Best 3 ways to negotiate in business

By Steve Strauss

Q: Steve - I work for a small business and I want to negotiate for a raise with the owner soon. Help! I don't know how to negotiate! -- Anna

A: As a "recovering" attorney, let me first say that one reason lawyers are called upon to negotiate deals-that many people could do on their own-is that we get one essential fact: Negotiations are a game.

Once you know it's all a game-with rules, strategies, tactics, winners and losers-negotiating becomes easier because you take a bit of the emotion out of it.

Of course you want to win. Here's how:

1: Pick a strategy

Before you negotiate, first figure out whether you want to employ a win-win strategy or a win-lose one.

The conventional business wisdom is that everyone strives for a win-win outcome; that you get much of what you want by helping the other side get much of what they want. When it works, win-win negotiations are great because everyone feels pretty good about the process and hard feelings are kept to a minimum.

But sometimes, win-win outcomes are not possible or even preferable. That is when the win-lose strategy makes sense: Try and get what you want and don't worry about sore feelings.

Either way, once you decide which strategy works best for you, the next step is to do your homework. The more you know about the other side's strengths and weaknesses, the greater your chances of getting what you want. For example:

If you know your boss will have a hard time replacing you, consider holding out for a better deal.
If you are negotiating a lease, knowing that the building has been empty for a year would be very valuable information.

So begin by doing your homework and figure out what style you want to use.

2. Have tactics ready

There comes a time in many negotiations when having some tactics at the ready can make a big difference. Here are some to consider:

Avoid making the first offer: Yes, this is Negotiations 101, but it bears repeating because it is so important. If you ask for a raise to $20 an hour and your boss was willing to pay you $23, you will never get $23 if you make the first offer.

If forced to make the first offer, be outrageous: "Well, I don't know what will work for you. I would love $50 an hour!"

Ask for more than what you want: This is especially hard for people who don't like to negotiate, but if you see this is a game, then asking for more should not be hard. He'll offer less. Game on!

The friendly gesture: Especially in a win-win negotiation, this tactic can be very effective. The idea is to make a magnanimous gesture to create some goodwill. Think about what it is that you could offer the other side that he or she needs, and offer that as a friendly incentive.

For instance, maybe your boss is tight for time (like most small business owners). Consider offering ways to free him up. For instance, you could learn some new software and teach it to everyone. Or what about taking on some bookkeeping? It need not be difficult and few small business owners like that task.

The point is that a nice offer may be appreciated or reciprocated.

Creativity: Maybe your boss can't afford the raise you want. In that case, be creative. What else could you get from him to make up for it? Maybe he could offer some extra, paid time off, or could pay for your monthly light rail pass. It never hurts to ask.

Don't act too interested: You gain leverage when it seems like you can take it or leave it. Easier said than done, I know, but it's true.

The red herring: By pretending you really want Fridays off (when if fact you don't care), you allow yourself the chance to compromise, give up that red herring, and still be able to hold out for what you really want (more money) without seeming like a jerk.

3. Wrap it up

Sometimes, getting the deal done takes a little nudge.

The calculated blowup: Maybe not useful with a boss, but in other negotiations, "blowing up" and then "cooling off" will often get people to be a little more cautious about what they are offering.

The willingness to walk: Again, the willingness to walk away from the table with no deal is the single most powerful weapon you have.