Everything You Need To Know About Negotiating According To Abeir Haddad
Abeir Haddad is an entrepreneur and investor with over 20 years of experience in mergers and acquisitions. He has overseen large cap and micro-cap negotiations, restructurings and financings for reverse takeover’s and initial public offerings.
Negotiation vs. Compromise: What’s The Difference?
A compromise and a negotiation may seem the same at first. Both methods involve at least two parties who are trying to come to a conclusion. Since one party wants something different than the other, this process is a delicate compilation of strategies.
Compromising is usually a strategy that is done within the context of a relationship. It involves a give and take process. Usually, a compromise means that both people are gaining something and losing something to ease the burden of each other. Compromising is a way of finding a middle ground to make the relationship fair.
A compromise is one form of negotiation, but it is not the only way to make a deal. Negotiation is a strategic discussion. This type of process is typically used in business to resolve an issue involving finances. There are negotiation strategies based on mutual loss, and there are strategies that focus on winning.
Types Of Negotiation Strategies
One single strategy will not work for every deal. Because businesses and individuals have different priorities, a typical negotiation strategy will need to be tailored to the situation.
The competitive style of negotiation is well-known in business. This strategy reflects the intense interests of one party. There is little compromise involved and usually means the other party will have to give up something they want.
This negotiation style is not personal. While emotions may run high, it is not about the individual and remains a professional discussion. Those who use this strategy do not want to hurt the other party. They have a narrow focus. Individuals who must prioritize short-term gains will use this strategy.
Business professionals who need results fast usually benefit from this tactic. It is also an effective defense against other parties who use this strategy first. The danger in using this method is that the other party can walk away.
A collaborative negotiation style is designed to let both parties win. By focusing on all parties’ needs, a negotiator can find something of value to everyone. This is an agreeable way to handle business and is non-confrontational.
A negotiator that uses this style does not avoid tough conversations. While taking care of the needs of others, they can advocate for themselves. Collaborators will invest a significant amount of time into finding a solution. While this strategy accommodates many, it can leave the negotiator without as much as they could have gotten.
Compromising can be done in a negotiation. In this situation, both parties win, but they also give up something they want. It has both beneficial and discouraging elements to the deal. This strategy can be used in business as well as relationships.
Compromise is most beneficial when the opposite party can be trusted. If the agreement is necessary within a short timeline, this strategy can help forge a solution. Unfortunately, this type of deal will also mean losing to some degree.
Things To Avoid During A Negotiation
Planning is crucial to a successful negotiation. Trying to get the best deal without proper preparation will waste time and effort.
Skilled negotiators create specific, detailed plans that understand everyone’s priorities as well as their alternatives. If an agreement cannot be reached, alternatives are necessary to keep the ball rolling. Regardless of which strategy is employed, a negotiator must know his or her bottom line.
Preparation includes understanding how the other party negotiates. Other cultures may negotiate in an entirely different way. By studying the strategies that they used in the past and researching cultural tactics, a negotiator has some idea of what to expect.
Gloating should be avoided. Even if the negotiation was hard-won, a negotiator should always be courteous. There is a chance that their business will be needed in the future, and if a negotiator chooses to act poorly after the deal is done, this could jeopardize future plans.
A lack of analysis can backfire for any negotiator. Not only should the facts of the deal matter, but so should the opponent. Analyzing the personality and behavior of the other party will help during any negotiation process. What motivates them to behave in certain ways is the underlying foundation of a deal.
When To Accept A Deal
Knowing the bottom line is critical during a negotiation. Although that number will guide the process, being tethered to it may pose several problems.
Those who prioritize a specific outcome may miss out on other opportunities. This includes possibilities to collaborate with the opposing party. If the only concern is the bottom line, negotiators are also less likely to listen. Sticking to the original goal no matter what is generally a method used out of extreme necessity.
If a business deal is pressured by time or if there is an underlying urgency, it may be time to accept a lower offer.
Accepting too early in the process, however, is a mistake. Negotiators that settle on the first price may also upset the other party. If they believe they sold something worth that amount of money, they may assume it could have been sold for more.
Using the proper negotiation strategy depends on both the negotiator and the opposition. Different business situations will require some adjustment. By keeping calm and conducting thorough research, a negotiation can be successful in any circumstance.