The Business of Negotiation
When building software, there are many times that you will be negotiating with other companies or clients. Negotiation is a business within itself. If done properly, it can really benefit you. If done improperly, it can really hurt you. Negotiations will come up in countless areas of development. For example, when developing software you may be negotiating with a company for the honor of using their own software inside of yours. This type of deal is a mutually beneficial one. My company will get the benefits of your software to add value to mine, and you will get money from every transaction that transpires or set of software sold. If you can negotiate properly, so that everyone is satisfied, it’s a win-win.
The problem falls into the negotiation itself. There are several aspects of negotiation that you have to be aware of going into any deal. You can’t be so unrealistic with your demands and approach that you kill a deal and hurt yourself in the long run. Don't be short sighted. What does this mean? Maybe you’re trying to make the quick dollar up front instead of looking at long term. This can be a large detriment to your business. You have to consider what you are negotiating for, what it truly is worth to you, and if you really do need it in the long run or if it’s something that you can in fact walk away from if the deal doesn’t benefit you.
Let’s take the example from before of negotiating with a company for the right to use their software inside yours. If you can’t get it for the price that makes it worth it for you, maybe the result is that you just won’t put it in your software then. Maybe you don't have to have it. Maybe you do. You have to decide how important it is to you and what it’s worth to you. This is where the negotiation comes in. The thought process is, “I'm selling lots of software without it. I could sell more with it, but that would be making both of us money. Let's negotiate.”
When you start at two radically different places for what your expectations are in a deal –negotiation is a must. Your goal is to figure out how to get people on the other side to align and come together. At the end of the day, if this is something that you really want and need to move forward, then you have to figure out how to get a deal done when you’re so far apart. It’s important to know when to let go and let a deal happen. You don’t want to be the only thing standing in your own way.
What have your experiences been with negotiations in business? Before starting any negotiations, what are the most important questions you can ask yourself? What is the worst thing you can do when negotiating? Comment below!
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