Tips for Surviving a FinancialNegotiation

I remember once, one of my mentors told me that I needed to sharpen my negotiation skills. He even recommended a book I should read. By virtue of him being my boss I was upset and hurt because we had just brokered a multi-million deal for the company even after making a few concessions. The thing about life is that, if you miss an opportunity to learn an important lesson, life will throw that curve ball at you until you wise up.

I believe what he was trying to teach me then could have been a big lesson for me in the future. This particular repeat lesson cost me a little over half a million Kenya shillings. Now, that is one helluva an expensive lesson to learn. Let me share a few tips on how to survive a tough negotiation;

a.Always quote with the client in Mind
A lot of us work with industry defined products and services. Bottom line is, clients always know in their minds what product they want, even though it is just semantics to you. It is important to them that you understand what they want and package it to suit their needs.

b.Would you pay for that?
After you complete your quotation it is important to ask yourself one little important question. If you were the client would you really pay that amount for that product and why? This process will help you form a basis for argument during a negotiation and it also helps you get into the mind of the client.

c.Know your worth
A lot of us are willing to do anything for a quick buck without a care for how your brand yourself and your business into the future. If there is a specific market need that you are filling, you need to be able to define the intellectual and physical assets that you add to your customers’ bottom line 5, 10, 30 years into the future. Price your service/product with that in mind and do not back down or sell yourself short.

d.Beware of your big guns
One thing you need to realize about human nature is, your brain is automatically drawn to big figures. This is where your costs inflate and the first point at which you want to make reductions. Ensure that you position your big guns wisely. Where they add value to the client more that to you.

e.Be willing to make concessions
Before you walk into that negotiation, ensure that you have a clear idea of where you are willing to make concessions and arm yourself. One of my very good friends told me, quote for everything, even twice under the different headlines. It allows you room for give and take.

f.Be stubborn and firm
Sometimes pure stubbornness prevails. Just refuse to back down on particular items and leave it at that. Argue your case out, offer solutions that make the client feel like they wont get as much worth out of you for your product/service but for goodness sake don’t back down.

g.Be willing to walk away
It is important to know the point at which a client will not make any business sense for you to have. It is only then that you will be able to walk away from a big deal because it won’t be worth it. It is only at this point that you will have the audacity to fire a client.
If your internal cost of running their business costs more that you are billing; walk away.