In this episode of the Growth Mindset podcast, we explore the secrets to successful negotiation and a six-step process to help MSME entrepreneurs close deals with confidence. Learn how to prepare effectively, listen actively, and adapt flexibly to achieve favourable outcomes. Tune in for practical tips and inspiring examples!
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Speaker 1: Welcome to the second episode of the Growth Mindset podcast
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Speaker 1: series two under EmpowerBiz MSME Growth Mindset. I am Abanibhusan Bera,
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Speaker 1: your host, founder of MSME Growth Hub, a revenue growth
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Speaker 1: strategist and sales coach. Today, we will dive into one
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Speaker 1: of the most crucial skills for M sme entrepreneurs negotiation.
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Speaker 1: Effective negotiation can make or break your deals, impact your
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Speaker 1: revenue and shape the future of your business. In this episode,
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Speaker 1: we will uncover the three secrets of successful negotiation and
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Speaker 1: walk through a six step process to help you close
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Speaker 1: deals with confidence. Let's get started.
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Speaker 1: The number one secret is preparation. Preparation is the key
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Speaker 1: preparation is the foundation of any successful negotiation, understanding your objectives,
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Speaker 1: knowing your counterparts needs and constraints and having a clear
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Speaker 1: strategy can set the stage for a favorable outcome. Now,
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Speaker 1: how do you prepare
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Speaker 1: three ways first? Research before you even
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Speaker 1: sit at the negotiation table, you need to know everything
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Speaker 1: about your counterpart. This includes understanding their business model, their
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Speaker 1: strengths and weaknesses and any potential challenges they might face.
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Speaker 1: This research will help you anticipate their needs and craft
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Speaker 1: a proposal that addresses their concerns while achieving your objectives.
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Speaker 1: Second is set clear objectives,
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Speaker 1: define what you want to achieve from the negotiation. These
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Speaker 1: could include specific terms, pricing delivery schedules or any other
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Speaker 1: important aspects. Having clear objectives, ensures you stay focused and
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Speaker 1: don't get sidetracked. And finally, under preparation is developing a
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Speaker 1: strategy based on your research,
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Speaker 1: develop a strategy for the negotiation. These strategies should include
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Speaker 1: your initial offer, your ideal outcome and your walk away point,
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Speaker 1: knowing your limits prevents you from agreeing to unfavorable terms.
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Speaker 1: Now, what's the secret to
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Speaker 1: this is active listening,
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Speaker 1: active listening is not just hearing words, it's understanding the
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Speaker 1: underlying messages, emotions and intentions. This skill helps build rapport,
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Speaker 1: uncover hidden interests and find common ground. But how do
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Speaker 1: you do that? First show empathy,
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Speaker 1: demonstrate genuine interest in the other party's perspective, acknowledge their
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Speaker 1: concerns and show that you are willing to work towards
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Speaker 1: a solution that benefits both parties. Second, ask open ended questions,
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Speaker 1: encourage the other party to share more information by asking
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Speaker 1: open ended questions. This can reveal their priorities and constraints
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Speaker 1: which can be crucial for crafting a mutually beneficial agreement.
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Speaker 1: And number three is reflect and clarify, paraphrase what the
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Speaker 1: other party has said to ensure you have understood their
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Speaker 1: points correctly.
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Speaker 1: This not only shows that you are listening but also
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Speaker 1: helps prevent misunderstandings. The number three secret is flexibility and adaptability.
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Speaker 1: Negotiation often involves unexpected turn, being flexible and adaptable allows
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Speaker 1: you to pivot your approach address emerging issues and capitalize
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Speaker 1: on new opportunities. How you can do that start with
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Speaker 1: staying open minded,
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Speaker 1: be prepared to consider alternative solutions. Sometimes the best agreements
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Speaker 1: come from creative problem solving rather than rigid adherence to
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Speaker 1: your initial position. Second, adjust your approach. If you encounter resistance,
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Speaker 1: be willing to adjust your strategy.
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Speaker 1: This might involve changing your offer, reconsidering your priorities or
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Speaker 1: finding new ways to add value to the deal and
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Speaker 1: then manage emotions, stay calm and composed even if the
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Speaker 1: negotiation becomes tense, keeping your emotions in check, helps you
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Speaker 1: think clearly and make rational decisions.
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Speaker 1: Now, after you know the three secrets, let's dive into
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Speaker 1: the six step process to close deals with confidence. First
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Speaker 1: step define your goals, clarify your objectives, clearly define what
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Speaker 1: you aim to achieve from the negotiation.
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Speaker 1: These goals should be specific measurable, achievable, relevant and time bound.
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Speaker 1: That is smart. For example, your goal might be to
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Speaker 1: secure a long term contract at a specific price point
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Speaker 1: and then identify priorities, rank your goals in order of importance,
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Speaker 1: this will help you stay focused on the most critical
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Speaker 1: aspects and make trade s more effectively if needed.
