Essential Negotiation Tips for Entrepreneurs | Tory Burch Foundation

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Essential Negotiation Tips for Entrepreneurs

The keys to making sure you and your collaborators are satisfied.

No matter the industry, small business owners need to be able to negotiate. That’s where our 2019 Fellow Damali Peterman comes in. The seasoned attorney and mediator founded BreakthroughADR to help her clients get the most out of each discussion, without compromising their values. She answered our followers’ questions in an Ask Me Anything on our Instagram, offering key negotiation tips to help women entrepreneurs speak with confidence about what they want.

Here’s what the entrepreneur and master negotiator had to say about clear communication, finding middle ground–and sealing the deal.

Q: How do you get what you want if the other party has all the leverage? And if they counter with something less desirable, do you just accept it because it’s better than nothing?

A: Excellent question. First, if the other side didn’t need something from you, they wouldn’t be at the negotiating table with you. I always like to tell my clients, never think the other side has all the leverage; you are there for a reason. They need something from you, which gives you significant leverage.

You get what you want by knowing three things: bottom line (minimum you will accept), ideal (target solution) and pie in the sky (overreaching but possibly attainable target). You have to prepare before the negotiation and know the answer to the three options above and know what your interests are so that if they are counter with something that addresses your interests (why you need something) as opposed to your positions (what you say you want) you have the clarity of mind to see that.

Q: What’s the secret to remaining calm and confident when negotiating?

A: There are five steps:

  1. Prepare before your negotiation.
  2. Understand your wants and needs, and try to anticipate the wants and needs of the other side. Think of the overlapping circles of a Venn diagram–that’s where you can find overlapping interests and common ground.
  3. Stay focused and take a break if you need to. Never feel pressured to answer a question or provide information that you aren’t ready to share.
  4. Recite a mantra in your mind, like, “I’ve got this.”
  5. Know your BATNA (best alternative to a negotiated agreement). Essentially, if you do not reach an agreement during this negotiation, what are you going to do? For example, if you go to a dealership to buy a car and you don’t, your BATNA is to continue to take Uber, the subway or walk to work every day.

Q: How do you keep your negotiation skills sharp? I want to be ready when the time comes.

A: The best way to stay sharp is to recognize the mini negotiations that happen every day–whether you are negotiating with a partner, family member, client or vendor–and practice. It’s actually better to practice when the stakes are low, so that you know what your negotiation style is. See what happens when you make the first offer as opposed to hearing the first offer from the other side. Then try the reverse.

Q: Any advice for having difficult conversations or addressing work conflicts?

A: First, separate the person from the problem. Then find the right time to address the issue. Have everyone at the table who needs to be there. And remember to be patient. Sometimes the issue can’t be resolved overnight. Lastly, recognize when you need to bring in additional resources, like my company BreakthroughADR, to help resolve the issues.

Q: How do you answer a question without answering the question? For example, when you’re uncomfortable with sharing information.

A: To answer the question without directly answering the question comes down to two things: who’s asking, and why are they asking? The first answer is important because you would respond to the question differently if it’s an investor, potential investor, entrepreneur or just a curious person. The second is important because if you can gauge why they are asking the question, you can find comparable data to answer their question.

If we are just talking about another entrepreneur trying to size you up, one option could be describing a dollar amount vaguely. Use terms like “around”, “near”, or “close to” and then drop a ballpark range (“around six figures”) or limit the scope: “revenues were higher in Q3 this year than Q3 last year.” If you want to steer clear of providing any answer, then try answering the question with a question. Something like, “Interesting question; are you thinking of investing?” Humor also works.