Negotiation tips for founders

How to be a considerate human and still land a deal

What have you negotiated this week? 

If you're starting or running a business, there's plenty to negotiate. You've probably encountered negotiations for:  

  • New hires (salary, equity, benefits)
  • Space for your business (cost, lease terms, upgrades)
  • Operating needs (software, hardware, subscriptions)
  • Outsourced services (legal advice, accounting) 
  • Sponsorship and advertising prices
  • Client contracts and terms of service
  • What beer goes in the fridge

That last one gets pretty gnarly, right? 🍺 Good thing there's a way to up your negotiation game. 

Good news. Negotiation is a skill you can practice.

Whether you're horrific or pretty great at negotiations, you can get better. It's worth it, too. We've bartered for most all our legal services and received several sponsorships half-off. Other entrepreneurs have scored everything from free beer to deep discounts on software.

When you're a bootstrapped startup, these wins really add up.

6 human-centered approaches to getting what you want 

The specific tactics you leverage (like anchoring) depend on the situation. But as we've emphasized before, specifics won't get you far until you have a foundation to build on.

Know your "hell yes!" 😄 high and your "hello no!" 😐 low
Before you start a negotiation, figure out your best-case outcome (your high). Then figure out what you won't accept (your low). Think of these as your negotiation boundary lines.

Tip: You want to cement this in your brain before negotiations

Do research and come prepared 💼
This advice never goes out of style. Why? Because it works.

Say you want to buy a live chat service for your business. You're tight on cash and the service is expensive - too expensive. Before you reach out to negotiate, do some research. Is there any opportunity to partner with them and barter services for a lower price? Does the founder have any interests you can connect with? 

Research helps with everything from smart small talk to finding leverage. So brew yourself a fresh pot of coffee, sit down, and do the research. Figure out how you can help the other party help you. 

Recognize your deal types 
Deals fall into two main buckets: single transactions and relational transactions. 

👤Single transactions are one time affairs focused on a specific asset. It's like purchasing an office chair - you find one and move on. These transactions center on tangible, short-term outcomes and can get aggressive. 

👥Relational transactions involve ongoing contact between two parties. Examples are signing a lease, selling a service to a client, or hiring legal aid. Relational transactions rely heavily on relationships and intangibles. The short-term outcome matters but so does future success and all the time in between. 

For relational transactions, the foundations below are especially important. 

The only thing you should rush into is listening 👂
It's tempting to cut-to-the-chase but a lot of people see this as an attack. This puts them in a defensive, protective mindset and makes them much less open to negotiations.  

Instead of rushing to make your offer, be quick to listen. Ask good questions, demonstrate active listening and built rapport through conversation. This is crucial. Listening is the most effective way to find levers - the things you'll push on to swing negotiations in your favor.

Keep a pulse on your pulse 💗
Here's a thing a lot of people don't realize: your behavior is contagious.

In negotiations, this means you want to check hyper-competitiveness and combativeness at the door. The last thing you want to do is turn a discussion into a win-at-all-costs fight. Keeping things constructive, not combative, is how you secure an ideal outcome. 

Lastly, don't be despicable. 
No matter the situation, keep it classy and considerate. The purpose of negotiations isn't to take advantage of the other party or business. It's to find a deal that benefits you both, even if the outcome leans in your favor.

"You can’t get everything by bartering, but you’ll never get anything by staying quiet."
- Alex Turnbull, CEO at Groove

Want to see us cover a topic? Have major startup questions or sticking points? Email andrew@builtbykrit.com