Every entrepreneur and business manager has to learn the skill of negotiating at an early stage.
Not everyone is an expert from the start and it takes time and a few hard lessons to get there.
Here I will stick to my experience of business deal negotiations. The easy way to remember my 4 top tips is to use the mnemonic KISS, which stands for:
Know what you want
This is key before starting any negotiation. For e.g. do you know exactly what you want from your customer pricing deals? Is it a 3% price increase or 4% price increase and if so why?
You have to do your homework and know what impact every 1% price increase has on yourbottom line and the consequences of not getting it. Negotiating with your largest customer and not getting an additional 1% price increase may be damaging to your profitability.
Once you know what you want, don’t be afraid to ask for it even if it may sound totally crazy to the other party. It maybe that you are making a loss on your largest customer and cannot afford to do that any longer. For e.g. you may need to ask for a 10% price increase.