Negotiation is a crucial skill for any business owner. Whether you’re negotiating with clients, suppliers, or service providers, you want to make sure you’re getting the best possible deal. 

Luckily, there are plenty of tried and tested negotiation methods that are guaranteed to help you navigate your way through some potentially tricky conversations. 

Learning these essential skills is a surefire make you better at negotiating in business as a sole trader:

  • Do your homework
  • Ask meaningful questions
  • Listen to the other party
  • Keep things polite
  • Understand the deal dynamics
  • Make a first draft
  • Be ready to walk away
  • Don’t wait too long
  • Don’t fixate on one issue
  • Don’t accept the first offer

Do your homework

Before the talks, do your research on the other party. The more you know about them, the better chance you have of finding some way of appealing to them. 

Luckily, it’s easier than ever to find information on businesses and individuals. Search for their website, business profiles, and articles to find out everything you can.

It would help if you also prepared market research to back up your points. If you’re quoting a price for your services, justify that price with a detailed breakdown and compare it to others on the market. 

Alongside research, you should prepare a bottom-line figure in your head – an absolute minimum offer you’re willing to accept. Having that number in your head will give you some confidence and prevent you from getting talked down too much. 

Ask meaningful questions

The more you know, the better. Ask honest and open questions to find out the main obstacles for the other side. 

It’s not about probing or trying to get leverage – ask genuine questions that will help both sides reach an agreement. 

For example, if a client says your prices are too high, ask for their budget. If they say they’re hesitant, ask how you could reassure them. 

Listen to the other party

Negotiation is a two-way street, so you won’t get anywhere unless you’re able to see the other side’s point of view. The idea is not to win but to reach an agreement that works for everybody. 

Communication and empathy are the keys to making this work. Ask thoughtful questions, and really listen to their answers, so you can better understand what’s important to them and what their limitations are. 

Keep things polite

Also, a pretty good rule in life, try to be polite. When it comes to business negotiations, we seem to have an image ingrained into our heads of some no-nonsense business person who ruffles feathers and won’t take “no” for an answer. But being rude will get you nowhere fast. 

Remember, you’re trying to build a working relationship with the other party, so show them the respect they deserve, even when the negotiation gets serious. 

Understand the deal dynamics 

More often than not, one side normally wants to make a deal more than the other, which can significantly impact how much leverage you have. 

For example, a supplier with hundreds of other customers probably doesn’t need your business, so trying to push for a lower price may be difficult. Knowing exactly where you stand will let you negotiate more confidently.

Make a first draft

As you and the other party start making headway in the negotiation, make sure your write everything down as you go so you can both see how the deal is beginning to take shape. 

By the end, you’ll have a first draft that you can both take away, show to others, and consider.  

Be ready to walk away

Like it or not, some deals won’t go the way you want them to, and you have to be prepared to walk away if there’s something you can’t move on.

If you’ve outlined your reasoning, made your best offer, and they still can’t accept it, you need to be brave enough to leave it. 

It can be challenging to get used to, but you risk being taken advantage of if you don’t. Plus, there’s always the chance that they were just bluffing.

Don’t wait too long

The longer negotiations continue, the greater the chance of something happening that could throw the whole thing off. For example, disruptions to a supply chain might cause a supplier to rethink their prices, leading to a more expensive deal. 

It’s not that you should rush anything, just make the effort to reply promptly and keep things moving. 

Don’t fixate on one issue

During negotiations, you and the other party might find yourselves unable to agree on a particular issue. While it will need to be sorted eventually, don’t let it derail the whole process. 

There’s nothing wrong with putting a pin in it and addressing it later. By the time you come back round to it, having sorted everything else, it might be easier to come up with a compromise. 

Don’t accept the first offer

This one is a staple of good negotiation. If you’re negotiating prices with a supplier, there’s no harm in asking for a lower price. The worst they can say is no. Chances are they’ve asked for more than they need to prepare for this very scenario. 

It goes both ways too. When you’re taking on new clients, they’ll most likely try to haggle you down to a reduced rate, so start with a higher offer than you’re expecting to get.  

If you do accept a lower offer, try to get something else in return. For example, you could ask a supplier for a money-back guarantee or more forgiving payment terms

For a potential client, you could accept a lower rate in exchange for a positive referral in the future. 

Improve your financial management with accounting software

Good negotiation takes time, patience, and compromise. Thankfully, good financial management is as simple as downloading one handy app. That’s why over 40,000 business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With Countingup, you can receive real-time cash flow insights, create profit and loss statements, and view tax estimates, so you know exactly how every negotiation affects your long-term financial health. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 

Find out more here.