To win, you need to know the five things not to do in negotiations.

Here is what I have learned about negotiating.

Every business owner and professional spends some time negotiating, whether it is with customers, suppliers, investors, or would-be employees. Most business owners are street-smart and perform well in negotiations naturally. You probably have a trick or two—some magic phrases to say, perhaps—that can help you gain the upper hand. But, often, you get into trouble in a negotiation when something careless slips out. If you are new to negotiation or feel it is an area where you can improve, check out these tips on what not to say.

1. “I’m the final decision maker.” At the beginning of many negotiations, someone will typically ask, “Who are the key stakeholders on your side, and is everyone needed to decide on the room?” For most entrepreneurs, the answer, of course, is “Yes.” Who else do you ever need to make a decision? Isn’t one of the joys of being an entrepreneur that you get to call the shots? Yet, this can be a negotiation trap, particularly with larger organizations. At the beginning of a negotiation, you almost always want to establish that there is some higher authority with whom you must speak before saying yes. In a business owner’s case, that mysterious overlord could be a key investor, a partner, or your advisory board members. The point is, while you will almost certainly be making the decision yourself, you do not want the opposing negotiators to know that you are the final decision maker, just in case you get cornered as the conversation develops. Particularly in a high-stakes deal, you will almost certainly benefit from taking an extra 24 hours to think through the terms. For once, be (falsely) humble: pretend you aren’t the person making all the decisions.

2. The word “between.” It often feels reasonable—and therefore like progress—to throw out a range. With a customer, that may mean saying, “I can do this for between $10,000 and $15,000.” With a potential hire, you could be tempted to say, “You can start between April 1 and April 15.” But that word between tends to be tantamount to a concession, and any shrewd negotiator you deal with will swiftly zero in on the cheaper price or the later deadline. In other words, by saying the word between you, you will automatically have conceded ground without extracting anything in return.

3. “I think we’re close.” We’ve all experienced deal fatigue: When you want to complete a deal, you signal to the other side that you are ready to settle on the details and move forward. The problem with arriving at this crossroads and announcing you’re there is that you have just indicated that you value simply reaching an agreement over getting what you want. A skilled negotiator on the other side may well use this moment as an opportunity to stall and, thus, to negotiate further concessions. Unless you face extreme time pressure, you shouldn’t be the party to point out that the clock is loudly ticking in the background. Create a situation where your counterpart is as eager to finalize the negotiation (or, better yet, more eager!) as you are.

4. “Why don’t you throw out a number?” There are differing schools of thought on this, and many people believe you should never be the first person in a negotiation to quote a price. Let the other side start the bidding; the thinking goes, and they will be forced to show their hands, providing you with an advantage. But some research has indicated that the result of a negotiation is often closer to hat the first mover proposed than to the number the other party had in mind; the first number uttered in a negotiation (so long as it is not ridiculous) has the effect of “anchoring the conversation.” And one’s role in the negotiation can matter, too. In the book Negotiation, Adam D. Galinsky of Northwestern’s Kellogg School of Management and Roderick I. Swaab of INSEAD in France writes: “In our studies, we found that the outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.”

5. “Screw you.” Whenever you negotiate, remember that it pays to stay calm. The savviest negotiators take nothing personally; they are impervious to criticism and impossible to fluster. And because they seem unmoved by the whole situation and unimpressed with the stakes, they can unnerve less-experienced counterparts. This can be an effective weapon against entrepreneurs because entrepreneurs tend to take every aspect of their businesses personally. Entrepreneurs often style themselves as frank, no-nonsense individuals, and they can, at times, have thin skin. But whenever you negotiate, remember that it pays to stay calm, never to show that an absurdly low counteroffer or an annoying stalling tactic has upset you. Use your equanimity to unnerve the person who is negotiating with you. And if he or she becomes angry or peeved, don’t take the bait to strike back. Just take heart: You’ve grabbed the emotional advantage in the situation.

Now go close that deal!

Mark Borkowski, pres.

Mercantile Mergers & Acquisitions Corp

1 King Street West, Suite 714

Toronto, Ontario

M5H1A1

(416) 368-8466 ext. 232

cel- (416) 531-4759

www.mercantilemergersacquisitions.com