Negotiation is a big part of doing business in construction and real estate. Overall performance can often be attributed to outcomes resulting from these types of agreements. Negotiation becomes even more important in down economies when margins become tighter and everyone wants a deal. For me personally, collaboration has worked much better then confrontation. Here are few tips for successful negotiations from our negotiation workshop:
Negotiation Workshop Hint #1
Do your homework. Knowledge instills confidence. Lack of knowledge instills fright. The Internet makes it pretty easy these days to conduct research on just about anything. Take the time to research the products or services you'll be discussing and improve your chances of getting the results you want.
Negotiation Workshop Hint #2
Seek alternatives. Having choices to fall back on is critical and avoids dumb decisions made out of desperation. The alternatives may not be the preferred choice, but having the option provides leverage and improves your negotiating position.
Negotiation Workshop Hint #3
Empathy. Negotiating is a process of communication. Good communicators are often good negotiators. Listening and understanding the goals and objectives of the other party improves your chances of coming to an agreement that will work for you and the other party. You don't have to agree with the other parties' agenda, but understanding it might help identify areas of collaboration.
Negotiation Workshop Hint #4
Establish boundaries. The only thing worse than not having enough work is having work that loses money. This may sound like common sense, but there are plenty of documented cases where companies will lose money simply to win new business. Do this enough times and see your business go away. Know your profit points and don't accept deals that lose money.
Negotiation Workshop Hint #5
Don't be afraid to walk away. Bad deals often result out of desperation and emotion. It's important to understand that coming to agreement in all cases is not usually a good thing. There are almost always viable alternatives that can be found and good negotiators understand that part of the process includes exercising restraint even if it means walking away.
Negotiation Workshop Hint #6
Keep your emotions under control. Sometimes people will make requests that are perceived as unreasonable. When this happens, it's important to keep emotions under control and not take the process personally. People who can control their emotions in the process understand that they have the power to say "no" when unreasonable requests are made, but keeping calm also allows good negotiators to listen and understand the other parties' objectives and perhaps identify options that will work for both sides.