The negotiation process

Negotiation – to arrange for or bring about through conference, discussion, and compromise. 

At least that is how Webster defines the term. I prefer to describe the term as “the art of two people protecting their own interests while awkwardly attempting to not step on the other party’s toes.”

Negotiation can be fun, but it usually isn’t – especially, when it is with friends.  As a startup company, most of our contacts come through friends and relatives.  This can cause some discomfort when trying to agree on services and prices.  Our company prides itself on providing value-add to every customer.  And we always will.  Our goal is to treat every customer fairly and produce a solution that will leave them satisfied.  But when it comes to dealing with friends we find ourselves being extra sensitive during the negotiation process.  It is as if all of the rules of negotiation go out the window and you are left begging for the process to end and wishing either you didn’t know this person because either a ) you could play hard ball with them or b) you could just walk away.

The first rule of negotiation is “never accept the first offer.”  This can be as much for the other party’s pride as it can be for you getting the best deal. Think about it, if you come to me and say you will give you $10,000 for that car, and I immediately accept, aren’t you going to be left thinking, “I could have got the car for less, why didn’t I start lower?”  So, instead I should always come back with something higher than $10,000, even if it is only by a small amount.  This lets you know that you are in my ballpark and not starting off too high.

The second rule of negotiation is “don’t get the shaft.”  Basically, this means don’t be the guy who walks away thinking, “Oh, crap, what did I just agree to!”  Make sure you are fair with yourself as well as your counterpart.

The next rule of negotiation is the golden rule – “always be prepared to walk away and say no.” There is always an alternative offer out there and you never need something so bad as to violate rule #2

A few other rules to try to follow

– Try to avoid making the first offer.

– Be comfortable with silence.

– Never disclose your bottom line.

– Learn all you can about the other party.

– Don’t negotiate with yourself.

These rules are simply guidelines and everyone should follow a framework that makes them comfortable.  It is a difficult thing to come to a mutually beneficial agreement.  The real problem is that neither side wants to feel like it lost.  Let’s face it; one side always loses, at least by a little. Hopefully, both sides at least feel like they are better off than they were before they closed the deal.  That should be the goal of any negotiation.

Oh, and as I said before, when negotiating with friends, none of this applies. Just be prepared for a painfully awkward moment or two.