, and decision-making power.
• Know your value: Be ready to articulate the benefits of working with you.

2. Build Rapport

People are more likely to make concessions when they like and trust you:

• Start with small talk to ease into the conversation.
• Find common ground and shared interests.
• Stay friendly and professional.

3. Listen More Than You Talk

• Ask open-ended questions and let them talk.
• Show you’re listening with paraphrasing and summarizing their points.
• Look for hidden motivations or pressures—they give you leverage.

4. Frame Your Offer

• Emphasize benefits and outcomes, not just price or features.
• Use “we” language to build a collaborative tone.
• Be ready to explain how your offer solves a problem for them.

5. Know Your BATNA (Best Alternative To a Negotiated Agreement)

• Understand your fallback options so you don’t accept a bad deal.
• This gives you confidence and clarity on when to walk away.

6. Be Ready to Compromise—Strategically

• Prioritize what matters most to you and where you’re flexible.
• Offer trade-offs (e.g., a lower price for a longer contract).

7. Stay Calm and Patient

• Don’t rush. Time pressure often leads to bad deals.
• Keep emotions in check—even if the other party doesn’t.

8. Put Everything in Writing

• Once you reach an agreement, summarize the terms in writing to avoid confusion or disputes.

Practical Tip for Small Business Owners:

Use role-playing with a trusted colleague to practice negotiating common scenarios like:

• Vendor pricing
• Client contracts
• Partnership terms