Four Steps to Master the Art of Negotiation

Four Steps to Master the Art of Negotiation

There’s no secret formula for successful negotiations. However, the following steps can help founders get great deals for their startups

Negotiation skills are essential for a successful startup journey. Studies have shown that people who don’t learn the art of negotiation are 60 percent less successful than those who do. As a founder, you will probably seek funding to grow or start your business, and that’s where the role of negotiation comes into play.

Almost every startup founder has to battle talks with potential investors. Here are four steps every startup founder should follow when negotiating with investors:

Set your objectives

As a startup owner, you need to determine your business objectives and goals. Have a clear understanding of your desired outcome, bottom line and plan B. At the same time, do your homework on the internet. Ensure that you understand the investors’ end goals, biases, strengths and weaknesses. The startup founder and investor need to be on the same page to get a fair and mutually beneficial deal.

Assess your BATNA

Don’t forget to assess your BATNA before approaching an investor for negotiation. BATNA is a term coined by Roger Fisher and William Ury, members of the Harvard Negotiation Project and the authors of Getting to Yes. It simply stands for “Best Alternative to a Negotiated Agreement”. Your BATNA protects you if the negotiations fail to reach an agreement. Sometimes, your best alternatives are not appealing. But you still need to decide which one is the best among the possible options. Therefore, it is always advisable to prepare and understand your BATNA before you enter into a negotiation.

Trust matters

Trust plays a crucial role between an investor and a startup founder. Trust and honesty are the foundation of successful negotiation. A study conducted by the Indian School of Business(ISB) provides insights into the varying levels of trust of negotiators and their effects on negotiation outcomes. The study suggests that trust promotes greater information sharing without the fear of exploitation. Building trust further leads to value creation and better results for all negotiating parties. The study emphasizes the importance of trust in the negotiation process and accordingly encourages negotiators to prepare strategies to attain fruitful outcomes.

Control your emotions

Entrepreneurs must keep their emotions and ego at bay to move through the negotiation process constructively. The display of emotions can have both positive and negative effects on the negotiation deal. According to Andrew Wasynczuk, a senior lecturer of business administration for Harvard Business School, anger is one of the most destructive emotions during negotiation. “It tends to start rising on both sides, and inevitably there is a point where it erupts. People walk away and say there’s value on the table, but I don’t care,” says Wasynczuk.

Now that you know how to master the art of negotiation, it’s time to get the most out of your business negotiations.

Header image courtesy of Unsplash

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

Shrinkflation

What Is “Shrinkflation” and Why Opting For It Isn’t Companies’ Only Choice

You might have noticed grocery prices are soaring, or your usual go-to pack of chips is shrinking in size—all thanks to massive inflation. As of August 2022, the U.S. consumer price index (CPI), which measures the change in consumer prices for a specific set of goods over a period, has increased by 8.3% (year-on-year). Although it has gone down slightly from 8.6% in May, the highest it has ever been since 1981, it remains high and worrying.

Top 3 Affordable and Little-Known Smartphones to Bring Home in 2022

Top 3 Affordable and Little-Known Smartphones to Bring Home in 2022

Apple has remained at the center of the smartphone industry for years. The sleek, striking design, ever-improving chip and robust camera system of the iPhone have made it one of the most sought-after smartphones in the world. This month, Apple cemented and extended its lead in the industry by putting forward the next generation of iPhones.

5 More Business Podcasts You Need to Listen To

5 More Business Podcasts You Need to Listen To

Entrepreneurs have one thing in common—they always look for opportunities to learn and grow. To gain an understanding of running a viable business, you need to listen to the experiences of those who have emerged triumphant in the business world. A great way to do so is by tuning into a vast number of business and entrepreneurship podcasts scattered across the internet today.

5 Hobbies To Maximize Your Entrepreneurial Drive

5 Hobbies To Maximize Your Entrepreneurial Drive

Entrepreneurs are a special breed of person. They’re go-getters, risk-takers and dreamers. Yet, even the most driven entrepreneur needs to take a break from time to time. Spending every second of your day on your business is stressful, and you will lose your drive very soon. If you want to stay energetic and ready to take on new challenges at work, hobbies are what you need.

Making the Metaverse a Force for Good with the Metaverse Charity Foundation

Making the Metaverse a Force for Good with the Metaverse Charity Foundation

If you are a frequent reader of our website, you must have seen us mention The Sandbox, Decentraland and Axie Infinity. These are some of the most popular metaverses out there, and the one thing they all have in common is that they all have their origins in Asia. While Asia is home to all these metaverse projects, it suffers two main issues: the region has major rural-urban inequality as well as a significant wage difference between high-skilled and low-skilled occupations.

How Do Stores Get You to Spend More Money

How Do Stores Get You to Spend More Money?

Have you ever entered a grocery store to buy some milk but ended up with a bag full of items you didn’t even need? You’re not alone if you feel guilty for spending more money than you intended. It’s not our fault that we keep putting items in our shopping carts; we are manipulated to do so! To make sure you buy more, retailers will go all the way to carefully engineer every aspect of their store.