Negotiation is a critical skill for entrepreneurs, whether you’re striking deals with clients, vendors, or partners. The ability to communicate your value, stand firm on priorities, and create win-win scenarios is what separates thriving businesses from struggling ones.
But too many entrepreneurs make costly mistakes in negotiations—either by undervaluing themselves, giving in too quickly, or failing to set clear boundaries. If you’ve ever walked away from a deal wondering, Did I just get the short end of the stick?—this is for you.
Let’s break down some powerful, no-fluff negotiation strategies that will help you secure better outcomes.
Before entering any negotiation, be well prepared. Know what you want to achieve, the potential outcomes of the negotiation, and any alternatives to the negotiation.
Knowing your strengths and weaknesses, and understanding the other party’s needs and expectations, will help you make informed decisions.
What’s the best-case scenario? What’s your absolute minimum acceptable deal?
Having these boundaries in place ensures that you don’t agree to unfavorable terms just because you feel pressured in the moment.
✔ Tip: Write down:
Flexibility in negotiations allows for creative solutions that satisfy both parties. To enhance flexibility:
Confidence can significantly influence the outcome of a negotiation. To project confidence:
Active listening is crucial in understanding the other party’s perspective. To practice active listening:
Listening is a highly underrated skill. Let’s also not forget our own communication skills have two sides … and just as important as strong listening skills is making sure you are also communicating in the way the other party needs.
Building strong relationships can lead to more successful negotiations. To foster positive relationships:
Some common circumstances where entrepreneurs might need to use these negotiation tips include:
Without a doubt, if you only read two tips from this post, make sure to read these below! Even though these are things I learned in my personal life, they are highly relevant to business and are closely connected. These lessons are essential!
For years – decades – I approached negotiations from the standpoint that I should present my best offer. I listen to what the other person needs, consider some of the things that I know they need but they do not realize, consider what I need, and present what I know is my best.
This shouldn’t be surprising. As an introvert (not to be confused with SHY), this is how we work. Extroverts work by discussing their thoughts out loud, which means in a negotiation there is a lot of talk back and forth. Introverts process their thoughts internally, and so when they do speak, it’s their final thoughts … we aren’t using the speaking as a way to arrive at that thought.
Deep down I know this wasn’t necessarily the best way; after all, people do like to feel like they’re talking you down and “getting a better deal”; but I had not fully put that into play. It feels sleazy to me … if I already know the best deal I can offer you, but I LIE to you, it just makes me feel so WRONG.
I fully realized this–and realized what a mistake it was–one night when my husband and I were playing “thermostat wars”. This isn’t something we really fight over … it just tends to be that one of us wakes up too cold or too hot! If you share a thermostat with almost anyone, I know you understand.
We had talked about sleeping temperature. I had research optimal room temperature for getting the best sleep. My recommendation was that we set the AC thermostat on 70. Our bedroom always feels noticeably warmer when you walk in (I haven’t measured but I would guess at least 5 degrees warmer), likely due to the large screen TV that one of us needs … *cough* not me 😉 So my thought process was that I don’t want to ever sleep warmer than around 75, so setting the temp at 70 should do it. 75F in the hot Texas summer seems like a great temperature.
My thought process was: he wants it warmer – he would prefer the thermostat on 75, which would make it around 80 in the bedroom. (why?!) I really wanted it set on 60, which would make it around 65 in the bedroom. I can’t sleep when it’s 80 and tend to wake up with a headache if I’ve been under covers all night in a warm room.
Split the difference, so I suggested 70 … a compromise.
But …
My husband obviously thought this was my initial offer. I would never bring my final offer to the table first, right?
If my offer was 70 … and his was 75 … then a compromise would be 73.
Wait! Wait wait wait … Then I had to backpedal.
I had to explain I had already done all of the math. He wants 75, I want 60, but I said 70 in the middle. He knows me well enough by now to know that *I already did all of the math*, right?
Oops.
Hard to change it to 65 when you already offered 70.
I’m a big fan of being as transparent as possible, and for me this has often meant bringing my best offer to the table.
However, starting with your best offer leaves zero room for negotiation – because the other person often expects that you did NOT bring your best offer, that it is just your first offer, and that means there is room for negotiation.
My friend (and client) Lisa reminds me to give away things that don’t mean as much, so that you can get or keep the things that do. But when you bring your best offer to the table, that means the only things to give away are things that matter.
Like 5 degrees on the thermostat … just enough to be sweating in bed in the summer. (Except yes I got my 70).
It’s really hard to ask for what you want in a negotiation if you don’t even know what you want.
One of the most common places that I do this – and that maybe we all do this – is not in my business, but in everyday life: discussions and compromises with my spouse!
Dynamics of past (bad) relationships have played out here for me, and not everyone may have had some of my experiences (I hope).
For example, my husband always asks me what gift I want for my birthday or Christmas. For years – decades! – in prior relationships, I never received gifts. In fact, one Christmas, one of my young sons (early elementary school aged at that point) asked why there were no gifts for mom under the Christmas tree – only for them and for dad. So the next year, and every year after, I purchased a gift for myself to wrap and place under the tree because they needed to grow up seeing the mom/wife receive gifts!
Forward many years, with my current husband, I couldn’t tell him what I wanted as a gift, because I had trained myself to … just not want! I had trained my brain over years not to bother considering something that never happened. (A hope for you is that you are never in that spot. Gifts are nice).
But a couple of years ago, when my husband asked what I wanted for my birthday, I had been thinking for months how I needed a new tablet. My iPad was so old that I could no longer even update it. Yes, that old lol – it worked until it didn’t. And I considered a new one a luxury so I had not bought one for myself. Yet having a tablet comes in very handy for both work and for play. So when he asked me for about an idea for my birthday, I told him I could use a new tablet – an iPad would be great, but even an Android (cheaper) would also be great.
Lo and behold – he gave me exactly what I asked for! Rather than some random funny or dorky thing he found on Amazon, which were usually pretty … interesting … creative? … unique! (anyone want a 5 lb gummy bear? Anyone?)
And he was happy to have given me something that he already knew I would like, versus what I now imagine usually happened – him worrying for time between the time he bought my gift and then gave it to me, all the while simply hoping that I would like it! Poor guy! I did the same thing the following Christmas – gave him an idea of something exact that I wanted, ended up with the exact thing I wanted (plus more).
And I realized, this is a true win-win. He gets to feel good, even before the gift has been given, and I get something I need or want. It was a skill that I had to retrain my brain to use – which is sad and actually detrimental spot for your brain to be in.
This philosophy relates to business negotiations as well, and the moral of the story is that you need to know what you want and need, so that you are able to ask for it. If you have not fully explored both of those questions before you get to the negotiation table, you’re missing an important step, and this is part of the preparation that you need to undertake.
You also need a list of everything you want – not only limited to what you need – including additional things that would be nice, but that you can do without if necessary, so that you have room to negotiate.
Continuous improvement is vital. Consider the following strategies:
Effective negotiation is an art that combines preparation, clear communication, and adaptability. By honing these skills, entrepreneurs can secure advantageous deals that propel their businesses forward.
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