Negotiating is an art that can be used in various aspect of life — from getting a higher salary to bargaining down the piece of a product. But all too often people forget to flex their negotiation skills.
Negotiating can be tricky for Blacks and women, some experts say. A 2018 research paper, “Bargaining While Black: The Role of Race in Salary Negotiations,” published by the American Psychological Association’s Journal of Applied Psychology, found that “Black job seekers are expected to negotiate less than their White counterparts and are penalized in negotiations with lower salary outcomes when this expectation is violated; especially when they negotiate with an evaluator who is more racially biased.”
Having the right negotiation strategy can not only help executives get higher salaries but also business owners to make better deals.
Here are three ways to counteract negotiation biases.
1. Know Your Market Value
Yesterday’s price is not today’s price. Knowing your market value is foundational and will ultimately set the pace for how quickly you’ll be able to climb the entrepreneurial ladder. In order to successfully negotiate, take the time to do the work and research so that you enter conversations with potential investors and partners armed with facts and leave no room for being lowballed.
“I didn’t know I could get a cash advance,” music executive Ray Daniels said at the recent Finurah Wealth Summit. Early on in his career, Daniels explained how he underestimated his value when choosing between two cash advance offers for a project, one of which helped him figure out he was being shortchanged.
Money management and financial literacy were some of the issues discussed at the summit, which also included Daniels, CEO of Raydar LLC, Neil Nelson, CEO and founder of Diamond Diaspora Media Group (the parent company of Finurah), and Martina Jimenez Sperry, executive director, market director, wealth, JPMorgan Chase Bank, N.A. The summit took place on April 23 at the Russell Innovation Center for Entrepreneurs in Atlanta.
“At this point, I’m thinking that I don’t want to do business with you anymore because you didn’t even think how much I was worth until someone set the market for me.”
Devoting time and energy to trying to understand the ins and outs of your industry will not only be beneficial for getting the highest offer or investment but also help you zero in on good business partners and investors.
2. Humbly Play Up Your Successes
No one will toot your horn better than you. When in negotiations, keep the conversations results-oriented as opposed to talking about hypotheticals. Keeping the focus solely on results you have seen shows investors that they will see a return on their investment given the milestones you managed to hit already. Most negotiations that will lean in your favor are contingent on the value of the product you’re offering so let your work speak for itself.
3. Get Rid of Insecurities
Daniels attributes a decent amount of his success to being around powerful people with connections who can do more than just get your foot in the door.
“It’s always good to be around people that have more than you,” Daniels said. “A lot of people don’t like people having more than them because they’ll feel insecure.”
Chances are the majority of successful people have some skin in the game when it comes to business negotiations, so you can learn a thing or two by being in their presence and asking for a trick out of their playbook. Networking can’t be overstated, especially with entrepreneurs and business leaders who’ve reached the levels you’re aspiring to.