How to Win a Business Negotiation

How to Win a Business Negotiation

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If you’re in business, you’re a negotiator. You have no choice. Business doesn’t happen unless two or more people enter into a transaction.

This can be as simple as buying inventory or as complicated as a merger of two public companies.

Without transactions, business doesn’t happen, and every transaction involves a certain amount of negotiation.

When you’re in business, negotiating the best possible deals is a high, if not the highest, priority. As a business owner, you can’t know enough about negotiating.

Negotiating successfully

Strong negotiators master written, verbal and non-verbal communication. They adopt a conscious, assertive approach to their communication.

Good negotiators are:

  • flexible
  • creative
  • aware of themselves and others
  • good planners
  • honest
  • win-win oriented
  • good communicators.

Assertive communication

During a negotiation, you may choose to use a passive, aggressive or assertive communication style. Using an assertive style will help increase your chances of negotiating successful outcomes for your business.

Passive communicators are inclined to use ambiguous language, adopt under-confident body language, and give in to demands too easily.

Aggressive communicators take a confrontational approach that tends to alienate other parties and destroy negotiations.

Assertive communicators, however, are both confident and considerate. These communicators are more likely to keep discussion going and facilitate mutually beneficial outcomes. They adopt a strong, steady tone of voice. They are factual, rather than emotional or critical. They describe their views, starting sentences with ‘I’, rather than direct criticisms starting with ‘you’.

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Tips for effective negotiation


  • confuse negotiation with confrontation – you should remain calm, professional and patient
  • become emotional – remember to stick to the issue, don’t make it personal, and avoid becoming angry, hostile or frustrated
  • blame the other party if you cant achieve your desired outcome.


  • be clear about what you are offering and what you need from the other party
  • be prepared – think about what the other party needs from the deal, and take a comprehensive view of the situation
  • be consistent with how you present your goals, expectations and objectives
  • set guidelines for the discussion and ensure that you and the other party stick to them throughout the entire process
  • use effective communication skills including positive body language
  • prepare for compromise
  • strive for mutually beneficial solutions
  • consider whether you should seek legal advice
  • ask plenty of questions
  • pay attention to detail
  • put things in writing.

Strategies for negotiating

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Understanding the other party’s interests and tactics is integral to good negotiating. Choosing a strategy that best responds to their interests and tactics will help you achieve the best outcome.

Matching the strategy to the situation

Some of the different strategies for negotiation include:

  • problem solving– both parties committing to examining and discussing issues closely when entering into long-term agreements that warrant careful scrutiny
  • contending– persuading your negotiating party to concede to your outcome if you’re bargaining in one-off negotiations or over major ‘wins’
  • yielding– conceding a point that is not vital to you but is important to the other party; valuable in ongoing negotiations
  • compromising– both parties forgoing their ideal outcomes, settling for an outcome that is moderately satisfactory to each participant
  • inaction– buying time to think about the proposal, gather more information or decide your next tactics.

Your chosen strategy will depend on who you are negotiating with and the type of relationship you have with them. For example, what level of cooperation and common interest exists between you, and how will each party behave during the negotiation? It will also depend on what you are negotiating, and the time frame and setting you are negotiating in.

How to approach a negotiation

As well as choosing a strategy, you may wish to consider your approach to the issue being negotiated. There are 3 key approaches to negotiations: hard, soft and principled negotiation. Many experts consider the third option – principled negotiation – to be best practice:

  • The hard approach involves contending by using extremely competitive bargaining.
  • The soft approach involves yielding, where one party tries hard to meet the interests of the other party and forgoes their own interests.
  • Principled negotiation focuses on achieving a lasting, win-win outcome by:
    • separating the people from the problem
    • focusing on interests not positions
    • generating a variety of options before settling on an agreement
    • basing the agreement on objective criteria.

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