The most basic principles of negotiating

Negotiations are oftentimes an unpleasant but crucial part of entrepreneurship and everyday life. While some founders flourish under the negotiation-game, others may crumble and feel as if they never exit negotiations as a ‘winner’.

This is why we introduced the ‘APX negotiation night’.

Here, we teach our startups the basics of negotiations and test their skills in fun, yet beneficial simulations.

There are two basic principles you need to keep in mind at negotiations.

With this knowledge, the attendees paired up and started negotiating. This time, the goal of the game was to reach an agreement between client and provider, on the price for a service. There was a misunderstanding beforehand, which is why both sides were having completely different ideas about the price. The ZOPA, in this case, was very small.

Luckily, all of our startups managed to find an agreement after about 20 minutes.

Top Five learnings:

1. Most of the time, money is not the main thing you need to focus on when negotiating a price.

Even though you are negotiating a price, money may be the hardest thing to negotiate. Try negotiating other options such as long-term service agreements, rebates or training sessions, which can be just as valuable.

2. Other aspects can be even more valuable than money.

Every additional resource costs money. If one counterpart is able to provide that resource (like free training conducted from one of their own employees) at a lower cost, let them take this as an alternative negotiation option

3. Understand your counterpart and build a relationship with him/her

Understand your opponent’s motivations just as much as your own.

4. Make sure to communicate your own priorities.

Your counterpart may have a wrong understanding of them.

5. Negotiation is not about being dominant, it’s about being creative.

You need to find creative ways of coming up with a win-win situation.