4 negotiation skills techniques for young entrepreneurs that will reach win-win solutions with business partners 🤝
You're a young entrepreneur, fueled by ambition and ready to make your mark in the business world.
As you step into the meeting room, you're about to negotiate a game-changing deal that could skyrocket your startup to success. The pressure is on, and every word you choose will shape the outcome of this pivotal moment.
These 4 techniques will improve your negotiation skills and prepare you to meet with business partners.
Case study: negotiate for a better deal
Imagine you're a young entrepreneur with a brilliant idea for a tech startup. You've already developed a prototype for your wearable tech product but lack the necessary funds to launch it into the market.
You decide to seek investment from an angel investor who can provide not only financial resources but also expertise and industry connections.
As an angel investor, Mark is an experienced entrepreneur who has successfully built and sold several technology companies. He is actively involved in the startup ecosystem and is constantly seeking promising ventures to invest in.
Mark is not only interested in financial returns but also in supporting innovative ideas and helping young entrepreneurs succeed.
How can you use the 4 techniques to negotiate a better deal with Mark?
1. Separate People from the Problem
To separate the people from the problem during negotiations, remember these key points:
Different perspectives: Each party has their view of the issues. Recognize and understand that people may see things differently.
Control your emotions: Don't allow your emotions to drive your decision-making process. Stay calm and rational.
Effective communication: Improve communication and listening skills. Listen actively, ask questions for clarity, and express thoughts clearly. Good communication helps build understanding and find solutions.
During negotiations, focus on building a strong relationship with Mark based on trust and understanding. Listen actively to his concerns and interests.
Mark may be concerned with the risk associated with the startup. You should clarify and address the concerns that he may have, for example, about the business model or market competition. This is crucial to gain his confidence and secure the funds.
2. Focus on Interests, not Positions
People often state their positions (the specific solutions they want). However, behind those positions are their real interests, which are the fundamental needs, desires, and concerns motivating their positions.
Shifting your focus from positions to interests allows you to uncover shared interests and explore creative solutions that address both parties' needs.
Highlight the potential market impact of how your wearable tech product can address a significant pain point in the healthcare industry.
Showcase the unique value proposition, for instance, the machine learning capabilities of your product.
Emphasize how it aligns with Mark's interests in supporting ventures that leverage technology and bring innovation to traditional industries.
3. Provide Options for Mutual Gain
If I have only one solution or a fixed set of options for you, are you going to accept them? Don't assume the other side will accept them either.
By expanding the options available, you increase the chance of having mutually beneficial agreements.
Brainstorm potential collaboration opportunities beyond financial investment that can benefit both parties.
Discuss how Mark's expertise, industry connections, and mentorship can contribute to the success of your startup:
Be an active advisor or board member?
Guide product development?
Introduce strategic partners?
Emphasize the long-term value that his involvement can bring.
4. Use Objective Criteria
Negotiations can sometimes become subjective and driven by personal opinions or power dynamics. It will be helpful if we ground the negotiation process in fair and objective standards.
Objective criteria can include:
Present comprehensive data and demonstrate a thorough understanding of the market landscape.
Discuss potential milestones and key performance indicators (e.g. revenue growth, customer acquisition cost, market share, return on investment, etc.) that can be used to measure progress and determine the success of the investment.
Quiz: The Bakery
You're about to start a small bakery business. To ensure the success of your venture, you need a reliable supplier for high-quality ingredients at a competitive cost.
You decide to negotiate a partnership with Tiffany Supplier, a reputable company known for its quality ingredients.
In negotiating a partnership with Tiffany Supplier, you aim to secure a long-term partnership with favorable terms and maintain profitability for your bakery business.
Question: Which negotiation skills approaches could you use to achieve a mutually beneficial agreement? You can choose more than one approach.
A. Offer to collaborate on product development to create exclusive ingredient formulations.
B. Negotiate flexible payment terms that align with the bakery business's cash flow.
C. Explore joint marketing efforts to increase brand exposure for both parties.
D. Request discounted prices for a limited trial period to assess ingredient quality.
Which approaches could you use to achieve a mutually beneficial agreement?
Negotiation is not just about securing a deal — it's about fostering mutually beneficial partnerships. By considering the 4 negotiation skills techniques, you can negotiate more effectively.