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Speaker 1: Second step research and prepare,
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Speaker 1: gather information, learn as much as possible about your counterpart,
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Speaker 1: their needs and the market context that might this might
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Speaker 1: include studying their financial reports, market trends and competitive landscape
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Speaker 1: and then develop a strategy plan. Your approach, anticipate counter
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Speaker 1: agreements and prepare responses, consider what concessions you are willing
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Speaker 1: to make and what you expect in return.
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Speaker 1: Third step is building rapport, first, establish connections, start with
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Speaker 1: small talk to build a personal connection. This helps create
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Speaker 1: a positive atmosphere and makes the negotiation more collaborative and
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Speaker 1: then show empathy, demonstrate understanding and empathy to foster trust,
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Speaker 1: acknowledge the other party's challenges and show that you are
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Speaker 1: committed to finding a win win solution.
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Speaker 1: Fourth step is presenting your case,
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Speaker 1: start with articulating clearly, present your proposal clearly and confidently
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Speaker 1: use facts, data and logical arguments to support your case
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Speaker 1: and then highlight benefits emphasize how your proposal benefits both
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Speaker 1: parties so that you have considered the other parties needs
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Speaker 1: and crafted a solution that adds value for them as well.
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Speaker 1: Fifth Step in the negotiation is listening and adapting.
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Speaker 1: Start with active listening. Pay close attention to your counterpart
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Speaker 1: responses and concerns, listen, not just to their words but
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Speaker 1: also to their tone and body language and then be flexible.
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Speaker 1: Adjust your approach based on the feedback and new information.
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Speaker 1: If the other party raises valid concerns, be willing to
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Speaker 1: revise your proposal to address them. And the final,
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Speaker 1: the last sixth step is closing the deal,
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Speaker 1: summarize agreement, recap the agreed terms to ensure mutual understanding,
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Speaker 1: go over each point and confirm that both parties are
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Speaker 1: on the same page and finally seal the deal. Formalize
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Speaker 1: the agreement with a handshake contract or verbal commitment, ensure
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Speaker 1: that all necessary documentation is completed and signed
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Speaker 1: as usual, I'll be talking about a use case example
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Speaker 1: and that is closing a key partnership deal that is
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Speaker 1: securing a new partnership for long term growth.
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Speaker 1: Think of the scenario, imagine you are an MME entrepreneur
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Speaker 1: seeking to form a strategic partnership with a larger company
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Speaker 1: to expand your market reach. This partnership is critical for
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Speaker 1: your business growth and sustainability,
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Speaker 1: the victory where it is after defining your goals, you
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Speaker 1: thoroughly resource the larger company's objectives, values and market position.
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Speaker 1: You discover that they are looking to expand their product
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Speaker 1: line and are interested in innovative solutions that complement their
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Speaker 1: existing offerings. You prepare a compelling proposal that highlights mutual
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Speaker 1: benefits such as combined resources, expanded market presence and shared innovation.
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Speaker 1: During the negotiation, you build rapport with the company's representatives
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Speaker 1: by showing genuine interest in their business and expressing empathy
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Speaker 1: for their challenges.
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Speaker 1: You start the conversation with small talk, discussing industry trends
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Speaker 1: and common challenges faced by both companies. You present your
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Speaker 1: case clearly emphasizing the advantages of the partnership for both parties.
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Speaker 1: For instance, you demonstrate how your innovative products can fill
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Speaker 1: a gap in their product line while their extensive distribution
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Speaker 1: need to
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Speaker 1: can significantly boost your market reach. Now, what's the outcome
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Speaker 1: through active listening and adaptability? You address their concerns and
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Speaker 1: adjust your proposal accordingly. When they express hesitation about the
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Speaker 1: financial terms, you propose a phased approach that allows them
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Speaker 1: to gradually increase their investment as the partnership
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Speaker 1: that could prove successful. Finally, you summarize the agreed terms,
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Speaker 1: ensuring clarity and mutual understanding and close the deal with
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Speaker 1: a formal agreement. The partnership results in significant business growth,
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Speaker 1: increased market share and long term success for your MS.
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Speaker 1: So in conclusion, thank you for tuning into this episode
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Speaker 1: on negotiation skills by mastering the secrets of preparation, active
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Speaker 1: listening and flexibility. And following a structured six step process,
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Speaker 1: you can confidently close deals that propel your M sme
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Speaker 1: to new heights. Remember,
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Speaker 1: negotiation is not just about winning, it's about finding mutually
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Speaker 1: beneficial solutions that foster long term relationships and growth.
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Speaker 1: If you enjoyed this episode, please subscribe to our podcast.
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Speaker 1: Leave a review and share it with other MSME entrepreneurs.
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Speaker 1: Visit our website
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Speaker 1: MSMEgrowthhub.com for more resources and join our MSME growth hub
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Speaker 1: community to continue your journey towards business excellence. Until next time,
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Speaker 1: keep growing and thriving.