What are the successful strategies for negotiation that entrepreneurs could apply to their startup businesses?
Negotiation can be everything for startup founders. Virtually everything you do is going to involve some negotiation. Learning a few classic negotiation strategies, and some more advanced and current tactics and approaches can make all the difference in getting launched, staying alive, raising startup capital, and continuing to thrive. It will directly impact how you feel about all the time and energy you’ve invested when you exit and it’s over.
Everything Is A Negotiation
From well before day one of your startup you will be negotiating. You may even still be negotiating around this venture a couple of years after your company is acquired by a larger one.
Just some of the things you’ll be negotiating include:
- Time off from your job or school to start working on your business idea
- A time period and amount of money your family thinks you can commit to trying it
- The help of advisors and coaches
- Cofounder relationships
- Business partnerships
- Hiring team members
- Office space
- Equipment purchases, software, and financing
- Distribution channels and ad buys
- Fundraising terms with investors
- M&A deals
- Post-acquisition vesting and resting periods
The Foundation Of Every Successful Negotiation
Before any type of successful strategies for negotiation, it pays to do your homework. It’s worth knowing the terminology, what is normal for terms, and how the current climate is different. It’s also wise to do your homework on those you’ll be negotiating with too.
The more you know, the better you’ll be prepared to negotiate successfully. Failing to do this is going to be a blunder which will put you at a disadvantage before you even start. Research and get input from your fundraising coaches and M&A advisors.
13 Negotiation Strategies & Tactics To Know And Use
1) Empathy & Creating Win-Win Deals
It may not sound very tough, but developing empathy for those on the other side of the table is a powerful tool for getting deals done. It can serve you well too.
Even if you can crush your opponent and make them fold to your will in a negotiation, that can be a very short-lived ‘victory’. If it isn’t a win for everyone, then it can definitely come back to haunt you.
Look beyond simply what you can get the other party to agree to now. If they already aren’t really happy with the outcome, things can sour quickly. It can impact your organization and reputation.
2) Multiple Choice Offers
Rather than demanding a yes or no, or opening up a single offer to endless finer negotiations of the terms, consider a multiple choice offer upfront. Do you want deal A, B or C? It leaves less room for negotiating by the other side. It helps to speed things up, and direct others toward your preferred framework.
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