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I have over 35 years of business experience and have worked across four continents and completed numerous transactions in the real estate, finance, and technology sectors. Some were easy to close, most were not, and a few were nearly impossible. But in each case, both sides signed on the dotted line, and that’s what matters.
After all, business is negotiation. If you are a bad negotiator, your company’s half-life may be short. But even if that’s not your strength right now, don’t give up just yet. Good negotiation can be learned.
Yes, it requires a complex skill set that can’t be learned in an afternoon, but with time, experience, and trial and error, improvement is almost inevitable. I participate in all types of business negotiations and have developed a shortlist of the best negotiation tactics and techniques over the years.
Related: Games, Sets and Matches: The Art of Negotiation
R&P: Research and preparation
First, and perhaps most importantly, preparation. Participating in a negotiation is similar to participating in a battle, and no general has ever won without evaluating his and his enemy’s capabilities, the terrain, the situation, and other factors. Similarly, it is foolish for a negotiator to enter into a negotiation without knowing his own strengths and weaknesses, as well as the strengths and weaknesses of his opponent, so it is important to do research and preparation.
Be clear about your objectives and red lines, and try to guess as best you can what your interlocutor will and will not accept. Dig into the background of potential partners and research the companies involved. What is their financial situation? Are there any major obstacles or impending events? Are they looking for something other than money? As a final preparatory step, put together a great opening offer that can close negotiations as soon as they begin.
Build trust and listen
If you have enough knowledge, you can jump right in. Start by establishing the actual connection. Even if you don’t reach an agreement right away, communication during negotiations needs to be clear and candid to move forward, so start with a warm hello to build a solid foundation. Speak clearly at the beginning to give your potential partner trust that you are negotiating in good faith, without deception or hidden agendas.
Let’s listen. Put your goals on the back burner and focus on asking useful questions and fully understanding the answers. What elements do they focus on? Are there any that are absolutely necessary? What should they avoid?
Listening shows respect and interest, but be prepared to answer questions as well. Still, the more the interlocutors talk, the more they show their hands. Remember that the words they don’t use may convey just as much as the words they use.
Related: 5 Negotiation Don’ts to Avoid
assert your position
As you get deeper into negotiations, being tough can be helpful. Few businessmen want a partner who doesn’t want to take a stand or who avoids disagreements. Of course, you don’t want to make things complicated or unpleasant, but you’re in a battle, and you’ll need to be assertive and stand your ground in order to get a favorable deal.
One place where this is most true is Tel Aviv. A few years ago, I was a bit surprised by the abundance of opportunities in the Israeli business environment, especially when it comes to technology, an area I focus on at my private equity firm Anfield Limited. Israel, with a population of just 8 million, has founded more than 100 Nasdaq-listed companies than all of Europe.
The high-tech industry accounts for more than a fifth of GDP, and the World Economic Forum ranks Israel as the second most innovative country in the world. Top chipmaker Intel recently made its largest-ever global commitment to Israel. That’s $25 billion for factories in the South. However, Israeli businessmen tend to be sharp and non-negotiable, so be sure to bring your best if you go. This means that if the deal goes through, you’ve likely made a wise investment.
Returning to tactics, if both sides have made initial offers and counteroffers with little progress, it’s time to step outside the box and look at the problem from a new angle. What didn’t you think? What might you add or remove from the table to make your trade better? Take a break, go for a walk, talk to a smart friend, or get a good night’s sleep. Changing your perspective often brings new light.
It’s getting late
Finally, the last arrow in my quiver is a parting tip. Setting hard deadlines is unwise. Because that’s dishonest and most potential partners are likely to see through it. But giving them a sense that their patience is running thin and that they’re prepared to walk away if the deal they envisioned doesn’t materialize can be a real game-changer.
Of course, the smart thing to do is to play the long game. Regardless of the fate of this deal, it’s about patiently negotiating and building relationships. But sometimes applying pressure can have surprising effects. Just choose your words carefully. King Solomon said: “Words properly spoken are like apples of gold set against a silver background.”
Related Article: 10 Tips to Negotiate Like a Boss
make a deal
If all of the above fails and you don’t want to go home empty-handed, there is one last resort. It’s about letting your opponent win. Some people call it caving. However, we have found that in many cases, even deals that may not be financially great for your business in the short term end up being profitable in the future.
The business leader you just signed is not a dummy. She knows you did something solid for her. And if she understands business, she’s more likely to reciprocate you in the future. After all, negotiation is about building relationships.
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