Let us never negotiate out of fear. But let us never fear to negotiate. — John F. Kennedy
It’s true: life isn’t fair. Often, one person or company pays less than another for the same goods from the same vendor. The reason is simple: Negotiation. The party that paid less for something often negotiated better or dared to negotiate when the other did not.
Even though most of us aren’t aware of it, we are surrounded by opportunities to negotiate, sometimes even daily. Even if you don’t have kids, you may recall negotiating with your parents for more time on the TV or a certain dessert. Or, you offered to do an extra chore at home so your mom would buy you a treat or some sugar cereal at the grocery store. Negotiating seems to come almost naturally to us when we are kids. Sadly, many of us abandon negotiation when we are adults even though the stakes are much higher.
When it comes to price, you often have more opportunities to negotiate than you realize. While you may know that bantering over price is standard when buying a car, did you know that you can often negotiate a lower hotel rate when traveling? When hotels aren’t fully booked and you’re in a city with other hotel options, many hoteliers are more than willing to lower their room rate if you just ask. Outside the US, haggling over price happens almost daily when buying fresh produce or small consumer items.
Of course, you often need to negotiate on larger and more important issues than a hotel room or a head of lettuce. When you start and run your own business, you will constantly need to maximize your revenue and your resources. For instance, when choosing a vendor to supply you necessary goods or services, you can give yourself extra leverage when you enter into negotiations knowing that you will be a repeat customer. Many vendors give volume discounts or discounts to repeat customers. When the vendor can’t discount the price, you still have the option of asking for extra services or goods to be added. There is almost always something that the person or company you’re negotiating with can do to sweeten the deal for you that won’t cost them anything.
Much has been preached about win-win and you should never negotiate so hard that the person or business you have struck a deal with comes away feeling cheated. At the same time, however, you need to protect your own interests and make sure that the deal you’re agreeing to is good for you. Sometimes, knowing when to walk away from a negotiation is just as important as knowing how to negotiate.
Negotiating is as much art as science, and half the battle is planning ahead and being aware that you’re entering into a negotiation. Consider preparing for a critical negotiation by reading books on negotiating and practicing role playing with an associate.
In the end, just remember that you will almost always get more when you dare to negotiate.
Derek Rundell, is a successful business leader, operator, and serial entrepreneur. Derek has founded, managed and sold businesses in the technology, media and finance industries. He sits on several boards and serves as an advisor/investor to numerous established businesses and startups. Startups are Derek’s real passion, and in addition to building his own portfolio of technology, media and financial ventures, he invests in and mentors startups and entrepreneurs. He is passionate about sharing his knowledge and helping other businesses succeed.