If we are to believe what we see on The Apprentice—those brief snippets of The Donald dispensing hardball wisdom after dispatching some would-be acolyte in the boardroom—being a great negotiator requires a serpentine combination of ruthlessness and charisma. But the negotiations that occur every day in the world of small and mid-sized businesses, from determining a new hire’s salary to getting the best deal from a vendor, are hardly the stuff of great—or even not-so-great— drama. Anyone who starts a business should see them as opportunities to bolster their bottom line and forge lasting relationships, not tense warroom scenarios from which only one victor can emerge. It doesn’t take a sixth sense; it just takes knowledge.

Get Prepared

"People think they need some special skill and that’s just not the case," says Alan Axelrod, author of Getting Your Way Every Day: Mastering the Lost Art of Pure Persuasion. “What you need is data, a range of what is acceptable. Instead of focusing on personal eloquence, focus on that data.”

Indeed, the surest way to demystify any fear is to learn as much as possible about the thing that scares you. “Doing homework beforehand is absolutely critical,” says George Eaton, a partner with the Bangor, Maine law firm of Rudman & Winchell who specializes in negotiation. “Gain as much knowledge and data as possible.”

Begin this process by clearly setting your own objectives. Some basic market research should tell you the most you can possibly get from any transaction. A hard look at your own bottom line will show you how much you can afford to give up. Once you’ve determined exactly what you can hope to gain, decide which of your objectives you can compromise to get it, and which you can’t. With a clear idea of what you can realistically expect, look at the situation from the other side of the bargaining table. By researching the party with whom you are about to negotiate, you can begin to determine their likely objectives and consider ways to make them work with your own.

Make a Connection…

It may be tempting—because of nerves heading into the boardroom or a bull’s-eye focus on sealing the big deal—to see a negotiation as a means to an end. But closing one deal doesn’t have to mean you close the door on the chance for others. If both parties benefit from it, the negotiation of one transaction can become the groundwork for a long-term business relationship. “You should go in wanting to exchange value for value,” says Axelrod. “If you are in business, you do not want to create a sale, but a customer. Do this by constructing a situation of fair value.”

Approaching a negotiation as a chance for camaraderie rather than an adversarial showdown not only makes smart business sense, it may actually ease apprehensions about the process itself; cutthroat is not the only way to play. Stay focused on your objective, but don’t go in convinced that there is no such thing as a win-win. “Focus on getting what you want,” says Axelrod, “not on making other people lose.”

Even if the transaction doesn’t lead to repeat business, your reputation could suffer if you go out of your way to get more than you give. “You’ve got to recognize [the possibility for] an ongoing relationship,” says Eaton. “You don’t want to sour it by getting every nickel out of [the other party].” Satisfying the parties on both sides of the negotiating table will benefit everyone. Honesty and forthrightness will earn you respect, which will burnish your reputation in your industry and help you find more success in future negotiations. Drawing a line in the sand and refusing to cross it will only cost you leverage in the negotiation and respect in your field. “Try to develop an environment of trust and confidence,” advises Eaton. “A lot of negotiation is about understanding the other party’s needs and situation. The only way you get that is to offer it.”

…But Don’t Be Naïve

A value-for-value approach to negotiation, however, presumes that you’re on equal footing with the other party, which may be more than a small or mid-sized business owner can realistically hope for. You may very often find yourself in
need of something that someone else—someone bigger—has. One perk of being at the lower end of the food chain is that the bigger eaters with whom you may need to negotiate probably have a like-sized reputation to protect. The business ramifications of this should prevent more well-known firms and institutions from abusing their power. As Eaton points out, “People will often do the right thing because they don’t want to jeopardize [their reputations].”

And sometimes they won’t. Don’t enter a negotiation with the belief that everyone who gets into business has an honor code. Protect yourself first and foremost by determining the least you are willing to accept from a negotiation and the most you are likely to get. Be realistic about this. As Axelrod says, “You can’t expect to sell a $10,000 car for $20,000.” On the other hand, if you’re on the selling end and $10,000 is the lowest reasonable market price for your product or service, make sure you—and the people sitting across the table from you—know what you’re worth. Make your target the greatest amount of product, service, or compensation you can reasonably expect to receive. And don’t be too upfront about the least you can reasonably afford to take. In fact, don’t be upfront about it at all. Honesty in your communication with clients will only improve your image and the likelihood of future deals within your industry but, as Eaton says, “You don’t have to tell them everything.”

Be Prepared To Play the Game

If you need the deal more than the other party, pretend that you don’t. In any kind of negotiation, the listener generally has the power. The more someone talks, the more desperate they begin to seem. “Get the conversation started with broad questions and lots of listening,” says Eaton. “If you ask broad questions and then just sit, other people will speak because they hate silence. The savviest negotiators are the quiet ones.” Axelrod endorses a similar strategy. “Don’t start with statements, but questions,” he says. “You’re almost always better off getting the other person to say a figure first.” Subtle tactics like this go a long way toward establishing a leader and a follower in the negotiation. Even if the deal is make-or-break for you in a way that it isn’t for the other party, enter the conference room ready to lead.

But make sure the person doing the negotiation for the other side is qualified to go along with you. Sometimes, especially when doing business with a larger corporation, you will find yourself negotiating with a lower management employee who doesn’t even have a say in the matter. This employee will then report back to the actual managers who do—the managers you still haven’t had a chance to talk to. Eaton noted in a 1997 article for Findlaw.com that, “Sometimes this is unavoidable, but it is often used as a negotiation tactic, and if recognized in advance, should generally be avoided.”

