The entrepreneur's guide to business negotiation revised & updated
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The entrepreneur's guide to business negotiation revised & updated

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TKJAIN'S 10 SIMPLE PRINCIPLES FOR ENTREPRENEURS, FOR THEIR SUPPORT, TO ENABLE THEM TO NEGOTIATE BETTER, A SIMPLE GUIDE, A SIMPLE ARTICLE, SIMPLE NOTES, PRACTICAL APPROACH, USEFUL FOR MBA, BBA, B.COM, ...

TKJAIN'S 10 SIMPLE PRINCIPLES FOR ENTREPRENEURS, FOR THEIR SUPPORT, TO ENABLE THEM TO NEGOTIATE BETTER, A SIMPLE GUIDE, A SIMPLE ARTICLE, SIMPLE NOTES, PRACTICAL APPROACH, USEFUL FOR MBA, BBA, B.COM, CA, CS, ICWA AND OTHERS

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The entrepreneur's guide to business negotiation revised & updated The entrepreneur's guide to business negotiation revised & updated Document Transcript

  • TKJAIN’S SERIES FOR THE FUTURE ENTREPRENEUR THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 10 SIMPLE PRINCIPLES OF NEGOTIATION FOR EVERY ENTREPRENEUR DR. TRILOK KUMAR JAIN 11/30/2013 The art of negotiation can be best learnt by being close to good negotiators and by practicing it. However, those who wish to learn, there are some simple guidelines, which can help them. This study material gives those guidelines. It is necessary for every entrepreneur to learn and practice the art of negotiation in order to survive and grow. Dr. Trilok Kumar Jain has been teaching, mentoring, guiding, helping, enabling and developing entrepreneurs. It is his passion to promote entrepreneurship. He organizes workshops, training programmes, and special sessions on social entrepreneurship, spiritual entrepreneurship and rural entrepreneurship. He has written many e-books for entrepreneurs which are freely available on the net. [Type text] Page 1
  • THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION by : Trilok Kumar Jain Dean, ISBM, Suresh Gyan Vihar University, Jaipur, India jain.tk@gmail.com Mobile : 9414430763 Author of books on Management for whom? Are you an entrepreneur? - this will help you thow who have become entrepreneurs those who aspire to be entrepreneurs THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 2
  • those who aspire to train entrepreneurs thow who aspire to support entrepreneurs Introduction Every entrepreneur has to engage in business negotiations. Business negotiations take place most frequently and it becomes a routine. Every negotiation should end with pleasent feelings and should generate some strong parners, supporters and friends. Every negotiation should enable the entrepreneur to emerge stronger. Every negotiation should bring new avenues, new opportunities and new network. Experience moulds, but I would recommend that every entrepreneur must learn and practice the art of negotiation. Meet real great negotiators and learn from them this art. I know one executive, who is truly outstanding in business negotiations and therefore I send my mentees to him to learn from him and practice this art. I would like to share with you some principles of negotiation, but truly, the art of negotiation can be learnt only by face to face discussion and through practice. tkjain's 10 principles of negotiation for the entrepreneur 1. Undertake thorough home work before negotiation - Entrepreneurs must identify what do they want out of negotiation. This requires considerable home work. If the negotiation with with workers' union - the entrepreneur must know about the present status (in terms of working hours, number of workers, manpower lost, quality, defects, and other issues) and what can they demand from the union for improvement of the organisation. If the negotiation is with financial institutions, the entrepreneur must have financial data at tips and must have a perspective plan for future so that capital investment can be justified. If the negotiation is with supplier, the entrepreneur must have the comparative data about different raw materials / machines / inputs and must have a clear idea about minimum standards that are expected. 2. Undertake thorough inquiry about other party THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 3 View slide
