Business Negotiation

Business negotiations are processes through which two or more parties deliberate on a situation, problem or deal to find a mutually agreeable solution or conclusion. Negotiations are part daily business activities as traders negotiate for better prices, quality, and relationships. Negotiations can help business managers build better and lasting relationships with other organizations. Successful business negotiations solve conflicts and may result in mergers as businesses agree to work towards a common goal. A successful business negotiation should leave all parties involved satisfied.

Common Mistakes in Business Negotiations

One common mistake that business managers and owners make when conducting business negotiations is failing to recognize their leverage or bargaining power. Some start negotiations without realizing their strong position or contribution to the negotiation process. Consequently, their partners utilize their advantage and gain more than they give in a negotiation. Another common mistake is not knowing which party bears the final negotiation authority. Business managers often come to a negotiation table with a preset mindset and a general goal of what they will achieve at the end of the process. Negotiations require specific goals and open mindsets because one party cannot predict the offers and actions of the other parties accurately.

Failing to give room for better offers is a common mistake in business negotiation. Some parties settle quickly for the first offer that is presented on the table without considering other possible offers. Others are quick to state their preferred offers without giving any room for the other party to present all their offers. Conducting negotiations at the wrong time and place will lead to failure. The two factors must be considered before negotiations start. Negotiation partners often make a mistake of losing control over unimportant issues that arise during negotiations. They may lose their temper or give up too quickly on the process before achieving their goal.

How to Conduct Successful Business Negotiations

Any successful business negotiation involves willing parties. Every negotiation must be voluntary and any of the involved parties should be free to withdraw from the process at any time. Business negotiations should be based on a common interest or goal which when achieved will benefit all parties. Each party should give and take from a successful negotiation process. Negotiations must be conducted at the right time and location. A negotiation party must also know when to give their best offer and when to accept an offer from the other party. Sometimes negotiations fail when prolonged. Negotiating parties must recognize their positions and bargaining powers beforehand. They must have open minds and allow the discussions to lead to the best solutions or decisions. It is also important to research and understand a partner’s business before initiating a negotiation with them. A third party maybe involved in case two parties feel inadequate to conduct successful and objective negotiations.