How Anyone Can Negotiate Everything and Save Big
Do you struggle with negotiating?
Negotiating is truly an art form-taking those who master the craft, sometimes, years to do. However for most, it can present itself as a Goliath-like challenge.
As business owners, we are faced with making purchasing decisions and deals for our businesses every day. These decisions in themselves can be an incredible investment for our businesses, or they can become a penance that we have to live with. The one thing we fail to realize is even the "incredible investments" can become detrimental to our businesses, if they end up being a financial strain on our organization.
For example, you purchase new software that will help you manage your social media, that costs around $200 a month to use. The software will help you to manage your social media and reduce the time you spend on it-sounds awesome right? That "reasonable" fee of $200 ends up being $2400 a year; which is a pretty penny to be spending in any small business.
You are probably thinking, "Maybe in that case, the software is not worth it." What we should be asking is, "At what dollar amount IS the software worth it?"
The software can could potentially be time saving and useful to you, but at what price would it provide the max return on its investment? That $2400 dollars a year, or $200 a month, could be reasonable if the software's return exceeds the original investment amount. If it does not generate a high ROI for your business, than it is not worth the pretty penny you are spending on it.
The negotiation process, should be the chance for you to prevent your business from making financially unreasonable purchases that do not provide a high return-not the other way around. Negotiating can make any non-negotiator feel like they are in over their heads, but it doesn't have to be this way.
Negotiating is a constant within the role of a business owner. That is why it is essential that we are empowered by negotiating, not burdened.
So how do we empower ourselves through negotiating? By simplifying the process and following these three steps to negotiation success:
- Determine Your Dollar Comfort Zone- Do your homework before you start negotiating. Use this simple formula to determine your comfort zone:
Market Value of Product-Expected ROI in Dollars= Top of Comfort Zone
Desired Value of Product-Expected ROI in Dollars=Bottom of Comfort Zone
By knowing your top, bottom, and estimating the middle, you can determine what is most financially efficient for your business and drive towards that amount as your goal.
- Remember, There Is Always Room To Negotiate- Sometimes the situation may seem like it is not favorable towards negotiation-nothing could be farther from the truth. Make sure that during the process you slow down, and ensure you are giving yourself time to collect your thoughts. During this time, analyze areas that have wiggle-room for negotiating-then explore them!
- Use This Key Phrase- "Is that the best you can do?" After listening to what the other side has to offer, always ask this question-because they can probably do better than what they are originally offering.
By using these three steps you will be simplifying the negotiating process, so you can ensure your securing the best deal for your business.
Use the #UltimateBuyerQuestion to give yourself a raise and leverage your money. @thecharfens @HuffingtonPost
Remember, it is also OK to walk away from a deal. If you are not able to work with the other party down to your dollar comfort zone, then walk away from the deal. No deal is worth financially derailing your business. Even if the product seems like it is the "magic pill" to cure your business pains, it is not worth its price if there is no return on the investment.
By setting our dollar comfort zone before negotiating, you are setting some great guardrails around your business. With these guardrails, you are taking the right steps to only purchase products or services that truly generate your organization a high return.
So don't talk yourself out of negotiating. By negotiating you are not only saving your business money, but advocating for your business' future success.
Alex & Cadey Charfen are the Co-Founders of the Charfen Institute.