If a negotiation becomes especially tense and begins to approach a stalemate, one may be tempted to bluff. While leading someone to believe that your options for getting what you want are numerous, the damage done by a bluff correctly called may end the negotiation and, in the worst case, do long term damage to your reputation if those who called the bluff choose to share the story with others in your industry. Eaton prefers to forgo bluffing altogether. “If I didn’t have another proposal, I wouldn’t do it,” he says. A safer bet is to inform the other party that you are open to pursuing another offer, and have the goods to get one. It may not pack the same punch as actually having another offer in your lap, but it could get the negotiation moving and, at the very least, let the other party know you won’t wait forever

But there is far more to a negotiation than what is said. Picking up on cues like body language, mood, or inflection can tell you as much as any single word. Be mindful not to come across as confrontational or antagonistic, but if something you say leads those with whom you’re negotiating to change demeanor or exchange what appears to be a charged look, mention that something you’ve said seems to have resonated. Then find out why. If your instincts tell you that something is going unsaid, something probably is. As Eaton has previously written, “Often one word will give away the other party’s hidden agenda in a transaction. Sometimes a facial expression will reveal the other party’s true position on a point.”

Share Some Space

Of course, you won’t have any way to read facial expressions if there is no face to look at. Negotiation is just one of the many formerly person-to-person interactions that can now take place over e-mail. An “e-gotiation” may be less formal and intimidating than a meeting in person, but it is difficult, if not impossible, to get an accurate read on someone’s motivations if you can’t look them in the eye. Likewise for forming a lasting business relationship with someone you’ve never really observed and listened to. As Axelrod points out, more than anything, the Internet has “raised the value of face-to-face meetings.” If you are willing to travel to negotiate a deal, or foot a portion of the bill to get someone to come to you, you immediately ingratiate yourself to the other party and make it clear that you’re serious about the business at hand. If you live in New York and need to settle a negotiation with someone in Los Angeles before the week is out, this level of commitment may not be possible. But, when stakes are high, a meeting in person is an excellent way to show respect for the business, the other party, and the potential relationship.

YOU HAVE NO WAY OF KNOWING AT the start of a negotiation whether or not a relationship will be worth pursuing. Regardless, raise the ante early by being very open about what you want, bearing in mind that what you want is the most you can get. Even if that’s not what you walk away with, starting the negotiation process with a clear idea of your own worth gives you a much better chance of giving others the same idea. “Perhaps the single most important thing to remember is that if you want something, you should ask for it,” says Axelrod. “Don’t assume you can’t have it.”

Not Just Because We Said So: Negotiation’s golden rules in practice

Why You Should Begin the Bargaining

In 1912 Theodore Roosevelt’s campaign staff printed three million copies of a photo of our 26th president for circulation with a campaign speech. When Roosevelt’s campaign manager, George Perkins, discovered that a photographer named Moffett owned the rights to the photo, and had not been asked permission for its use, staffers began to panic; copyright laws allowed Moffett to charge as much as $1 for every copy made of his photo. So Perkins sent Moffett a cable informing that the campaign planned to distribute millions of pamphlets with Roosevelt’s picture on the cover. He then asked Moffett how much he’d be willing to pay for such tremendous publicity. Moffett replied that he’d be willing to offer the campaign $250. Perkins accepted the offer.

Why You Should Develop Your Brand

Seeking a specific type of light for one of his films, Cecil B. De Mille borrowed a powerful lamp from an opera company and positioned it so that half of the lead actor’s face was covered in shadow. Pleased the effect, De Mille sent the film to Samuel Goldwyn. The legendary producer was less than impressed, responding via telegram, “CECIL, YOU’VE RUINED US. YOU’VE LIGHTED ONE HALF THE ACTOR’S FACE AND THE EXHIBITORS WILL PAY ONLY HALF PRICE.”

De Mille replied, “IF YOU AND THE EXHIBITORS DON’T KNOW REMBRANDT LIGHTING IT IS NO FAULT OF MINE.”

A final message from Goldwyn read, “CECIL, YOU ARE WONDERFUL, REMBRANDT LIGHTING. THE EXHIBITORS WILL PAY DOUBLE.”

Why You Should Be Upfront About What You Want

Lord Northcliffe, the founder of London’s Daily Mail, was known for his tendency to arbitrarily fire members of his staff. The publisher once asked a writer how much he was earning. “Eight pounds a week,” the man replied. “Are you satisfied?” Northcliffe asked. When the employee replied that he most certainly was, Northcliffe fired him on the spot, saying, “I don’t want anyone here to be content on eight pounds a week!”

FURTHER READING

Certain negotiation tactics are better suited for certain situations. Here are a few books to help you adjust your strategy for the negotiation at hand.

Seven Secrets for Negotiating With Government by Jeswald W. Salacuse. $24.95, Amacom Books

Global Business Negotiations: A Practical Guide by Claude Cellich and Subhash Jain. $29, South-Western Educational Publishing

Legal Negotiation: In a Nutshell by Larry L. Teply. $24.50, West Group Publishing

How to Sell Your Business, And Get the Best Price For It by John E. Sampson. $24.95, Beaver’s Pond Press

Getting Your Way Every Day: Mastering The Lost Art of Pure Persuasion by Alan Axelrod. $17.95, Amacom Books