As a small business owner, you invest a lot in your business, a lot of time, stress, money and passion.  It essentially becomes an extension of you.  The pride you take in your products, or the care you take when providing your service, it has your DNA all over it. When someone pushes back or wants to pay far less than what you think is a fair price, it can feel incredibly frustrating.  And if you’re really honest, it also feels insulting.  Especially if you run a service-based business, when your product is you it’s hard not to take it personally.

So how do you stay calm, collected and professional when negotiating with someone when you feel like they don’t value you? 

 

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Here are 5 negotiation tips to help service-based business owners:

 

1. Separate the People from the Problem

It’s not about you.  It really isn’t.  I’m also a service-based business owner, the product I sell is me.  While my training and expertise is a part of the package, it often comes down to selling myself.

So how is it not about me?

It’s a line I use often when mediating, separate the people from the problem.  Some potential customers have been taught to always push hard for discounts, perhaps they’ve paid a lower price when a competitor undercut the market.  Or maybe they really can’t afford it or they represent someone putting price pressure on them.

If you take it personally and negotiate from a place of being offended you’re not going to get anywhere productive.  Step back, don’t assume that asking for a lower price means that they undervalue you.

Ask why they want discounts, what part of your service is most important to them, what their pain points are.  Figure out why they want you and then work with that information to address their pushback.  Negotiations are like joint problem solving, one side has a potential solution and one side has a need.  Work with the information you have, or ask for more, to solve the problem.

It’s really not personal.

 

2. Maintain Positivity

No one wants to work with someone who reacts negatively to a negotiation.  Don’t forget, even if they don’t end up working with you, they still might tell others that your service exists.  As a service-based business, your reputation is everything.  That extends beyond the service you provide, it goes to how you handle negotiating.

Don’t forget you’re problem-solving.  You both want a fair agreement and you certainly don’t want to have a mean streak negotiating with someone you’re then going to work with if you come to an agreement.

Be aware of what things might trigger reactions in you and plan how you might handle them in advance if possible.  By being aware of what upsets you, you can work towards preventing flying off the handle or saying something you might regret.  Luck favours the prepared, be ready for those discount requests.

And don’t forget about small talk, studies have shown that taking a few minutes to humanize each other with small talk releases the feel-good brain chemical oxytocin.  Making people feel good puts you both in a better place to negotiate.

 

3. Know Your Worth, Do Your Research

A potential client has come to you because they have a need for the service you provide.  But if they are asking for deep discounts it’s important that you can defend your pricing.  A lot of times they’ll tell you that can get the same service cheaper with your competition. If you’ve done your research and know the market, you’ll know if they are right.  You’ll also know what that other service might not include that you do.

This also allows you to be able to explain what makes you different, what your value is.  When you’re comfortable with your knowledge of what competitors charge and offer it gives you the confidence to justify why you’re asking for a certain price and to handle pushback.

It also helps to do your research about the potential customer if you can.  Ask them questions to find out what they need, see what they’ve done in the past.  You might be able to find a way to create an agreement that hits their pain points while still charging what you feel is fair.

 

 

4. Know What You’re Willing To Give and When You Need To Walk Away

You might need to concede some things when negotiating.  Knowing in advance what you can give up and what you can’t will make you more confident with negotiations.

Pay attention to how much value you see in coming to an agreement.  Consider that along with your bottom line, what do you need to receive to ensure that you’re getting value.  Sometimes you’ll be willing to give up a little bit of money to get preferable dates or agreed upon minimums.  You need to know what your floor and ceiling are to be able to make concessions or suggestions to get an agreement.

And don’t forget, not everyone is your customer.  Knowing your bottom line lets you know when a deal isn’t good for you.  Some people aren’t going to want to pay what you think is fair, they won’t see the value.  Knowing when to walk away prevents you from continuing a contentious conversation that isn’t working for either of you.  It’s ok to walk away.  Just remember to do it with kindness, you still have to protect your reputation after all.

 

5. Be Creative

Often two sides negotiate with the idea of dividing up the pie.  By taking the time to separate the people from the problem, asking questions to get more information, doing your research and being open and personable you will find that it’s possible to expand the pie before dividing it.

You’re the boss, enjoy the opportunity to be creative with negotiating agreements.  Sometimes a solution is created that you didn’t think was possible.  That initial pushback, when used with creative thinking can lead to some great long-term agreements and partnerships.  Don’t be closed off to creativity when negotiating.

Remember, you’ve got this!  You’ve invested a lot of blood, sweat and tears into creating and growing your business.  Negotiating is just a natural part of business ownership and the more you do it the more comfortable you’ll feel.  See those requests for discounts or pushback about your business as opportunities to grow and be creative.  They often are really rewarding challenges.

 

 

About The Author

Sarah Turl is a trained mediator with a background in sales, negotiation, and managing projects and conflicts between differing parties.  She is also an accomplished speaker who has spoken at large conferences and run targeted workshops.  Focused on providing practical and achievable results for clients, Sarah and Empowered Results Mediation are thrilled to serve the community to help manage conflicts and bring more peace to the people we work with.

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