Noah Kagan’s Proven Strategy To Get What You Want (Every Time)

Tim Ferris | Topics: negotiation, entrepreneurship, cost-saving strategies, financial management, business skills

Video’s main points

• Understand that negotiation is not just about price; it’s about finding mutual value and positive experiences for both parties.
• Start by expressing that you’re not good at negotiating to lower defenses and encourage openness.
• Conduct a biannual review of costs to identify areas for potential discounts or cancellations.
• Identify actual values and comps when negotiating to strengthen your position and justify your ask.
• When making an offer, state your number and remain silent to encourage a response.

Effective Negotiation Strategies for Entrepreneurs

Negotiating is a critical skill for entrepreneurs, whether you’re negotiating deals with suppliers, figuring out office leases, or cutting unnecessary expenses. Here, we will explore actionable strategies for effective negotiation that can help you save money and enhance your business acumen. The key is to approach negotiation as a collaborative effort, focusing on mutual benefits rather than aggressive tactics.

1. Shift Your Mindset on Negotiating

Many people fear negotiation, thinking it’s about being pushy or confrontational. However, one effective strategy is to frame yourself as someone who is not great at negotiating. By saying, “I’m really bad at negotiating,” you can disarm the other party, lowering their defenses. This approach opens the door for a more collaborative environment, where both sides can express their needs more freely.

2. Focus on Creating Value

Getting the best deal is not just about cutting prices; it’s about creating a win-win situation. Understand what the other party values, and try to find an outcome that satisfies both sides. When both parties feel good about the negotiation, it’s more likely they will be willing to collaborate in the future. Remember, the goal is not only to close a deal but also to build a lasting relationship.

3. Conduct Regular Reviews of Your Expenses

One proactive approach to managing your costs is to conduct a biannual review of all your ongoing expenses, whether they are software subscriptions or contractor payments. This process involves listing every recurring cost and assessing its return on investment (ROI). By categorizing each expense as low, medium, or high value, you can identify which payments can be negotiated down or canceled altogether.

4. Leverage Data to Justify Your Requests

When entering a negotiation, having data-backed evidence can be invaluable. For instance, if you’re negotiating a price, be prepared to present comparable values or market research that aligns with your asking price. Knowing why you think a certain price is justified helps you articulate it clearly, making your case stronger. Always come prepared with facts and figures to support your negotiation.

5. Master the Power of Silence

Another powerful technique in negotiation is learning when to be silent. After presenting your offer, remain quiet. This tactic applies pressure on the other party, prompting them to respond. Silence can be uncomfortable, but it can also lead to more favorable terms. It’s essential to remember that every offer is an ask; stating your number clearly and then staying silent can often yield better results.

6. Know When to Walk Away

Understanding your bottom line is crucial. If negotiations aren’t going in your favor, don’t be afraid to walk away. This stance can sometimes prompt the other side to reconsider their position and potentially offer better terms. Always have a clear understanding of what you’re willing to accept and what your limits are.

7. Utilize Chargebacks When Necessary

If you’re dissatisfied with a product or service, a chargeback can be an effective way to get a company’s attention. In this scenario, you request your credit card company to reverse a transaction. This tactic should be used judiciously, but if a company fails to meet their commitments, it can serve as leverage in further negotiations.

8. Foster Long-Term Relationships

One of the best ways to facilitate better negotiations is to focus on building long-term relationships with your partners, clients, and vendors. Always be courteous and polite, even when negotiations get tough. A positive encounter can lead to future collaborations and better deals down the line.

Conclusion

Negotiation is an essential skill for any entrepreneur looking to minimize costs and maximize value. By implementing these strategies — including redefining your approach, conducting regular expense reviews, and leveraging data — you can improve your negotiation outcomes significantly. Remember, every negotiation is an opportunity to build relationships and enhance your business’s overall value.