Negotiation is a valuable skill all entrepreneurs should have. Over the last four years, I’ve learned a lot about negotiation from leading my mobile gaming company, PerBlue.
I have eight tips for negotiation, the first five are below. Later this week, I’ll share five more.
Always try: By negotiating you may be able to get a better deal for both parties. Remember that not negotiating is a conscious choice — it has an opportunity cost too.
Set Your Bar: Before you enter the negotiation conversation, commit yourself to your “absolute minimum price.” This is the lowest you’ll go before selling, or the highest you’ll go before buying. Stick to this commitment and press “pause” if you can’t get within this range. Tell the other party you’ll have to think about it and step away to re-evaluate the deal not in their presence.
TMI: Don’t let the other party know your “absolute minimum price.” Keep this information to yourself and don’t share it.
Communicate: Tell the other party what is important to you. That way, they know where your values lie and will be more apt to giving you those things.
Speak First: Be the first party to offer a price/suggestion/anchor point for the negotiation. If you speak first, you set the standard and more often than not, will hold the advantage. Make your “initial offer” no matter how absurd it is, but always make your offer politely.
If you aren’t the first to offer a deal, make sure to respond to theirs promptly and tactfully. For example, if you we’re going to propose $150 and they say $5000. Be very polite and say, “I was going to initially offer you more in the $150 range, but lets keep talking.” Don’t let a huge discrepancy in value cause you to abandon all hope, you never know how flexible a person can be.
Check back for my final thoughts on negotiation in the workplace and beyond!
About TDS Guest Blogger Justin Beck
Justin Beck is the Co-Founder and CEO of PerBlue, a mobile and social gaming company in Madison, Wisconsin. The company is best known for its flagship product, Parallel Kingdom, the first location-based RPG. Justin is a passionate software developer and entrepreneur. As CEO, Beck has grown PerBlue from a group five college friends to a team of 30 full-time employees.
Prior to starting PerBlue, Beck held software engineer and program manager positions at Microsoft and Google. Beck graduated from the University of Wisconsin with degrees in Computer Engineering and Computer Science.