How to Negotiate Effectively

The ability to know how to negotiate -- and negotiate well -- is an important element of entrepreneurial success. You negotiate with vendors, with customers, with your bank or investor -- practically everyone you will work with in your business. Negotiating is an integral process in business as your needs and goals differ with the other party, oftentimes in direct conflict with the other, and you both want to find mutually acceptable solution to the issue at hand.

Negotiating is a complex process, and how you do it depends on your skill, attitude and style. Some are great at negotiating, and enjoys the challenge of trying to win or push their agenda. Other people need a little, or even a lot, of help in the art of negotiating. They don't relish the perceived conflict inherent in negotations, particularly bad feelings, anger, or even the prospect of losing. Some simply do not know how to negotiate.

If you want to improve your negotiating skills, I highly recommend reading the book "Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond" by Deepal Malhotra and Max H. Bazerman (Bantam Books, 336 pages).

The book is an excellent read and shows you how to successfully handle yourself in various types of negotiations -- from effective haggling strategies to eliciting information from reticient negotiators to defending yourself. The authors even put in the questions you need to ask or how you need to phrase what you need to say. There are also lots of real world examples that helps illustrate the negotiation strategies that the authors presented.

As an example, the authors list 7 strategies as alternatives to lying (they advise never ever to lie during the negotiation process, as the cost is oftentimes not worth it):

• Incorporate reputation and relationship costs - do not negotiate in bad faith
• Prepare to answer difficult questions - people lie when they don't know how to respond so anticipate the questions that will be asked, no matter how difficult
• Try not to negotiate or respond to questions while under time pressure - answer the question only after you've had the opportunity to think more carefully about your response
• Refuse to answer certain questions - you do not need to answer all the questions the other party asks
• Offer to answer a different question - be upfront with your inability or unwillingness to answer the question, but provide a compromise by providing information to a related concern
• Change reality to make the truth more bearable
• Eliminate constaraints that tempt you to lie

The book will be available on Sept 25, and if you want to achieve outstanding success in negotiations, this is one book you shouldn't miss.

Tips on Negotiating from a Successful Real Estate Entrepreneur

I just got the book "The Peebles Principles", a first person account of R. Donahue Peebles -- head of a real estate development company The Peebles Corporation who made his fortune from scratch. He made his mark in Washington DC area, but his crowning achievement was the establishment of the Royal Palm Crowne Plaza, which became the first African American-owned resort in the U.S.

Peebles' book is surprisingly very informative with lots of tips on how could one start wheeling and dealing in the real estate world. Peebles may not be as well known as Donald Trump, but his book has a breath of freshness and believability that Trump's books often lack.

Some of Peebles tips on negotiations and running a business include:

• Don't quit even if it seems like the end, endurance in key.
• Don't be intimidated by better established rivals.
• Never stop looking for a way to win.
• Don't get sloppy at the end; the last five yards are more important than the first.
• If you cut deals with questionable parties, always make sure the documentation is thorough.
• In addition to thinking about how much money you can make from a given transacion, carefully consider your financial exposure. Be aware that this may exceed the intermediate cash you've put on the line.
• Maintain political relationships even when you don't need them. They may prove to be good insurance in critical situations.
• When it comes to closing deals, delay is the enemy of the entrepreneur -- unless you use it to stretch out your financial obligations.

I have written about the principles that Peebles live by based on his own experiences, and you can read it over at WomenHomeBusiness.com