The art of negotiation

The definition of negotiation is ‘to discuss with the goal of finding terms of agreement’. In dealing with clients, suppliers or anyone else in the day to day running of a business, you will find yourself working towards agreeing to terms in a whole host of different scenarios.

Whether you are trying to negotiate lower rates with suppliers to increase your profit or haggling over a contract rate, perfecting the art of negotiation is a crucial skill. If you are good at negotiating you can ensure the best return for your business. Here are some things to keep in mind when you are attempting to negotiate.

Fact overs emotions

Know what your strengths. Arm yourself with the facts you need to back up your standpoint and be prepared to quote your sources. State your case factually rather than falling back on to what you think or feel,  it is much easier to justify your facts than your feelings about an issue.

Body language

Be aware of the other person's body language - as well as what they are saying and tone of voice for additional pointers. Is their body "open" for communication or are their arms tightly folded and blocking you? Are they acting defensively, looking away, or are they meeting your gaze full on?

Focus on agreeable terms

Concentrate on reiterating the points you agree on to lead into demonstrating how your proposal can benefit those mutually agreed areas. ‘I agree with you on the importance of ABC, which is why completing the additional XYZ project can benefit ABC’.

The negotiation game

Choose your approach carefully. You can either ask for much more than you actually intend on settle on, or request superfluous points that you are willing to forego to gain ground on what you actually want. Be very clear before you enter a negotiation, therefore, as to your ‘low’ and ‘high’ priorities so you know which ones to trade on if you are put on the spot. Sometimes holding out will pay dividends.


Take notes or record the discussion. At the close of the discussion summarise what you agreed on and what you will do next and carry that action out. Confirm everything in writing. If you were finalising contract details, have a copy waiting for final amends and send it immediately for signature.

End on a positive note and walk away on good terms - whatever the outcome. Leave the negotiation with the impression you are a professional business person, even if you didn't come away with what you wanted you will have gained valuable lessons for the future.

Client budget

If you are negotiating on price and that rate drops close to what is no longer profitable to you, then offer the client less of your service for the budget available (if you still want the work). Again a positive ‘Let's see what can be done for that price’ may still secure you the work while maintaining your profit margin. If the client won't accept less for paying less, can they offer you anything more to compensate? Better overall package, perks, or some means of compensation other than money?

Some other tips

  • Be sure of what the other person's needs are and what's being offered.
  • Be sure of what you want from this discussion - from your ideal solution to your rock bottom compromise and what construes a ‘deal-breaker’ for you. Inside of that framework tries to keep your options open as far as possible.
  • Make sure you have something to offer the other person to give you something to trade with.
  • Are you discussing one point or could you consider negotiating on other benefits/ alternatives?
  • Do not make ultimatums you don't intend to keep!
  • Practice negotiation with a friend beforehand
  • Try to understand what would be fair and reasonable to both parties
  • Negotiation is about both sides contributing to an outcome that they feel they can progress the relationship with. It will almost certainly involve compromise on both sides.

More running your business.