150 The Financial Times Guide to Business Development
Negotiation skills and tips
Regardless of whether you are buying or selling or seeking to develop some
kind of collaborative joint venture you will, without doubt, nd yourself in
situations where you will need negotiation skills to succeed. Here are a few
tips, traps and observations to bear in mind.
Who goes rst?
This is one of those questions that always comes up, but unfortunately
doesn’t have an absolute denitive answer. The truth is your strategy might
well vary according to the circumstances, how great your desire is to do a
deal, and who you are negotiating with. Nevertheless let me express my
opinion and a recommendation.
I used to recommend the standard approach of trying to get the other
party to go rst, in the hope that by seeing their cards, you could respond
appropriately. Despite the logic of this, my experience indicates that this
will rarely work to your advantage. In truth, I have personally had and wit-
nessed much better results when going rst. Let me explain why.
In real life, most negotiations always tend to revolve around the opening
price or terms and generally end up reasonably close to them. The opening
gure or terms generally seem to lay down a psychological marker and
barrier around which the rest of the discussions take place. It is better for
you to control and x this.
Always try to negotiate
In my experience more things are negotiable than might at rst sight seem
obvious. My advice is always try to negotiate better terms or deals by being
respectful and by asking questions.
In most situations, the worst-case scenario is that your attempt is turned
down and you can revert to the original position.
Negotiation starts before the negotiating!
Most people think of negotiation as the haggling that goes on about the
actual terms and nancial arrangements of a particular transaction.
Remember, however, that before you get to the haggling stage it is most
likely there would have been some ongoing discussions, meetings and
information sharing. Always bear in mind that by asking the right ques-
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Personal performance business development skills 151
tions at this early stage you may be able to gather valuable information
which will be useful to you when it comes to the actual negotiation.
Do your homework
When it comes to negotiating, information is power. Find out as much as
you can about alternatives, options, deals done with other parties, competi-
tors, background circumstances and the people involved.
It is worth the effort and you never know what you might turn up that will
be useful to you later on.
Be willing to walk away
Always decide in advance of any discussion or negotiation at what point
you would cease to feel good and happy with the deal. If you can’t do it
within that range then you should not consider doing it at all.
Negotiate with questions
Instead of bluntly stating your position it can be much more effective to
use questions, using the words ‘if’ and ‘how’. For example:
‘How close are you able to get to X pounds?’
‘If I were to agree to X, how exible can you be with regard to Y?’
Don’t just negotiate in round gures!
It is very curious that the human mind seems to want to think and do
business in round gures. If I open a negotiation at £1,000 and the counter
offer is £800 there is a great psychological temptation to agree to meet in
the middle and settle at £900.
What, however, is wrong with £949 or £873? Don’t throw money away by
thinking only in round gures.
Negotiation is not a contact sport
I have come across some people who can be extremely aggressive and
confrontational in a negotiation and indeed enjoy the process because
of the sense of power and control it gives them. Bear in mind that you
may want to do business with that organisation or individual again and
that, as in every other aspect of business life, word-of-mouth is hugely
important.
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