By Jeff Wright, Senior Vice President, Hennessey Capital

Negotiation is all about resolving a situation that creates a mutual gain for both parties, For this to happen, you must keep an open mind and understand that everything is negotiable, keep the discussion positive, listen until it hurts, and be patient. Developing these skills go a long way towards building a relationship with your client.

Negotiations can be broken down into four phases, preparing, exchange, bargaining, and the closing. John Wooden, the infamous basketball coach at UCLA, once said that if “you fail to prepare then you are prepared to fail”. If you do not have an understanding of your client’s business and their wants and needs, you are doomed from the start. Gather as much information about the company and the person you are meeting prior to your initial meeting so that you can talk intelligently about their business and ask the right questions. Gaining company information directly from your contact, visiting their web site and asking a third party will help in assessing their business. Identify your most desired outcomes, goals, least desired outcomes, and best alternatives. What are you willing to accept as your bottom line? Be aware of your assumptions and be able to support your position. The focus should be on building trust, relationships and interest with your client.

During the initial exchange, start with some informal small talk. I look for family pictures or items in a person’s office that may provide some clues about their personal life. The small talk helps put the client at ease and gets them talking about his or her interests and can act as a segue to discussing their business interests. Be sure to understand their needs early in the process and develop a joint agenda to address those needs.

During the bargaining phase, understand who your competition is. Limited competition may allow you to negotiate from a position of strength and be more aggressive in getting your desired result. With plenty of competition you need to be more flexible and creative in your bargaining strategy. Don’t be afraid to think big and ask for what you want but be ready to challenge first offers. Never say “no” or “yes.” Use the “yes if” strategy to ask for something else you may want. Trade concessions that address their interest. Look for body language and facial expressions as an indication of acceptance or denial. Use it as an opportunity to ask probing questions to explore or create other options. Be cognizant of your own body language and facial expressions. You don’t want to give the impression you are upset and refuse to consider other options. Move slower with smaller movements without putting all your cards on the table. When you believe you can meet their needs under terms acceptable to you, make your proposal.

In conclusion, summarize your understanding of the terms and conditions so that there is no misunderstanding. If there is a misunderstanding, be graceful to avoid any conflict. If you reach an impasse do not be afraid to walk away from the table. It allows time for each side to assess its position and consider other options. In any event, always thank them. Now you are ready to negotiate!