Small businesses have a 90% failure rate according to Startup Genome. This is a stinging reminder that although small businesses seem easy to start, finding success is a whole other ball game.
Besides a great idea, building a successful small business requires skill. The ability to negotiate is one skill that’s often overlooked or the value is underestimated. Keep reading to see how investing some time to build strong negotiation skills can pay off.
Boost sales
Generating sales is a key part of having a successful business. In the short term, offering discounts can be a great way to create interest in what you’re selling. However, when price cuts are given out too often it can devalue your products or services.
Switching your customer’s focus from price to value can help businesses avoid the overuse of discounts. Increasing the perceived value of your product or service could result in more sales. Negotiation training can help you quantify and persuasively present the value of your products or services. You also learn how to ask questions that can help reveal a customer’s true needs and expectations. When you understand your customers better you can sell more of your product or service.
Rent office space
When you’re running a small business, every dollar you spend matters. Rent can often take up a large portion of your overall business expenses. You may be able to save some of that money by negotiating effectively with your landlord. Shaving off even a small percentage of how much you pay can result in savings you could use elsewhere.
Some landlords might be unwilling to negotiate on rent. They may, however, be open to offering other concessions like a rent-free period, access to amenities, property upgrades, etc. Those concessions could save you money in other areas. So, before you meet with your landlord, think of other benefits other than the rent that you may find valuable.
Resolve conflicts
Conflict and business go hand-in-hand. Although it might be easier to ignore disagreements in the short term, it could lead to bigger issues. Unresolved workplace conflict can reduce performance and productivity and lead to higher turnover. Hence the need to deal with disagreements as soon as they pop up.
Training in conflict negotiation can equip you with the skills to tackle issues promptly and effectively. For example, you’ll learn how to practice active listening techniques. Active listening can help you ease tensions and uncover the true root cause. You’re also taught how to strengthen your emotional intelligence. Emotional intelligence is vital to prevent the situation from escalating. One way to do this is by avoiding certain words that are known to spark arguments, namely “but”, “although”, and “however”.
Hire talented employees
Negotiation skills can be invaluable when it comes to hiring. Today’s job market is competitive. Not only do top candidates receive multiple offers, but they are also snatched up quickly. According to ERE Recruiting Intelligence, qualified job seekers are gone within 10 days.
Talented employees can boost productivity levels and reinvigorate your brand with new ideas. Companies, therefore, need to act quickly to hire the best possible people available to them.
Knowing how to negotiate helps you make a persuasive case for why a job seeker should work for your company. Also, taking time to research what to offer can help you determine an attractive salary that works for your company.
Lower supply costs
According to research done by U.S. Bank, cash flow problems are the top reason why small businesses fail. One way you could free up some cash is to lower your supply costs by negotiating with your suppliers.
Trying to make a deal with your suppliers can be intimidating if they seem to be in a stronger position to bargain. Negotiation skills training gives you an edge by showing you how to research information that you could use to increase your leverage. You can also learn how to build positive rapport and relationships with your key suppliers. Suppliers are often more likely to accommodate you if you’ve taken the time to build a great relationship.
The Takeaway
The ability to negotiate is critical to the success of your small business. It is therefore a skill worth mastering sooner rather than later. If trying to make a deal with others makes you nervous, don’t worry. You can master this ability with effective training and practice, which will ultimately develop your confidence.