  • before negotiation - the other party has a history - which can be collected from market sources. This can help the entrepreneur in understanding the preferences, strengths, weaknesses, ideals, values and goals of the other party. The negotiation will be effective only if you are fully versed about the history & future targets of the other party. 3. Give a pleasent welcome and make the other party at home - extend a truly warm welcome to the other party. A good environment will reduce the possibility of tensions and conflicts. Create an environment for collaboration. Create an environment for joint venture. Let the other party feel that you really value them and respect them. Let the other party believe that you are sincere in your approach and you really wish to work with them. 4. Understand the perspective & offer of the other party - Listen to the other party and let him make the offer. Dont interrupt in between. Let the other party share all his ideas and all his perspectives. Let the other party speak out completely. 5. Identify what the other party wants as minimum - negotiation should start with exchange of expectations. Try to listen first. Listen, listen, listen - this is the fundamental for negotiation. Probe, and ask so that the other party speaks out. Take the other party to its minimum levels of expectations. If the other party says "We want to sell this for Rs 10000" - ask - "is this the minimum prize? " The other party will not easily speak out their minimum price, and this is the art of negotiator. Clever negotiator show off that they are very transparent and open up and force the other party also to open up and get the minimum from the other party. 6. Identify what will truly help the other party - there is a possibility that the other party might not be clear about what the other party wants. There is also a possibility that communication barriers exist. The other party is not able to communicate clearly what it wants. There is also a possibility that the other party is not 7. Take the Crux (important things) and Leave the THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 4 View slide
  • coverings, the emotions, the stories and the unnecessary part of it - Identify what the other party is saying just for the sake of speaking - during negotiation, people often speak somethings just for the sake of speaking. Ignore that and identify the crux. If it is negotiation with trade union - some union leaders will shout - they have to do it and this is their role. Just be cool and ignore their shouts and identify what they really want to save their face before their fellow friends. Identify what the person really wants or what he really want to offer. During a purchase / sale negotiation, the party may give bombastic data and figures and may quote ten customers which should make any sense to you. Just dig the basic facts - what is offer, what is minimum expectation and does it meet your requirement. Dont just get swayed by their promises - dont every ignore what you are here for (never forget your own requirements). There is a tendency that emotional presentation may force you to take a decision which you really didnt want to take before negotiation - so be careful. 8. Exhaust the other party - Ask the other party for all the details and explore him thoroughly. There might be a number of technical details, that you might miss if you dont ask. There is a principle of management - Caveat Emptor - it means buyers should be alert and beware. If buyers dont ask for details and later it is found that the product is not as per buyer's requirement - it is assumed that it is the mistake of buyer. Therefore it is necessary to explore, ask and inquire about every term and condition before finalising the negotiation. 9. Dont show hurry - my teacher renowned management thinker Prof. M.L. Mishra used to tell "avoid Hurry Worry and Curry". Any hurry in negotiation will be fatal. Take time. Dont get emotional, be stress free, be tension free and dont take any decision under emotional or other pressure. Look at data and try to find out what the data reveals. Decision should be taken only after evaluating all the options thoroughly. 10. Evolve a win-win solution - create a long lasting bondage - negotiation will generate a lasting solution only if both parties win out of the negotiation. Both the parties should be able to meet their minimum requirements. Every negotiation should end with an agreement that will help both the parties and there would be resultant synergy. Pl. do read my other articles also - which are freely available on the net : - THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 5
  • Entrepreneurs’ guide in Managing Marketing Entrepreneurs’ Guide in Managing Finance Entrepreneurs’ Guide in Managing Human Resources 21 Principles of Life Management 10 Point Orientation Programme for the Future Entrepreneurs Beginners Guide to Career Enrichment Biographies of Great Scholars from Bikaner Bikaner’s Greatest Role Models of our times Sujit Lalwani – An Inspirational Leader and Social Entrepreneur Abhay Jain Granthalaya Bikaner Harakh Chand Nahata – The Great Social Entrepreneur 11.I also need your support - I also need your network - I also need your patronage - I also need you. THE ENTREPRENEUR'S GUIDE TO BUSINESS NEGOTIATION 6