Successful businessmen and venture capitalists like Mark Stevens don’t wake up one day and find their companies ranked as some of the most successful in the industry. Notoriety and financial success have been earned through years of careful supervision and investment of their business funds, monitoring each area of income and expense.
Business savvy is developed through years of experience and paying attention to those who have had their own successful ventures. More important than the investments that bring money back into the company is the skill of money management, with a particular focus on the budget. Controlling your company’s costs is vital to your long-term fiscal advancement, and yet it can be sabotaged by one of the most underrated business skills.
Areas to Practice Negotiation
You have to develop the mindset that negotiation is always an option. You know that this isnâ€™t always the case, but you never know when you may be able to tip the scales in your favor on a deal or contract until you try. Attempting to close a deal with new clients generally always sets off a round of negotiations. The potential client may debate the price or the timeline of delivery, while you may push for a certain minimum on orders or another term of the deal.
Your skillset can help you reach an agreement where your company benefits, creating more revenue, or generating more efficiency in your operations. The company utility bills, such as water or electricity, may not have room for negotiation, but things like the Internet or phone service have adjustable rates. Just like an unhappy residential customer may threaten to leave a provider for costs or services provided, commercial accounts that threaten to cancel its services are often given discounts or adjustments in retention efforts. This is a negotiation, and it works in several different situations.
If your company is looking to save money, you could also negotiate better loan terms or interest rates on your credit cards or lending accounts. Your initial contracts may have been drafted according to limited information when your business first opened, but stronger credit history and improved financial resources could encourage your lender to renegotiate your rates. Your employees may also try to negotiate their salaries or benefits to their advantage, and while you donâ€™t want to lose qualified staff, you need to remain profitable and efficient.
Your companyâ€™s office space or warehouse may be on a lease, and unless you make an effort, you will miss the possibility of getting some extra perks or a lower price point from the landlord. An insurance rate is generally based on a mathematical formula that weighs in the risks and coverages your company is purchasing, but talking to the agent about combining policies or making concessions could get you a better rate. Buying used equipment or machinery is another place to put your negotiating skills to good use. The value of goods that are used is more subjective than a new purchase and depending on how motivated the seller is, you could find yourself getting a lower price than originally advertised.
Skills Needed for Successful Negotiation
Whether you are negotiating for a better price on your raw materials or you want to land a new client, the skills needed to negotiate successfully are the same.
- Do Thorough Research. Long before you are set to meet with a client or make a phone call to a supplier, you need to have the facts. Have a general knowledge of the market rate for whatever service or product you will be discussing.
- Speak Confidently. By having the facts behind your side of the negotiations, you can speak with confidence and conviction. To project this confidence, address your negotiating partner slowly and deliberately. Remain calm, and allow your posture to display your confidence.
- Be Personable. Before you get into the negotiations, try to establish a personal connection with the other individual. Negotiating doesnâ€™t have to be an impersonal, stressful business tactic. Developing an emotional aspect can help put both parties less on edge and more willing to compromise with a friend.
All About Negotiation
Many people think about negotiation when it comes time to ask for a raise, take a new job, buy a car, or decide where the family is going to go on vacation or for dinner. From a business perspective, negotiation is the key to saving your company money. By paying less or something you need, you are able to earn more money for your investors, financiers, and clients.
The skill that you have unknowingly developed in your personal decisions of life can a positive impact on your companyâ€™s financial position. There are very few things that canâ€™t be negotiated, and if you are well-skilled in the practice, you could save thousands in company expenses while making thousands more during the course of your operations.
Featured image source: Freepik (Affiliate Link)