back to published articles
skills are critical to the success of an entrepreneur. How many times
have you been in one or more of the following situations? You need to
answer an employee who has asked for a salary increase; your primary
supplier want to double his rates; or you are seeking financing and
the banker is offering very little money for a substantial part of your
The stakes may
be different in each case, but the common thread running through them
is the need for negotiation skills. Negotiating is an activity that
all entrepreneurs engage in to some degree, perhaps dozens of times
takes place informally: on the telephone, at a quickly called meeting,
or during an impromptu conversation with someone in the hallway. Sometimes
negotiation can take place abruptly, when you are least prepared, and
be concluded in a matter of seconds.
Regardless of the
form negotiation takes, it is very important to have a well-developed
set of negotiation skills in order to run your business successfully.
Even if you feel you already have a talent for negotiating, there are
always ways to develop and continuously improve your negotiation skills.
To develop these
skills and use them effectively, you must know:
- what negotiation
means and the various forms it can take;
- that negotiating,
in the fullest sense, means forging long-term relationships;
- the role that
the individual personalities play in negotiating; and
- that you must
take a variety of approaches to negotiation, since no single set of
principles will suffice in all circumstances.
means. Most people, when they think of negotiation, have in mind those
rare occasions when people sit at a table and hold intense discussions
in some formal way. The major difference between this type of negotiation
as compared to other types is the need for planning. Just like in any
formal process, negotiation planning is a much more structured process.
In these situations, it is important to:
- develop an agenda
for use in guiding the meeting;
- define issues,
alternatives, and what's in it for them/us;
- have available
an alternate type of contract if impasse is reached; and
- have knowledge
of the party you are negotiating with.
However, it is important
to note that this type of negotiation is often the exception, not the
rule. Most negotiations you will participate in will involve day-to-day
operations of your business and will focus more on building long-term
relationships than on making a deal. To increase your negotiation skills,
you need to increase your awareness of what you are doing, and learn
to use both your intellect as well as your intuition during the negotiation
The best way to
approach negotiation is to be wisely cooperative. That is, look for
areas of agreement that can benefit both sides. Of course, it is important
to protect your own interests in such a way that you feel satisfied
with the outcome of the negotiation.
long-term relationships. Good negotiators are the people who understand
how to build key relationships, how to identify what people need, how
to give them what they need and how to get what they want in return,
all in a way that seems effortless.
Try to refrain
from viewing negotiation as a competitive endeavor in which you have
to make a killing in order to emerge the "winner."
is best viewed as a stepping stone to forming relationships - with others
in their own company, and with customers, suppliers and others - that
have long-term consequences for your company. In this sense, negotiation
never really ends. One piece of negotiation is often the beginning of
the next phase of negotiation.
individual personalities. Broadly speaking, when it comes to negotiating,
there are two personality types, and the characteristics of these types
can affect the way they negotiate.
typically hold the view that they are going to get what they want, because
their perceived authority precludes the need to negotiate. These negotiators
do not realize that they engage in a kind of one-sided negotiation that
can antagonize others, with the result that the tasks they wish to see
completed may be carried out improperly or not at all.
This type of negotiator
must learn to be more collaborative. Autocratic negotiators have a tendency
to miss seeing the big picture. When these types of negotiators fail
to negotiate effectively, the results of their efforts often suffer.
While autocratic types may believe they are skilled negotiators, they
often are not because they lack the ability to listen and to empathize.
The second personality
type is the accommodating negotiator. These people are more concerned
with what others want than with their own needs. In order to avoid conflict,
they do not negotiate at all and often end up overriding their own interests.
Since negotiation often implies conflict (something these types of negotiators
avoid at all costs), it is critical for them to take responsibility
for forcing a certain amount of compromise. This is the only way they
will be able to lead others effectively.
If, after becoming
aware of your personal strengths and weaknesses as a negotiators , you
find that you do not feel comfortable negotiating in certain circumstances,
it is probably best for you to have someone else negotiate on your behalf.
variety. It is critical to understand that negotiating cannot be learned
by following a pre-packaged set of principles and applying them to all
situations. That might work if everyone could be counted on to behave
rationally and predictably, but they can't because people are often
emotional and irrational. To negotiate well, you must be prepared to
use a variety of approaches.
The good news is
that like anything else, negotiation gets easier as you do it. With
practice, you will develop your own personal style and become comfortable
with your own limits. As in so many other things in life, experience
is the best teacher when it comes to effective negotiations.
by Stephen T. Furnari
Law | Broker-Dealers | Investment
Advisers | Attorneys | Disclaimer
Resources | Pledge
| Speaker Services | Client
Comments | Contact
11 Broadway | Suite
615 | New York, NY 10004 | +1 212 480 8800
2006 Furnari Scher LLP. All Rights Reserved. Use of this website is
subject to disclaimer.