The 3 Worst Negotiation Mistakes Entrepreneurs Make, And How To Avoid Them

Houston Business Consulting for Women Entrepreneurs

When you’re an entrepreneur, almost everything is a negotiation.

You negotiate with everyone from clients to partners and even employees sometimes. Negotiation is a fundamental part of the entrepreneurial experience. Unfortunately, many entrepreneurs fall victim to mistakes that make them incredibly poor negotiators.

• You’re greedy. - Nothing can derail a negotiation more quickly than greed. If one party pushes for too much or is too aggressive, the relationships between those involved grows sour, and the negotiation can go south. I’m a firm believer that there’s no such thing as “not personal, strictly business.” All business is personal, and emotions run high. It’s only natural for people to overestimate the value of their product, position, or contribution in a negotiation. It takes a special skill to recognize greedy behavior and stop it before it gets out of control.
• You don’t understand the type of negotiation you’re conducting. - There are two types of negotiations that leaders encounter on a frequent basis. The first is what I describe as the asset negotiation, which is generally a one-time event resulting in clear winners and losers. The negotiators are incentivized to view the situation as a zero-sum game where someone wins and someone loses, which naturally leads to a more aggressive exchange.
• You gamble with things you can’t afford to lose. - When you play hardball with another party, you must always recognize that they can simply walk away. This can be tricky when it comes to strategic relationships, because there’s often significant cost and pain associated with a potential dissolution. However, there is a point in most negotiations where the pain of dissolution is preferable to an inequitable outcome. If a relationship is truly central to your success as an organization, you must temper your desire to play hardball or risk losing everything.

When it comes to negotiation, entrepreneurs are often their own worst enemies. Ego-driven mistakes take their toll and make the process more painful than it has to be. Remember that successful negotiations require three things. First, there is simply no room for greedy behavior in successful negotiations. Second, both parties must recognize the nature of the the negotiation itself—if you have to work together going forward, the negotiation cannot be a zero-sum game.  And finally, maintaining perspective on what you are and aren’t willing to part with in the negotiation is invaluable. All too often people get too comfortable in a relationship and overplay their hand in negotiations. When this happens, they run the risk of losing everything, and that is the worst outcome of all.

Source: Forbes

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

Houston Business Consulting for Women Entrepreneurs.

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